Supplies were often sourced from producers such as Eni’s refinery in Livorno, Italy, which supplied API Group I oils. Traders were mainly involved in the supply of base oils into Syria, although supply chains altered following the development of Assad’s relationship with Russia and Iran.

Similarly, base oils were constantly being imported into Israel through Haifa and Ashdod ports, activity which has been designated as too dangerous for commercial vessels to continue at this point in time. There have been deliveries of base oils made in flexi-tanks and isotanks, which appears to be sustaining local blending operations. Finished lubricants are also being imported into Israel in large quantities circumventing the need for base oils and chemical additives.

These traditional trades and businesses may return to the Levant and Israel eventually, along with other commercial activities that have been missing due to the historical and current problems in the region.

Around the Europe, the Middle East and Africa, there was some expectation that base oil producers and sellers would start to offer surplus inventories for all types of base oil, heading towards the year end, but so far there have been few reports of any fire sales to clear stocks. With only days until many operations start closing for the holiday season,  many blenders are giving notice that they will close facilities for around three weeks.

These decisions are largely based on poor demand for finished lubricants and ample stocks of base oil in tank as insurance against any chances of prices moving upwards in response to potential geopolitical developments in the New Year.

Developments in the Middle East do not appear to have spooked the energy markets, with crude prices remaining in a now familiar range. Demand from major economies remains subdued with China and Europe showing low levels of economic growth, stymieing requirements for larger quantities of crude.

OPEC+ pushed back a planned increase in production amid a period of slack oil prices. Eight members of the OPEC+ alliance of oil exporting countries have decided to put off increasing oil production as they face weaker than expected demand and competing production from non-allied countries such as Brazil and Argentina.

The OPEC+ members agreed during an online meeting to a three-month postponement of increases that had been scheduled to begin at the start of January. The original plan had been to gradually return during 2025 to output of 2.2 million barrels per day. That process will now be pushed back until October 2026.

Dated deliveries of Brent crude posted Monday at $73.35 per barrel, for February front month settlement, up just over $1 in the past week. West Texas Intermediate crude has also remained around last week’s price and is now at $68.60 per barrel, still for January front month.

Low-sulfur gasoil levels moved ever so slightly lower to $664per metric ton, still for December front month. All of these prices were obtained from London ICE trading Dec. 9.

Europe

A couple of European traders have lifted relatively small parcels of Group I base oils from Mediterranean sources, having pre-sold quantities into receivers in Turkey, where blenders have been crying out for European quality base oils to meet formulations and specifications laid down by major marketers.

European Group I exports for typical export destinations such as West Africa and Middle East Gulf still are not happening. The latter has become uneconomic due to extra shipping costs, and the former has become deluged by Russian imports priced too low for European traders to compete. The other reason is that not many producers have large quantities of Group I available, especially at prices that would compete with sources such as the United States.

As mentioned, there has been little evidence of last-minute sales of material to clear inventories before the year end, although there have been some oddball sales from a Spanish refinery still undergoing a maintenance turnaround. This maintenance was due to be completed last week but will probably finish in the next few days.

Prices for Group I sales within Europe seem stable with no reports of discounting to sell extra barrels during December. Some blenders bought stocks in late November and early December to insure against any sudden price movements caused by geopolitical events during the holidays. Many buyers and sellers will not be at their desks during that period, which would prevent quick response to disruptive events.

A number of blending operations located on the Upper Rhine have laid in stocks to cover against the river levels rising during the next few weeks, preventing barges from navigating a number of bridges en route.

Group I prices in Eastern Europe have moved slightly lower to around $910 per ton for solvent neutral 150 and $955/t for SN500. Demand remains poor, with December called to be very quiet. Economic and political events have not helped as Germany and France are both in the midst of political crises.

Mediterranean prices are also mostly taken lower to around $910/t-$925/t for SN150 and $945/t-$975/t for SN500 and SN600. Bright stock is the exception, having risen to $1,220/t-$1,250/t.

European prices for Group I oils sold in euros on an FCA basis are at €885/t-€-910/t for SN150, €920/t-€-955/t for SN500 and SN600 and €1,200/t-€-1,255/t for bright stock.

The dollar-euro exchange rate stayed flat during last week, posting at $1.05686 Monday. The average price differential across all grades between Group I exports from Europe and sales within the region remains between €10/t-€-25, although there were some “export specials” to traders.

European Group II prices have stabilized and steadied around current levels, following adjustments during November and early December. With the euro remaining weak versus the dollar, importers are under pressure to maintain euro prices at current levels. To compete with local production, importers sell in euros within the EU, leading to potential currency losses.

European Group II prices are unchanged at €1,085/t-€1,120/t for 110 neutral and 150N, €1,125/t-€-1,150/t for 220N and €1,175/t-€-1,210/t for 600N. These prices apply to a wide range of Group II base oils including European production and material from the U.S., the Red Sea and Asia-Pacific, imported in bulk.

The European Group III market remains an enigma, with copious quantities of product available around the market, whilst demand is dropping off heading toward the winter holidays. And more cargoes are reported on the water en route to Northwestern Europe.

The oversupply situation is becoming worse, with a number of distributors looking for additional storage to accommodate stocks arriving during December and January. The one feature that can alleviate this current dilemma is an increase in demand, which appears unlikely at present. Price pressures are increasing.

With demand weak across the main European markets in Germany, the Benelux region, France and the United Kingdom, prices are weakening. One seller is offering 4 cSt oil at €1,135/t, though other material is priced higher, at €1,185/t-€-1,225/t for 4 cSt and almost identical for 6 cSt, on an FCA basis ex Antwerp-Rotterdam-Amsterdam.

European prices for Group III oils with partial slates of finished lubricant approvals or with no approvals are now assessed at €1,135/t-€-1,225/t for 4 and 6 cSt and at €1,195/t-€-1,225/t for 8 cSt, all on an FCA basis ex Antwerp-Rotterdam-Amsterdam or Northwestern Europe.

Prices for rerefined Group III oils are unchanged at €1,135/t-€-1,175/t for 4 and 6 cSt, basis FCA ex rerefinery in Germany.

Prices for Group III oils with full slates of approvals remain much higher at €1,775/t-€-1,810/t for 4 and 6 cSt and at €1,820/t-€-1,835/t for 8 cSt, on an FCA basis ex hubs in Antwerp-Rotterdam-Amsterdam, Northwestern Europe and Spain.

Baltic and Black Seas

Baltic prices appear to have remained higher than other supply points, For example material being loaded out of Taganrog and Temyruk in the Sea of Azov appear to be pitched much lower from producers such as Rosneft and Gazprom. Lukoil exports most of the material coming out of the Baltic, destined for markets such as Turkey and Singapore. From investigations in Turkey, Lukoil prices are higher arriving on a CFR or CIF basis into Gebze, Turkey, but sellers maintain that the quality is better and specs are higher.

There are still problems receiving shipping information on cargoes loading out of the Baltic, and this report is seeking a source that can reliably report vessels employed to load base oils out of this region.

Baltic FOB prices for SN150 and SN500 ex St. Petersburg or Vyborg, Russia, are calculated from prices offered or delivered into Nigeria or Singapore. Lukoil FOB Baltic numbers appear to align more with Russian domestic prices and are assessed around $760/t-$780/t for SN150, $790/t-$810/t for SN500 and $845/t for SN900 blended specifically for Nigerian receivers.

Base oils from Europe and other sourced are moving into Baltic ports such as Klaipeda, Lithuania, and Riga and Liepaja in Latvia.

In Turkey there is no news on the new Tupras tender and doubt as to availability of material for a parcel large enough to ship. After the fire at the refinery in Izmir, it is not clear if base oil production has been affected.

A lube blender and trader based in Turkey is offering SN900 at $1,100/t, ex works Gebze. It is assumed that this grade is blended using bright stock, hence the relatively high price. SN150 is priced at $790/t and SN500 at $800/t. If estimated costs for handling and storage and a margin for the seller are taken into account, the CFR prices for both grades could be close to $640/t, an exceptionally low price.

Tupras has circulated new prices for the Turkish market: 35,285 lira per ton for spindle oil; Tl 31,104/t for SN150; Tl 33,253/t for SN500; and Tl 44,962/t for bright stock. Prices are in lira and are offered ex rack, plus a loading charge of Tl 5,150/t. Prices have come down, perhaps reflecting a slightly better exchanger rate for the lira versus the U.S. dollar.

Group II FCA levels remain at $890 for 110N and 220N and $1,100/t for 350N. It is considered that the two lighter grades may be Russian Group II. Higher spec 500N is at $1,500/t, and 150N is available at $1,150/t. These last two grades were imported from Taiwan. The interesting point here is, how did Taiwanese grades arrive to Turkey? Through the Red Sea?

Partly approved or non-approved Group III base oils available on an FCA basis include 4 cSt from Tatneft in Russia, currently heard around €1,145/t.

Quantities of fully approved Group III grades from Cartagena, Spain, are being delivered into Gemlik where prices remain at €1,960/t-€-1,995/t, on an FCA basis.

Middle East Gulf

Large cargoes of Group I and Group II II base oils are continuously being reported loading out of Yanbu, Saudi Arabia, and Group I solvent neutrals are being loaded out of the nearby port of Jeddah, often on the same vessels. The Group II base oils are bound for Mumbai anchorage and the United Arab Emirates, while the Group I grades are moving into the U.A.E. and Pakistan. Luberef also supplied light-vis Group II base oils into the Turkish market, and these stocks are now being resold ex works.

There are vessels noted loading for other ports such as Aqaba Jordan, Dar-es-Salaam, Tanzania, and Suakin, Sudan.

Prices for imported Group I material arriving into Middle East Gulf ports, predominantly the U.A.E., have fallen to around $965/t-$995/t for SN150, $1,020/t-1,045/t for SN500 and $1,125/t-1,180/t for bright stock, all on a CIF or CFR basis ex U.A.E. ports. These prices refer to imports from the U.S., Thailand and India.

There have been talks of looking at imports from Europe, but the logistics and economics are against this happening since vessels would have to detour around the Cape in South Africa to avoid Houthi attacks. One international major announced that if it was organizing cargoes of base oils sourced from Singapaore to move into Middle East Gulf destinations.

Russian base oil cargoes continue to arrive into Hamriyah port in the U.A.E. The cargo for Nigeria which was transferred ship to ship to the vessel FPMC 35 is now in Apapa. The vessel arrived on Nov. 29 and has now left Lagos en route up the coast of West Africa having discharged the cargo of 15,000 tons in Apapa. The vessel left Apapa on Dec. 5, so it incurred no undue delays or demurrage in discharging the cargo.

Some Russian prices, basis CFR Hamriyah port or anchorage, are heard to be lower than previously reported with some sources mentioning prices in the mid-$600s on a delivered basis. Judging from Turkish CFR prices, this may be possible using Rosneft barrels, although it had been considered that Lukoil were the main sellers in the U.A.E. Prices are now put in a range between $645/t-$785/t for SN150 and $655/t-$795/t for SN500.

It is not confirmed if the Group III tender from Bapco’s Sitra, Bahrain, refinery has loaded yet. The cargo was awarded to a European trader who is reportedly taking the cargo to Europe. Previously, another trading company purchased a quantity of around 15,000 tons from this source in another tender. Two cargoes were loaded splitting the 15,000 tons and were taken to Northwestern Europe where the quantities are still being resold ex-tank.

It may be the case that the original trading company is working with the current trader to execute the deal within the European market, since the initial trader will have customers who will be able to take quantities of Group IIII.

Group III netbacks for material loaded from Al Ruwais, U.A.E., and Sitra, Bahrain, moving to Europe are unchanged at $1,125/t-$1,200/t for 4, 6 and 8 cSt grades. Netbacks for gas-to-liquids Group III+ base oils ex Ras Laffan, Qatar, are also unchanged, estimated at $1,295/t-$1,325/t.

Netback levels are assessed from distributor selling prices, minus estimated marketing, margins, handling and freight costs.

Group II base oils imported and resold ex-tank in the U.A.E., or on a truck-delivered basis in the U.A.E. and Oman, are unchanged at $1,525/t-$1,575/t for 110N, 150N and 220N and at $1,635/t-$1,685/t for 600N. These grades are sold in local U.A.E. dirhams, a currency pegged to the U.S. dollar. The highs of the ranges refer to RTW deliveries to buyers in locations in the U.A.E. and northern Oman.

Africa

A large cargo of mixed base oils is now believed to be on its way to Durban, having loaded from Rotterdam and Fawley, U.K. It is expected on Jan. 7, with the quantity on board given as around 19,000 tons of Group l, Group II and Group III base oils plus a small quantity of easy chemicals, possibly polyalphaolefins or esters.

In Nigeria, the naira-dollar exchange rate fell almost 100 naira the past week to 1,620 on the black market. This rate is extremely volatile and can change on a daily basis, making exchanging into dollars a risky and unpredictable experience for traders trying to account for a large cargo. Sometimes it can take weeks or months to accrue the amount necessary. One trader who sold cargo into Nigeria in March has yet to finally accrue all funds relating to this cargo. Suffice to say that no interest will be offered for the unapproved extended credit.

Russian base oils in tank In Apapa continue to dictate the going rate for Nigeria. International traders offering barrels from the U.S., for example, are being expected to compete with Russian prices. Traders are also being asked for extended credit and “flexible” payment options in dollars or naira.

There are often two or three receivers involved in taking a large cargo of say, between 15,000-18,000 tons, which complicates the payments and the conversion to dollars. There are some good receivers in Lagos who will try to aide and assist sellers in accounting for a cargo, but there are also less trustworthy actors.

The ideal trade was performed with the procedure being to receive a letter of credit in U.S. dollars, opened by a local bank in Nigeria, having bid for the dollars in an auction, and being confirmed by a first-class European bank. Payment was made strictly thirty days following date of bill of lading. Items not covered under the letter of credit were demurrage and detention, either of which could cost a trader the margin on a cargo.

Some receivers in Nigeria are prepared to pay higher prices for higher quality base oils available from the U.S. and Europe, since they do not particularly like using Russian grades due to specifications and also the implications accepting Russian exports that are subject to sanctions in many other countries.

Theoretical Apapa prices for U.S. or European imports could be around $1,055-1,085/t for SN150, $1,100/t-$1,120/t for SN500 and $1,145/t-$1,170/t for SN900, basis CFR. Russian and U.A.E. delivered prices for Russian barrels have levels indicated at around $995/t for SN150, $1,035/t for SN500 and $1,085/t for SN900, also on a CFR basis.