Lubricating Oil Methodology
The main use for base oils is in the manufacture of lubricants, of which there are many thousands of types. The best-known are automotive lubricants, but there are many more applications in which lubricants are used, some of which are highly specialised. One litre of lubricants is composed of anywhere between 50% and 90% base oil, the rest being made up of additives.
The traditional method of producing base oils is to feed straight-run fuel oil into a Vacuum Distillation column, the output of which can either go into fuels processing or be fed into a solvent extraction plant. The fluid is further treated to remove unwanted properties such as wax, sulphur, and aromatics.
Unlike most other oil and chemical products, there is no industry standard for base oils. Most refineries manufacture different quality base oils. In automotive usage, viscosity index, pourpoint, oxidation stability and volatility are important, but there are other important criteria for measuring base oils in industrial applications for example.
ICIS pricing quotes Base Oil prices in Europe, Asia-Pacific, the Middle East and the USA.
Prices relate to paraffinic base oils in all areas, except in the US where both paraffinic and naphthenic base oils prices are quoted.
Frequency:
Published weekly on Tuesdays, and the Middle East report on Thursdays
Base Oils (EUROPE)
Weekly Price Assessments:
SN 150 Spot Prices
- FOB DOMESTIC NWE (USD/MT)
- FOB EUROPEAN EXPORT (USD/MT)
- FOB BALTIC SEA (USD/MT)
- FOB BLACK SEA (USD/MT)
SN 500 Spot Prices
- FOB DOMESTIC NWE (USD/MT)
- FOB EUROPEAN EXPORT (USD/MT)
- FOB BALTIC SEA (USD/MT)
- FOB BLACK SEA (USD/MT)
Brightstock Spot Prices
- FOB DOMESTIC NWE (USD/MT)
- FOB EUROPEAN EXPORT (USD/MT)
Group III Spot Prices
- 4cSt FCA ARA (TRUCKS) (EUR/MT)
- 6cSt FCA ARA (TRUCKS) (EUR/MT)
Vacuum Gasoil (VGO)
3.5% Fuel Oil
Base Oils (ASIA-PACIFIC)
Weekly Price Assessments:
GROUP I BASE OILS
SN 150 Spot Prices
- EX-TANK SINGAPORE (USD/MT)
- FOB ASIA EXPORT (USD/MT)
- CFR INDIA (USD/MT)
- CFR NORTH EAST ASIA (USD/MT)
SN 500 Spot Prices
- EX-TANK SINGAPORE (USD/MT)
- FOB ASIA EXPORT (USD/MT)
- CFR INDIA (USD/MT)
- CFR NORTH EAST ASIA (USD/MT)
Brightstock Spot Prices
- EX-TANK SINGAPORE (USD/MT)
- FOB ASIA EXPORT (USD/MT)
- CFR INDIA (USD/MT)
- CFR NORTH EAST ASIA (USD/MT)
GROUP II BASE OILS
150 Neutral Spot Prices
- FOB NORTH EAST ASIA (USD/MT)
- CFR NORTH EAST ASIA (USD/MT)
- CFR INDIA (USD/MT)
500 Neutral Spot Prices
- FOB NORTH EAST ASIA (USD/MT)
- CFR NORTH EAST ASIA (USD/MT)
- CFR INDIA (USD/MT)
GROUP III BASE OILS
4cSt Spot Prices
6cSt Spot Prices
8cSt Spot Prices
RELATED OIL PRODUCT PRICES
3.5% Fuel Oil
0.5% Gas Oil
Base Oils (USA)
Weekly Price Assessments
Paraffinic Posted Prices:
ICIS pricing reports all major refiners (ExxonMobil; Holly; Paulsboro Refining Company (PRC); Calumet; Chevron; SK Lubricants; ConocoPhillips; Motiva) posted base oils prices issued for the US as well as prices for the major Venezuelan producer - PDVSA. FOB locations vary from producer to producer, but this is noted on each report. Prices are recorded in USD/gal. Effective dates of posted prices are also reported. Price categories are broken down into Group I, Group II, Group II+, Group III and Group III+. Posted Prices are provided to ICIS pricing by each producer, with the exception of ExxonMobil. This information is obtained through industry sources.
Spot Market Prices (Paraffinic):
Prices are reported on in USD/gal and on an FOB/USGC basis for Neutrals 100; 150; 200-250; 300-350; 500-550; 600-650 and Bright Stock.
Spot Market Prices (Naphthenic):
Prices are reported in USD/gal and on an FOB/Plant basis for Pale Oils 60, 100, 150, 200, 300, 500, 750, 1200, 2000, 2400. PDVSA publishes posted prices.
Feedstock Prices:
Vacuum Gasoil (VGO) is used as a key feedstock indicator for the Base Oils market.VGO assessments are spot prices for cargoes of Low Sulphur (max 0.5% sulphur) and High Sulphur (max 1.6% Sulphur material).
Base Oils (Middle East)
Weekly Price Assessments
SN 150 Spot Prices
SN 500 Spot Prices
Iran List Prices
Sepahan Oil
SN 500
- FOB Iran (USD/MT)
- CFR UAE (USD/MT)
General Information:
Assessment window:
Price assessments are based on information supplied by market participants in the week up to close of business on Tuesdays at 1800 hours in London, Singapore and Houston. For the Middle East report, price assessments are based on information gathered in the week up to Thursdays at 1400 hours in Dubai. All prices are determined following verification from major buyers and sellers, incorporating discussions and confirmation of actual done deals.
Timing (Asia):
Cargoes loading two-four weeks forward or delivered two-six weeks forward from the date of publication will be considered for assessment. US cargoes to India and China take about 35-45 days and this window will be considered for assessment purposes.
Assessment basis:
Spot Domestic European quotations refer to a typical specification as manufactured by a North West European refiner. FOB prices refer to a generic North West European refinery and to no particular installation or jetty. Industry practice is for the material to be made available ex-tank refinery, and additional charges, if applicable, such as duty, additional storage or transport are for the buyer’s account. Prices quoted tend to be for cargo quantities, typically of a minimum 500 tonnes.
European Group III base oil prices are assessed for individual truckloads of 4cSt and 6cSt material, typically 20-25 tonnes, on an FCA ARA basis. The product is made available from storage.
European Export quotations are broader in terms of product specification and also encompass most Mediterranean refiners. Material that is deemed unsuitable, or non-approved tends to be priced at a discount, and similarly material that is of a very high specification may command a premium above the quoted ranges. Prices are quoted FOB Europe, and do not refer to any particular installation or jetty. Industry practice is for the material to made available ex-tank, and any additional charges, if applicable, such as duty, additional storage or transport are for the buyer’s account. Prices quoted tend to be for cargo quantities, typically of a minimum 1,000 tonnes.
Russia & New NIS (New Independent States) export quotations refer to typical specifications as manufactured by refiners in this region. Prices are quoted FOB Baltic Sea and FOB Black Sea, and do not refer to any particular installation or jetty. Industry practice is for the material to made available ex-tank, and any additional charges, if applicable, such as duty, additional storage or transport are for the buyer’s account. Prices quoted tend to be for cargo quantities, typically of a minimum 1,000 tonnes.
Ex-tank Singapore prices represent sales on an ex-tank basis from secondary storage in Singapore to local blenders. Exxon Mobil’s prices to its term customers are often taken into account in the assessment process as its prices function as a benchmark for both ex-tank Singapore and FOB Asia export sales. The ex-tank Singapore numbers also function as a benchmark for export sales in other Southeast Asian countries, given the importance of Singapore among regional countries for the base oils business due to production and export by Exxon Mobil and Shell. Singapore producers tend to have surplus availabilities for export.
FOB Asia (export) prices represent sales of material from Asia. Singapore, Indonesia, Thailand, Taiwan, Japan, China, India and Pakistan supply Group I base oils. The Group III base oil production centres are in South Korea, Indonesia and Malaysia.
CFR India numbers are assessed prices of imports of base oils into India from producers in Europe, the US, the Middle East and Asia.
Group II quotes cover the cargoes coming in mostly from Korea to India. Sometimes group II cargoes are also sold from the US into India. Group I prices reflect mainly supplies from Iran.
CFR North East Asia prices capture spot deals into China, Taiwan, South Korea and Japan. China and Taiwan import Group I and II base oils regularly. South Korea buys Group I base oils from time to time, while Japan imports small quantities of Group II base oils.
Group I spot supply to the northeast Asian markets comes mainly from Singapore, Thailand, Indonesia, Taiwan and Japan. Europe exports Group I base oils when the west-east arbitrage economics are favourable. Spot cargoes for Group II base oils to northeast Asia are mainly from Korea and Taiwan.
Much of the day-to-day activity taking place in the US market is done on a contract basis, using posted prices as a key factor in a number of formulas (privy to supplier/consumer only).
Europe feedstock prices are given as a reference point only. VGO prices are quoted as a range from 1% sulphur to 2% sulphur, and are quoted in USD/tonne basis FOB Rotterdam. 3.5% fuel oil prices are quoted in USD/mt basis FOB Rotterdam.
In Singapore, 180 cSt fuel oil prices and 0.5% sulphur gas oil prices reflect the latest spot prices obtained by ICIS and are provided for reference.
CFR UAE quotations for SN 150 and SN 500 reflect mainly prices of base oil spot supply from Iran. The UAE also imports similar grades from Europe, and Russia & New NIS on a spot basis when arbitrage economics are favourable, and such deals will be reflected in the weekly price assessment. Saudi Arabia is also a regular supplier to the UAE, although most deals are done on a term basis. India and Pakistan also supply Group I base oils from time to time.
ICIS pricing considers SN 150 and SN 500 bulk cargoes that are at least 1,000-2,000 tonnes in size. Iranian SN 150 and SN 500 exports typically have a minimum viscosity index (VI) of around 90. Russian supplies commonly have a VI of less than 95, while products from Europe and Saudi Arabia have a VI of at least 95.
The SN 500 list prices of Iranian producer Sepahan Oil are posted in the weekly report for pricing reference.
Other than the Middle East, Iranian cargoes are also exported to India, China and southeast Asia. Such trades are reported in the text of the report.
Russian and European supplies are usually sold on LC 30-60 days basis or open credit terms of 30-60 days. The payment for Iranian cargoes typically involves full or partial cash in advance.
Shipping:
A section on the transportation of Base Oils in bulk is included. The information contained has been obtained from the ICIS pricing Chemical Tanker Shipping reports and also directly from shipping sources. In the shipping market, the general term for base oils is “lubes”, which is not a reference to finished lubricants.
Shipping fixtures refer to cargoes that have been chartered on a vessel. The fixtures are anonymous, i.e. the vessel’s name and the charterer’s name are withheld. A fixture details the cargo size, number of grades (if known), load port and discharge port, loading dates and freight rate, if available.
Shipping enquiries refer to cargo enquiries that have been circulated in the shipping market. They are in the same format as the fixtures.