UAE Group I base oils prices stable to firm on tighter Iran supply

SINGAPORE (ICIS)–Spot prices of Group I base oils in the United Arab Emirates (UAE) were stable to firm in the week ended 26 October as SN500 offers were raised to account for tighter supply of material in the market, sources said late on Thursday.

Offers for bulk cargoes of Group I SN500 from a key Iranian refiner were heard at $725/tonne FOB (free on board) Iran, $5/tonne higher than in the previous week. The offers were increased this week to account for the short supply in the market amid healthy demand.

There were limited offers heard for similar grades from other producers in Iran in the current week.

There were no deals heard closed for Group I SN500 base oils on a CFR (cost & freight) UAE or ex-tank basis. There were however limited offers heard at $735/tonne ex-tank Sharjah and $740/tonne ex-tank Sharjah, all stable within the ICIS assessed ranges.

For the lighter grade SN150 Group I base oils, there was a dearth of fresh information related to this grade of base oils from Iranian refiners this week.

The market for Group I cargoes from Iran is expected to remain relatively tight with demand particularly in domestic Iranian markets heard to be healthy.

The resumption of production of SN500 from a major producer in Iran could ease some of the recent supply tightness in the region. But there has been no update available about a maintenance shutdown at another refinery in Iran, which produces SN150 and which has been underway since August/September.