First ME base of oil price benchmark launched in the UAE.
By Shashank Shekhar
Published Thursday, April 01, 2010
The UAE and particularly the ports of Jebel Ali and Sharjah have become the hub of base oil trade in the Middle East, industry insiders told Emirates Business.
The price of base oil in the UAE has also risen in the last one month by about $45 to $55 a tonne. Base oil is used in the making of lubricants.
Argus Media, the world's largest energy price reporting agency, recently launched a pricing benchmark for base oil being traded in the UAE. Termed the Argus cif UAE, the benchmark prices the entire base oil volumes sold in the Middle East. This is the first base oil benchmark in the region.
Almost the entire base import in the UAE goes to Jebel Ali and Sharjah from where it is directed across the region. The expansion of fuel oil bunkering activity has also turned Fujairah into a hub for marine lubricant sales.
"The UAE is becoming a key hub for base oils and we have had a lot of positive feedback since we launched Argus cif UAE price assessments," said Owain Johnson, a Singapore-based Argus Media official. "The UAE buys base oils from Europe, Iran and Asia, so prices there are a really good guide to the state of the global base oils market."
At present, solvent neutral 150 base oils in the UAE are selling at $815-$875 per tonne, according to Argus data, which is a substantial rise from the $770-$820 per tonne a month ago.
Signs of a budding economic recovery are boosting lubricant demand and base oil prices. "The UAE has an ability to import base oil from across the world because of its geographical location," an analyst said.
Sunil More, who works as a trader for a DMCC registered energy company, said that there was an increasing demand for base oil in the UAE. "Though we had not been dealing in base oil we are now planning to sell it," More said.
Analysts said the consumption of base oil has been rising in the Middle East because of its demand in automobile, shipping and machinery sectors. "The Middle East is becoming an important export and import location," an analyst said.
The UAE imports most of its base oil because of the absence of base oil plants at refineries in the region. Iran has traditionally been a major exporter of base oils to the UAE. The Middle East is expected to become even more important to global base oils as two high-quality new plants start up next year.
Shell plans to complete its Pearl gas-to-liquids (GTL) project in Qatar early next year, which will convert gas into transport fuels and base oil.
"Shell's Pearl plant will produce large volumes of high-quality base oils that will be in demand all over the world. Base oils from Qatar will be exported to Europe, the US and to northeast Asia, changing the current dynamics of the market. The global base oils market is increasingly focused on the news from Qatar," said Johnson.
Finnish refiner Neste is building a base oils plant in Bahrain, which is scheduled to be completed in 2011
Source: http://www.business24-7.ae/companies-markets/energy-utilities/uae-becomes-hub-of-middle-east-base-oil-trade-2010-04-01-1.101228
By Shashank Shekhar
Published Thursday, April 01, 2010
The UAE and particularly the ports of Jebel Ali and Sharjah have become the hub of base oil trade in the Middle East, industry insiders told Emirates Business.
The price of base oil in the UAE has also risen in the last one month by about $45 to $55 a tonne. Base oil is used in the making of lubricants.
Argus Media, the world's largest energy price reporting agency, recently launched a pricing benchmark for base oil being traded in the UAE. Termed the Argus cif UAE, the benchmark prices the entire base oil volumes sold in the Middle East. This is the first base oil benchmark in the region.
Almost the entire base import in the UAE goes to Jebel Ali and Sharjah from where it is directed across the region. The expansion of fuel oil bunkering activity has also turned Fujairah into a hub for marine lubricant sales.
"The UAE is becoming a key hub for base oils and we have had a lot of positive feedback since we launched Argus cif UAE price assessments," said Owain Johnson, a Singapore-based Argus Media official. "The UAE buys base oils from Europe, Iran and Asia, so prices there are a really good guide to the state of the global base oils market."
At present, solvent neutral 150 base oils in the UAE are selling at $815-$875 per tonne, according to Argus data, which is a substantial rise from the $770-$820 per tonne a month ago.
Signs of a budding economic recovery are boosting lubricant demand and base oil prices. "The UAE has an ability to import base oil from across the world because of its geographical location," an analyst said.
Sunil More, who works as a trader for a DMCC registered energy company, said that there was an increasing demand for base oil in the UAE. "Though we had not been dealing in base oil we are now planning to sell it," More said.
Analysts said the consumption of base oil has been rising in the Middle East because of its demand in automobile, shipping and machinery sectors. "The Middle East is becoming an important export and import location," an analyst said.
The UAE imports most of its base oil because of the absence of base oil plants at refineries in the region. Iran has traditionally been a major exporter of base oils to the UAE. The Middle East is expected to become even more important to global base oils as two high-quality new plants start up next year.
Shell plans to complete its Pearl gas-to-liquids (GTL) project in Qatar early next year, which will convert gas into transport fuels and base oil.
"Shell's Pearl plant will produce large volumes of high-quality base oils that will be in demand all over the world. Base oils from Qatar will be exported to Europe, the US and to northeast Asia, changing the current dynamics of the market. The global base oils market is increasingly focused on the news from Qatar," said Johnson.
Finnish refiner Neste is building a base oils plant in Bahrain, which is scheduled to be completed in 2011
Source: http://www.business24-7.ae/companies-markets/energy-utilities/uae-becomes-hub-of-middle-east-base-oil-trade-2010-04-01-1.101228
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