Weekly Lubricant Report: High Demand of Lubricants and Shortage of Supply

In the 16th week of the Russia-Ukraine war, Russia’s attacks in the eastern region appear to be intensifying and the scenario of Russia’s victory in the war appears increasingly probable.

As mentioned in several previous technical analyses by Infinity Galaxy in June, the Brent crude oil price range was estimated at $110- $125, with a maximum price of around $126 during the last 15 days of June. And the minimum has reached about $117, which is an increase over the average in May.

At the same time, global inflation reported to be about %8.6, which has almost doubled compared to the same period in previous years, and inflation in various countries, which has risen sharply, has caused the market to fear future events. Financial markets in different countries have fallen with the strength of the dollar and commodity markets like crude oil cannot be counted on its futures market to what extent subsequent events will reduce or increase prices.

These factors have led to many changes in the markets for petroleum products. Due to the daily changes of the prices, the buyers do not know at what price they should buy their required goods in order to benefit them.

The dollar has risen about 78 INR against the Indian Rupees and crossed its historical mark against the Rial. This factor has led to a decrease in export prices, but on the other hand, importers are not able to import goods and prefer to see at what price domestic production ends in their own country if they want to use it. However, the recycled base oil market is still active and the demand for this product is very high.

Despite the good demand, Iran has a very limited supply of raw materials due to its shortage. Despite the increase in the dollar against the Rial, the price of recycled base oil has not decreased because its raw materials are not available.

Now it is being offered in the range of about $870-$890 FOB Bandar Abbas. Paraffin wax is offered by some factories up to about $1300-$1350 FOB Bandar Abbas. Iranian Caustic Soda flake is offered for about $800.

Generally, like the previous month, Infinity Galaxy advises all petroleum product customers to make their purchase on request. This is because the conditions for investing in commodities in the current situation are almost too risky.

This article was prepared by Mozhdeh Darbandizadeh, the account manager of Infinity Galaxy (www.infinitygalaxy.org).