Weekly Lubricants Report: Impact of Economic Turmoil on Lubricant Market

Last week, the price of Brent crude oil reached around $78. The bankruptcy of SVB bank in America, followed by news of the bankruptcy of two other banks in the US, has caused fears of a repeat of the 2008 global financial crisis. As a result, oil prices have decreased and reached around $78. 

These concerns will continue until governments announce a clear plan. On the other hand, news of a possible half percent reduction in interest rates by the US Federal Reserve may affect oil prices and increase them.

The re-establishment of political relations between Iran and Saudi Arabia and talks of establishing relations between Iran and some countries in the Persian Gulf have caused the Iranian Rial to recover 20 percent of its lost value within three days. 

This strengthening of the Rial against the dollar has led to a significant increase in prices for exports and a sharp rise in prices in less than a week before the Iranian new year. 

These conditions have become somewhat complicated in different countries. With the reduction in oil prices, we should expect a decrease in market prices, but on the other hand, in a producer country like Iran, with the increase in the Rial’s value against the dollar and the competitions that have taken place and the full prices of the goods, we may experience a period of stagflation in the market again. 

The FOB BND price of recycled base in the last week of the Iranian year, third week of March 2023, is between 750 to 760 USD, paraffin wax  is between 950 to 1000 USD, and caustic soda is between 660 to 680 USD.

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