The Tangle of the Political and Economic Crisis in the world’s Market

Sharp crude oil prices and sloping supply persist to put pressure on base oils and lubricants. After the OPEC+ agreement to release 120 million barrels of crude oil, oil prices fell about 5.7% at the end of last week.

Russia’s ongoing war against Ukraine, along with Russian sanctions, is expected to affect energy prices in the coming weeks.

The huge gap between the prices of fuel, gas, and crude oil has constructed a greater incentive to produce fuel and gasoline instead of base oils and recycled oils. The interruption has diminished the supply rate of these products.

While recycled prices were expected to fall seasonally with the start of spring, it has reached the highest level in past years. 

During the last week, the price of recycled base oil FOB Bandar Abbas surpassed $770.

The reasons for this surge are the lack of raw materials, the decline in manufacturers’ interest to produce recycled base oil, and the large contrast between oil and fuel prices which has led to more demand for recycled base oil.

The seasonal increase in demand for base oils and lubricants and the decrease in supply levels due to market fluctuations have also put upward pressure on prices. 

The price of paraffin 3-5% has exceeded $ 1300 in recent weeks.

Congestion in Chinese ports has exacerbated logistical problems due to the implementation of Covid-19 lockdown policies in ports such as Shanghai. The lack of vessel space has also put a strain on shipping rates.

Base oil market participants noted that rising commodity prices, as well as rising shipping and insurance rates, have led to further price adjustments during the week.

Ambiguity in the Shanghai quarantine situation and forecasts of inflated mobilities for the coming spring and summer have led to conflicting news about fuel, recycled oil, and base oils consumption.

Caustic soda faced limited production and high demand over the past few weeks. Its FOB price exceeds $ 800. check caustic soda price here.

In general, there is no predictable stability and short-term future for these reported products. In the current situation, the events of international politics and complex economic conditions seem to be intertwined.

This article was prepared by Tina Taghavi, the account manager of Infinity Galaxy. (www.InfinityGalaxy.org)