The Turning Point of Base Oil and Lubricant

The base oil market was almost steady last week and might find more stability in the next few days.

The conditions of the base oil market have been better than the same time last year when there was a shortage of production and a sharp rise in prices.

With growing tensions in the Middle East and the recent Houthi invasion of Yemen, the oil price has risen to the highest level since 2014. Research on a better situation of omicron variant and lower risk of the virus might put upward pressure on prices in the coming weeks.

The demand, especially for recycled base oil SN 150, has increased compared to previous weeks. Some buyers are willing to buy high quantities. Others are still in shock of the increase, waiting for further changes.

Chinese buyers seem to be waiting for the lunar New Year to return to the market. This was not necessarily due to price concerns but to uncertainties of the pandemic, transportation, and supply chain disruptions.

Domestic base oil suppliers have been able to meet much of China’s base oil demand, but imports remain essential.

In India, the abundance of domestic products and imports continues to hold expectations for lower prices. We cannot expect a reduction in base oil products and lubricants despite the rising production, logistics, and shipping costs. Increasing seasonal demand for base oils and lubricants also provided greater support for price growth in India.

In the caustic soda market, prices have jumped again, and the FOB caustic price has now reached over $ 700.

New reports indicate a new GRI is likely to be applied to shipping charges in February.

In general, the base oils and lubricants market is at a turning point, such as many other petroleum products. The increased demand might cause an unprecedented rise in prices for crude oil and raw materials in the coming weeks.

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