Will 2021 end with an inflamed Market for base oil and lubricant?

Last week, there was some uncertainty in the market for base oils and lubricants due to infection of the new Corona variant, named Omicron which was discussed in this article. Many countries closed their borders and imposed travel restrictions to reduce the spread of the mutated virus.

This situation and OPEC+’s decision to increase the supply have affected the price of crude oil and refined products over the past few weeks. It also lifted part of the pressure to raise prices of base oils raw materials.

In recent days, oil prices reached around $75, but in the current market conditions, there is no fulcrum for prices. oil price might remain in the channel of 69-70$.

In the last days of 2021, the market has stopped again. Many refineries and importers are selling locally to empty their inventories.

New restrictions and quarantines could potentially reduce the demand for fuel and lubricants, as population mobility is limited. Therefore, refineries might cut rates. The price of recycled base oil fell by about $20-30 last week.

Shipping problems are currently affecting the world’s markets severely. In the Middle East and Bandar Abbas, it has had a stronger impact on trades. This has led to delays in shipments and caused Many cargoes to remain at various ports, waiting for shipping for months.

Demand has increased in Southwest Asia and some African countries. On contrary, demand has stalled in several Indian countries due to the new covid and the difficulty of transporting cargoes to India due to Adani decisions.

The market is generally inflamed for the lack of an ultimate prophecy of oil prices. Investing in the current market seems to be a huge risk. It is better for buyers to pay more attention to spot purchases at the moment and avoid investing.

We suggest being sure of the loading and shipping time before any purchase so that you do not face delays and blockages of your funds.

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