Weekly Lubricant Report: Lubricant Market under the Influence of Political Conditions

More than 125 days have passed since the Russia-Ukraine war, and it seems Russia has won on the eastern front. Russia’s heavy attacks on the Ukrainian capital, Kiev, also continue. The average price of crude oil from June to its last week shows a recession compared to the last 6 months.

This indicates that the crude oil price break has been lifted after about 6 consecutive months of increase, and the current crude oil price is stable in the range of $110 to $125.

The IOCL predicts that crude oil prices will continue to be above $100 for the second half of 2022. Different reports from various crude oil analysts have been published, some predicting a price increase of over $135 and some of them estimated a decrease in prices to $95.

News from India suggests that from July 1, India may again apply price reductions on its petrochemical products. On the other hand, there are rumors of an increase in Russian oil exports to China and India. 

Meanwhile, in the last few days, news of Iran-US talks in Qatar has been published, which has reduced the value of the dollar against the rial, and therefore, the price of export commodities in Iran has increased despite the recession.

Also, over the last week, China’s economic growth has not stabilized due to China’s Zero- Covid strategy, which calls for an end to the Covid-19 in China. 

In the current situation, the price of recycled base oil in Bandar Abbas is about $970 to $990, Iran paraffin (3-5% Oil Content) is about $1,300 to $1,350 and caustic soda price is about $750 to $780. 

France has also demanded the presence of Iranian crude oil in European markets, especially in France, which indicates that the barrier to sanctions on Iran in international markets may be broken soon.

It seems that the market is more affected by political conditions than economic conditions, and we have to wait for new political conditions to determine the market situation.

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