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Newsletters/ March 12, 2021


The current supply & demand imbalance has several factors, among which we can mention the key ones:

  • The seasonal supply & demand patterns reversed in 2020 due to worldwide disruptions caused by the COVID-19 pandemics.
  • The earlier and more robust rebound in economic activity, with increased demand in base oils at a time when the refineries were either trimming shipments or were having low utilization rates.
  • The overlapping of planned maintenance, unexpected shutdowns caused by weather conditions, and complete closures.

As a result, today, we have high demand, premium prices, and limited supply in all regions and all base oil groups.

Below is a table, assessed by industry specialists, showing all the first half of the year’s ongoing maintenance.

Refinery Country Timing Cause
Galp* Portugal 2021 Closure
Eneos Japan 10 May 2021 for 45 days Maintenance
Rosneft Russia May 2021 Maintenance
Sapref South Africa May 2021 for 1 month Maintenance
MOL Hungary May 2021 for 1 month Maintenance
ENI Italy Mid-Apr 2021 for 1 month Maintenance
Lotos Poland Ely-Apr 2021 for 4-5 weeks Maintenance
PKN Orlen Poland Apr 2021 for 4-6 weeks Maintenance
Naftan Belarus Apr 2021 for 1 month Maintenance
Neste Finland Apr 2021 for 8 weeks Maintenance
GS Caltex South Korea Mid-Mar 2021 for 35-40 days Maintenance
HPCL India Ely-Mar 2021 for up to 60 days Maintenance
IRPC Thailand Mar to mid-Apr 2021 Maintenance
SK Lubricants South Korea Mar-Apr 2021 Maintenance
Cross Oil USA Mar 2021 for 21 days Maintenance
Rosneft/Gazpromneft Russia End-Feb to end-Mar 2021 Maintenance
Sinopec China Late-Feb 2021 for 2 months Maintenance
Gazpromneft Russia Mid-Feb 2021 for 1 month Maintenance
Motiva USA From 15 Feb 2021 Winter storm
ExxonMobil USA From 15 Feb 2021 Winter storm
Eneos Japan 14 Feb to 14 Jun 2021 Maintenance
Idemitsu Japan From 13 Feb 2021 Earthquake
Calumet USA Feb 2021 for 1 month Maintenance
Repsol Spain 15 Jan to 04 Mar 2021 Maintenance
SK-Repsol* Spain 2021 Maintenance
Holly Frontier USA Q1 2021 for up to 4 weeks Maintenance

* Unclear timing.

As we can see, Group I & Group III supply in Europe is tight. It is impacting mostly spot volumes, as the refineries build stock in advance to cover the term contracts – for which the volumes are said to higher this year in response to an expected limited supply.

On Group I & II from Asia and the US, we have noticed a fall in production and more volatility. We do not foresee the supply situation to improve in Q2, considering the above-mentioned maintenance and shutdowns.

The Group III base oil market is also under pressure, with many refineries being sold out for spot volumes or with planning maintenance. This situation could extend even beyond summer in 2021. Maintenance in Europe will impact the supply of base oils with original equipment manufacturer (OEM) approvals; with Neste having planned maintenance in April and with SK Repsol planning to increase their capacity, the timing still unclear for this.

The supply & demand situation could improve if the economic recovery continues, and more travel bans are lifted. This could boost the refineries’ utilization rate due to fuel demand and would subsequently increase base oil production.

Even with this optimistic scenario, replenishing inventories will take long after the maintenance, so until then, we must work closely to overcome the next months.

What can you do?
Let us know in advance your base oils requirements, and we will find the best alternatives for you. Keep in mind, availability is limited, and stocks are selling very fast.