The COVID-19 pandemic is once again tightening its grip on many markets – with Europe and the Americas seeing the biggest increases in caseloads and East Asia appearing the only region in recovery.
Base oil markets have not escaped the impacts, as demand for finished lubricants is suffering broadly. Europe and the Middle East have been badly affected, with new waves of infections developing in countries such as Spain, France, Germany and the United Kingdom.
The impact on base oils has been uneven. Supply of API Group I grades has remained tight as demand from export markets climbs. A lack of availability for heavy Group I grades has driven some buyers to switch to Group II oils, causing a mini-spike in demand in there. The Group II segment would not be described as tight, but some grades are becoming scarcer, and some prices have begun to rise.