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Fears that the market for aviation lubricants and greases in the Middle East is unravelling as a result of the Covid-19 pandemic are exaggerated, analysts say.
Global base oil markets are under intense pressure as the threat of a worldwide recession sinks demand for lubricants amid few signs of an early respite in the coronavirus pandemic. Middle East base oil refiners’ push for a bigger piece of the API Group II and III base oil market now leaves them exposed in a global base oil supply glut, along with a drop in base oil demand and prices due to the pandemic’s economic impacts.
Base oil refiners in Asia are slashing production and looking for alternative markets amid plummeting lubricant and grease demand in China, industry insiders say, as the coronavirus outbreak continues to rattle markets.
Base oil refiners in the Middle East face a slowdown in business from China, following the outbreak of the deadly coronavirus as the crisis shreds lubricant and grease demand in key sectors.
A dramatic increase in base oil availability from the Middle East is fueling a supply glut that could exceed 3 million metric tons a year, according to an industry executive.
The Middle East may be finally kicking its monograde engine oil dependence, but dealing with the disposal of low-grade used oil could galvanize an increase in rerefining plants across the region, an industry insider said.