U.S. Base Oil Price Report


The dust has started to settle after the whirlwind of posted price adjustments observed the previous two weeks. However, volatility in crude oil and feedstock markets, together with ongoing supply chain disruptions, kept base oil participants on their toes.

Last week, a number of base stock producers partly rescinded previously announced posted price increases as crude oil prices fell from the lofty levels reached the preceding week as the United States imposed a ban on Russian imports of crude oil, natural gas and coal. The final result was that increases of 10 cents per gallon to 40 cents/gal went into effect between March 18 and March 23. Producers who adjusted their posted price increase amounts included ExxonMobil, HollyFrontier, Petro-Canada, Calumet and Paulsboro.

Get alerts when new Sustainability Blog articles are available.


A second group of producers did not revise their increase amounts–which ranged 15 to 60 cents/gal, depending on the product and the supplier—and chose to implement them between March 15 and March 21. They included Chevron, Excel Paralubes, Motiva, Safety-Kleen and Petro-Canada (on its Group III base oils).

Yet another couple of suppliers – SK Americas and Avista Oil – who had not communicated price increases the preceding week initiated markups between 40 cents/gal and 60 cents/gal last week, with implementation dates set between March 18 and March 24.

All of these increases came on the back of a round of posted price increments implemented by a majority of producers in early March.

The initiatives were not only sparked by a steep jump in crude oil values, but also by a tightening supply/demand scenario. Given the rapid rise in crude prices and accompanying increase in fuel values, some refiners preferred to divert more feedstocks into fuel production, reducing base oil output as a result.

The API Group I and Group II grades showed increasingly tighter conditions, while supply of the Group III grades appeared to be better balanced against requirements. However, there were questions whether this situation would change, as several upcoming turnarounds at Group III plants in Asia and the Middle East may limit availability.

Spot supply of all grades was said to have become more limited, offering further support to prices and prompting suppliers to evaluate export opportunities more carefully. Mexican buyers appeared anxious to secure U.S. product as availability was expected to become strained and they have been more flexible in terms of the price levels that they were willing to accept. There has been renewed buying interest from South America as well, but U.S. suppliers did not have many spot cargoes to offer.

Sellers also commented that demand for most grades was healthy, despite the recent upward price adjustments and some lingering supply chain disruptions. The revitalized base oil requirements were partly due to the start of the spring lubricant production cycle, but also because some buyers had delayed purchases in previous months in hopes that a clearer lubricant market picture would emerge. These buyers were now returning to the market to replenish stocks, sources said.

As many supply chain disruptions have plagued lubricant operations since last year, a few manufacturers have had to cut back production rates or implement allocation programs to meet commitments, and the uncertainties persisted for some manufacturers. Market sources said that raw material shortages, as well as a lack of truck drivers and other transportation issues were still a problem. Fresh pandemic-related lockdowns in China were also expected to have a ripple effect on manufacturing operations worldwide, as Chinese factory workers may be unable to return to work for a few days, causing a shortage of certain components which were already in scant supply.

On the naphthenic side, producers Cross Oil, Calumet, Ergon and San Joaquin had raised all naphthenic base oil prices by 35 cents/gal between March 11 and March 14, driven by the mounting costs of crude oil, natural gas, transportation and labor. Snug supply levels following a couple of turnarounds in previous weeks offered further support to the initiatives. The exit of naphthenic producer Nynas from the Americas by the end of the month may tighten the market further. The company decided to end sales in the region due to increased naphthenic base oils demand in Europe and difficulties in remaining competitive given the rising cost of crude oil and freight rates as the producer does not have production facilities outside of Europe.

After witnessing the sustained rise in base oils and other raw material values, it was not surprising to see increases emerge in downstream lubricant and grease segments in recent weeks. First off, several independent lubricant manufacturers, as well as a number of majors, announced a round of increases of up to 18% on finished lubricants to be implemented between March 1 and March 28. Additionally, a number of suppliers will increase prices on finished products by up to 15% to 25% between April 1 and April 18. Chevron was heard to have rescinded its lubricants price increase scheduled to go into effect on March 28 and communicated a revised price markup of up to 25% instead, effective on the same date. ExxonMobil was heard to have communicated a price increase of 25% as well, with an effective date of April 15.

Additive producers, for their part, also reacted to the higher base oil prices and other escalating costs by announcing fresh price increases. Two major lubricant additive producers communicated increases of up to 15%, effective March 31 and April 15, respectively. A third additive supplier intends to raise prices by 12% (depending on terms and other conditions) on April 18. Additive producers had previously introduced price increases of up to 15% between January 31 and February 21.

Base oil market producers and consumers alike kept an anxious eye on crude oil prices, as values showed sharp fluctuations, jumping one day and plummeting the next on geopolitical turmoil and fresh COVID-19 related lockdowns.

Crude oil futures slipped on Tuesday, extending losses from Monday on signs that some progress might be achieved as negotiations between Russia and Ukraine to end the war brought on by Russia took place in Turkey. Gasoline demand was also steady in the U.S. and Europe, but fuel consumption was expected to drop in China after the government implements lockdowns in major cities like Shanghai due to rising COVID-19 infections.

On March 29, West Texas Intermediate (WTI) April futures settled at $104.24/barrel, compared to $111.76/barrel on March 22.

Brent futures for May delivery settled at $110.23/barrel on the CME on March 29, from $115.48/bbl on March 22.

Louisiana Light Sweet crude wholesale spot prices were hovering at $109.20/barrel on March 28 and had settled at $114.24/bbl on March 21, according to the Energy Information Administration.

Gabriela Wheeler can be reached directly at gabriela@LubesnGreases.com.

Lubes’n’Greases Publications shall not be liable for commercial decisions based on the contents of this report.

Archived base oil price reports can be found through this link: https://www.lubesngreases.com/category/base-stocks/other/base-oil-pricing-report/

Historic and current base oil pricing data are available for purchase in Excel format.