Spanish refiner Repsol SA declared force majeure on its domestic base oil operations last week following a massive power outage that plunged not only homes and business but also industrial infrastructure across the Iberian Peninsula. The disruption has added pressure to a global base oils market that is grappling with uncertain market conditions.
The declaration came after production was disrupted at multiple facilities, though operations have since resumed, reported commodities intelligence company Argus.
Argus noted that while production is back online, the force majeure remains in place for now. Its continuation will depend on how quickly output can be stabilized and whether the base oil meets required quality specifications, Repsol said.
The blackout affected Repsol’s 80,000-metric-ton API Group I plant in Puertollano. Operations were disrupted at its larger Cartagena complex, according to Reuters reports, which includes 135,000-ton Group I and 630,000-ton Group II and III units operated through a joint venture with South Korea’s SK Enmove.
SK did not declare force majeure and has had no issues supplying customers.
Scheduled maintenance at other major producers is compounding the shortage.
Bahrain’s Bapco is conducting a 45-day turnaround at its 400,000-tons-per-year facility and SK Enmove is set to begin work at its 1.3 million t/y Ulsan plant in mid-May. With Europe importing most of its Group III needs and seasonal lubricant demand rising, prices for the premium grade are expected to remain elevated.
(Updated May 14)