At the same time, industry sources said they are bracing for new strains after troubles developed the past week at two North American base oil plants – Petro-Canadas plant in Mississauga, Ontario, and ExxonMobils at Beaumont, Texas. (See articles this issue.)

We had said that the industry was in a fragile state after all those disruptions last year, and that we didnt want any [base oil suppliers] to have any problems right now, said an official for one lubricant blender, who asked not to be identified. Well, it certainly looks like we have some more problems.

Six of the continents seven largest lubricant marketers – BP was the lone exception – imposed sales allocations or worse during the second half of 2005 due to unprecedented disruptions in the industrys supply chain. Some attributed their actions to tight supply of additives – primarily the shutdown by Hurricane Katrina of Chevron Oronites Belle Chasse, La., plant, which aggravated an existing force majeure declaration. Others cited the havoc caused by Hurricane Rita, which closed four base oil plants accounting for 36 percent of North Americas paraffinic capacity.

Shells finished lubricants business in the United States, SOPUS Products, said last week that it lifted its last allocations – on passenger car motor oils and on coolants – on Jan. 1. Valvoline told Lube Report yesterday that it plans soon to inform customers that its allocations will be lifted Jan. 15. Industry sources have said previously that the company was capping orders at 100 percent of normal levels.

Also yesterday, ExxonMobil said it removed allocations on Mobil 1, Mobil Pegasus and 5W grades of engine oil, effective Jan. 1. The company added, though, that it is maintaining allocations of 100 percent on total product lifts in an effort to normalize inventory levels.

Lube distributors said Chevron lifted its allocations during the second half of December, although the company declined to confirm or deny those statements. Chevrons lubricant operations are as close to normal as we could wish, given the industrywide base oil supply situation, Chevron North American Lubricants Vice President Craig Duncan said.

Citgo had ended allocations Dec. 1 on all products except white oils – the production of which was hampered by feedstock supply issues. In a Dec. 28 letter, the company said conditions forced it to declare that several products – Duoprime 300, 350 and 500, and Tufflo 6036, 6046 and 6056 – are now unavailable in truck or rail car volumes. Allocations of 75 percent remain in place on other white oil products.

A ConocoPhillips spokesman said the company has ended a force majeure declaration made four months ago for its natural gas engine oils. Otherwise the company managed to avoid finished lube allocations last year.

Distributors noted that allocations are just one indication of suppliers abilities to deliver products, saying they sometimes are unable to order products even after allocations are lifted.

My supplier has turned me down for some products, and Ive talked to other [distributors] who have run into the same situation, one Midwestern distributor said. [Oil marketers] may say one thing, but the devil is in the details.