Base Oil Pricing Report

Base Oil Report


It is undoubtedly a cliche to state that the world is getting smaller, but in addition to distances seeming shorter, the universe we live in is becoming more interconnected as well.

Something that happens today may affect what takes place tomorrow, as well as what happens thousands of miles away. If you are traveling and your flight gets delayed, you may miss your next connection, unleashing a string of irritating problems. The next flight you catch may arrive late at night, and you may get to your hotel only to discover that your reservation has been cancelled, leaving you stranded in a strange city far from home.

Similarly, in the base oils and lubricants industry, a small incident that takes place at your plant could trigger a long chain of unplanned events that may ultimately affect businesses across the globe.

Everything seems to be intricately connected. What is happening in one region is likely to have a knock-on effect on other regions, and trading opportunities may open up in the most unexpected places.

In recent years, Middle East product shipments to destinations inAsia, such as China, have grown substantially. This growth, together with the start-up of new production at Chinese base oil plants this year, has reduced the need for China to import large volumes of base stock from other suppliers in Asia-Pacific.

As a result, South Korean and Taiwanese producers and traders have found themselves on the lookout for new outlets for their base oils. Nevertheless, it is still a bit surprising that a couple of South Korean and Taiwanese API Group II cargoes were rumored to have been spotted in Brownsville, Texas-an area that is generally supplied by United States producers.

This is just a small and perhaps isolated occurrence-as it has not been determined whether these product movements will become regular-but it goes to demonstrate that some actions may be triggering huge changes in the general business environment and that participants in different regions may be more closely linked than anyone thought.

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