The ability to withstand or recover quickly from disruptions in the lubricant supply chain is more challenging now than in the past, and the stakes are much higher due to a number of reasons, one of which is consolidation.
In addition to consolidation of lubricant marketers, as most are aware, there has been considerable consolidation of base oil suppliers over the past 35 years. In 1985 there were 37 base stock refineries in the United States with a total paraffinic base stock capacity of 169,000 barrels per day. Today there are 27 refineries with capacity totaling 277,000 b/d. Whats more, 87 percent of capacity is produced by seven plants, and five of those, which collectively account for 67 percent of API Group II capacity in the U.S. and Canada, reside in a corridor where hurricane activity is common. This means fewer plants are producing significantly greater volumes, and a large percentage of that volume is sourced from areas at high risk for hurricane damage.