BASE OILS


The events of 2022 have had a significant impact on the growth rates of key economies across the globe. The frequent changes in energy prices injected high volatility into the European market as the Russo-Ukrainian war remained the major driving factor for these rapid price movements, while the dependency of Europe on Russia for its energy needs was hampering its economic growth.


European markets faced difficulties in gathering momentum after the escalation of Russo-Ukranian war, where the West jointly agreed to put an embargo on Russian crude oil. Since the sanctions have hit Russian oil sales, a significant drop in exports from Russia to Europe has been observed. The crude oil trade statistics post-invasion and sanctions show a drop of more than 20% during the March-September 2022 compared to the same timeframe for 2021 from Russia to Europe. However, overall Russian


exports have risen to other nations as major Asian economies started procuring Russian crude due to its comparatively cheaper value.


The first six months of 2022 in particular were a major factor in causing severe uncertainties in the European market, like escalating energy prices, lumpy recovery from COVID-19, and high inflation, which prepared an uneven road for economic growth. The data shows Base Oil, as well as crude oil prices, shared a similar price trend for almost every month (except in some cases) during the year 2022. During the first half of the year, global crude oil prices took a sharp upturn which had a knock-on effect on the price of European Base Oil as well. As per the data, Group I base oils Light SN export prices in Belgium rose by more than 100% (from USD 667/MT to USD 1348/MT) within the span of 6 Months, while Group II base oils Light SN prices rose by more than 63%


Figure 1: Price comparison of Crude Oil and Base Oil for the Year 2022


Source: ChemAnalyst and EIA Continued on page 11


LUBE MAGAZINE NO.173 FEBRUARY 2023 9


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