A global base oils shortage is starting to filter through to drivers of luxury cars, with analysts and industry groups warning that stocks could soon run dry if the Iran war drags on.
Ongoing disruption through the strategically vital Strait of Hormuz has triggered what the International Energy Agency has described as “the biggest energy security threat in history,” although the supply shock stretches far beyond crude oil, fertilizer and helium.
Base oils are the primary component used to produce high-performance lubricants for engine oils and industrial fluids.
Group III and Group IV base oils, such as polyalphaolefins (PAO), are key feedstocks for synthetic finished lubricants used for automotive purposes, with PAO particularly important for luxury vehicles.
The Gulf region accounts for as much as 20% of global Group III base oils capacity and accounts for 72% and 47% of Group III imports by Europe and the U.S., respectively, last year, according to Argus Media.
