Oil markets are experiencing the ongoing impacts of the global COVID-19 pandemic and attacks on oil facilities in Saudi Arabia, resulting in the price of finished lubricants to rise.
The pandemic has drastically reduced demand for oil, forcing some refineries to close, creating lubricant supply issues. The drone attacks by Houthi rebels against Saudi Arabia oil facilities in early March caused further supply issues and regional instability that has caused crude prices to surpass $70 per barrel for the first time in over a year.
(The recent bout of freezing temperatures along the Texas Gulf Coast hasn’t had as big of an impact on the lubricant markets like it did with the chemical supply chain.)
This combination of events is causing lubricant increases that haven’t been seen in several years. According to lubricant trade journal JobbersWorld, ExxonMobil, Shell, Chevron, and all other suppliers have announced finished lubricant price increases by as much as 20%, although the increases will vary by product. Many of the increases will be going into effect on April 1 and 2, 2021.
ExxonMobil attributed the price adjustment coming in April to increases in costs for raw materials, transportation, and manufacturing. Even before the March 2021 attacks on Saudi Arabian infrastructure, ExxonMobil was already planning to increase its lubricant prices from +15% to +20%.
Wayne Haviland, Lubricants Business Manager, said Tilley Company is working with suppliers to keep the price increases as low as possible. The company is also offering lower price options on as many products as possible, like it does with the MileGuard brand.
“We will do all we can to be competitive and keep our customers informed,” Haviland said. “We will continue to offer the best service in the market and the highest quality products.”
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Tilley Company is committed to working with its customers during what could be a difficult time for your business.If you have further questions or concerns, reach out to your account manager or a customer solutions representative by calling 800-638-6968.