May. 19 at 11:36 PM
Chevron and Motiva have cut base oil shipments for motor oil production to minimum contractual levels, tightening already strained global supply of Group II and Group III feedstocks.
The companies are prioritizing only essential deliveries as the war in Iran continues to disrupt crude flows and key refining routes, especially through the Strait of Hormuz. Industry sources say this has created one of the most severe tightness episodes in decades for Group III base oils, a critical ingredient in synthetic lubricants.
Analysts note that this is not a full supply stoppage, but rather a rationing of contracted volumes, with producers allocating the lowest permissible delivery tiers to customers. The situation is being driven by refinery disruptions, reduced export capacity in the Middle East, and strong demand for diesel and other higher-margin fuels, which is pulling refinery output away from base oil production.
$CVX