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Can Group 1 base oil come back?

The impact of the lower crude prices on the global base oil markets

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Sally Menassa

Saudi Arabia United Arab EmiratesPartner

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The global economy is benefiting from declining oil prices due to the higher economic multiplier in the typically poorer oil importing countries. Consequently, base oil consumption in the transportation sector, as an example, will increase through both growing purchasing power (new and second-hand car sales) and increasing car usage. Even though transportation fuel is a commodity with a low elasticity of around 0.1, the current steep drop in oil prices implies a demand increase of up to 5% over the next few years.

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