More than 40% of US Group II base oil refining capacity shut ahead of Hurricane Laura

HOUSTON (ICIS)–US Group II base oil supply could take a hit as Hurricane Laura targets the US Gulf Coast refining complex.

Landfall is expected Thursday along the Texas/Louisiana border.

As of presstime, Motiva and Excel Paralubes had shut their complexes. Motiva is in Jefferson county, Texas, where mandatory evacuation orders are in place, while Excel Paralubes is in Calcasieu parish, Louisiana, where voluntary evacuation orders are in place.

ExxonMobil‘s Baytown, Texas, plant  is also in the path of the storm but continued to run normally while monitoring the storms.

The two shut sites represent 29% of total US base oil refining capacity, including rerefined base oils, according to the ICIS Supply and Demand Database.

Drilling down, they represent 42% of US Group II base oil refining capacity, including rerefined base oils.

Other base oil plants along the coast – including ExxonMobil’s Group I plant in Baton Rouge, Louisiana, and Chevron’s Group II plant in Pascagoula, Mississippi – are not in the storm’s path.

US base oil supplies have tapered to a more balanced position over the last several months because of reduced refinery rates stemming from coronavirus but has been sufficient to meet recovering domestic demand.

Any length of Group I and II is being cleared into export markets amid strong overseas demand.

A prolonged shutdown of two major Group II suppliers could tighten the market, especially overseas where demand has been strong for US Group II material. Supply has tightened in India and the Middle East.

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Base oils are used to produce finished lubes and greases for automobiles and other machinery.