The producer said in a letter to customers on 7 April that it had declared force majeure on its AP/E Core 600 (SN 600), AP/E SN 500 and AP/E Core 2500 (bright stock) grades.
Eneos’ 127,500 b/d Wakayama refinery includes a 360,000 t/yr Group I base oil unit. The unit is one of ExxonMobil‘s sources of Group I base oils.
It remained unclear when the refinery will resume operations.
“The situation is evolving, and we are awaiting further information on a recovery plan,” the producer said in the letter. “We are still ascertaining at this time on how long the force majeure event will continue.”
The unexpected shutdown of the Wakayama refinery has coincided with the continuing shutdown of ExxonMobil’s 660,000 t/yr Group I plant at Pulau Ayer Chawan, Singapore, which has been off line since June 2020.
“It is not our practice to discuss commercial arrangements,” a spokesperson from ExxonMobil said.
Singapore’s base oil imports from Europe have surged since mid-2020. The city-state’s imports from Japan have also increased compared with the fourth quarter of last year.
Base oil prices everywhere from the US and Latin America to Europe and Asia have increased in recent months as a wave of planned and unexpected plant shutdowns left supplies unusually tight.