We would like to thank our esteemed group of panellists for their incredible insights and efforts to bring our first webinar together to discuss the ongoing conflict. The global lubricant supply chain has seen a number of disruptions to their day-to-day operations and our speakers gave their insights into this and what tangible outcomes you can achieve.
The Uncomfortable Question
The lubricant industry has become used to relative stability – predictable supply chains, reliable delivery timeframes and manageable price fluctuations.
But what happens when that stability disappears?
As Bhupinder Singh opened the discussion, the real question is not simply what is changing, how the industry adapts to this new normal.
Today, blenders cannot rely on a consistent supply of base oils. Stability is no longer a given and systems designed for efficiency are being pushed beyond their limits.
The closing of the Straits of Hormuz is not just disruption – it is a stress test of the entire system itself. The domestic and global lubricant industries must adapt to meet the challenge.
From Efficiency to Resilience
For decades, success in the lubricant industry was driven by optimisation:
- Lean supply chains
- Cost efficiency
- Just-in-time delivery
That model is now being challenged.
The conversation with a panel of industry experts made one thing clear: a fundamental shift from efficiency to resilience is taking place. This means a shift away from cost optimisation and towards supply security.
How does the lubricant industry deal with disruption stops being temporary and becomes structural?
What’s Driving the Disruption?
Insights from across the value chain revealed that disruption is not coming from a single source – but from a combination of pressures.
Supply Constraints
According to Nikhil Agarwal, the market is facing a genuine supply disruption, particularly in Group II and Group III base oils.
- Limited inflows into key regions
- Refinery output shifting toward fuels due to higher crude margins
- Major production outages impacting global supply
Logistics Breakdown
- Port disruptions and rerouting challenges
- Freight costs increasing by multiples (not percentages)
- Inventory stuck in transit or at ports
Allocation & Pricing Dynamics
- Priority given to long-term contracts
- Spot pricing significantly higher than term agreements
- Increasing difficulty in forecasting or committing to prices
Perspectives from the Value Chain
One of the most valuable aspects of the discussion was hearing how disruption is experienced differently across the industry.
Blending & Formulation
Loutfi El Sayed highlighted the growing complexity:
- Price unpredictability making forward commitments difficult
- Additives becoming a critical bottleneck
- Increasing need for formulation flexibility
“There is no longer a single constraint – it’s a combination of everything.”
Trading & Supply Chain
From a trading perspective, logistics has become the key differentiator:
- Companies that can move product effectively are outperforming
- Access is no longer just about supply but about execution
Additives & Technical Systems
Erik Sudheimer offered a slightly different view:
- Supply is manageable if strong supplier relationships exist
- The real risk lies in compromising on quality under pressure
Market & Customer Behaviour
Wajahat Haider reframed the discussion:
- Lubricants are not purely commodities – they are brand-driven products
- In many markets, availability matters more than price
- Customer behaviour varies significantly by region and segment
How the Industry is Responding
Despite the challenges, companies are adapting quickly.
Key strategies emerging from the discussion include:
- Increasing inventory and storage capacity
- Diversifying supply sources and routes
- Reformulating products where necessary
- Strengthening communication with customers
- Leveraging digital tools and AI for planning and forecasting
Transparency, in particular, has become critical, keeping customers informed early and often.
From Buyer’s Market to Seller’s Market
One of the more unexpected insights came from Erik:
The market dynamic has flipped.
- Previously: suppliers competed for attention
- Now: customers are actively seeking available product
This shift creates new opportunities:
- Lower barriers to entry in certain segments
- Greater willingness from customers to trial new suppliers
- Increased demand for available, reliable product
However, this opportunity comes with risk, particularly if quality is compromised.
The Biggest Risks Ahead
Looking forward, several critical risks stand out:
- Prolonged uncertainty with no clear equilibrium
- Running out of stock at key moments
- Over-reliance on specific base oil groups (especially Group III)
- Quality risks from rushed substitutions or cost-cutting
- Hidden cost pressures (e.g. packaging, plastics, downstream inputs)
As highlighted across the panel, the worst-case scenario is not high prices it is inability to supply.
Resilience is No Longer Optional
What this discussion ultimately revealed is that disruption is not just exposing weaknesses, it is redefining the rules of the industry.
Resilience is no longer a competitive advantage.
Flexibility is no longer optional.
They are now baseline requirements for survival.
The companies that succeed will not necessarily be the most efficient—but the most adaptable:
- Across supply chains
- Across formulations
- Across market strategies
Because in this new environment, the question is no longer how to optimise – but how to endure and evolve.
‘’The lubricant industry isn’t just navigating disruption – it’s being reshaped by it.’’
