At AET Systems, Inc. we take our relationship with our customers extremely important. We strive to produce and introduce the best technologies into the lubricant market, but we also work around the clock to keep our customers updated on what is happening in the Oil Industry.
We feel this is crucial so our customers know what new technologies are available, can plan for shortages, and can capitalize on good prices or beat a price hike. In fact, AET has specialists on our team that track and project oil/lubricant trends daily!
Typically, our industry reports go out to commercial customers who rely on our products to keep their equipment, trucks, and business running every day. However, all our customers, big or small, are equally important to us.
Therefore, in today’s blog, we are sharing this insider information with all our customers—big or small, individuals or businesses because you deserve to know!
What does the oil industry involve?
Before diving into the state of the oil industry it is important to know what the oil industry involves. While many people believe the oil industry comprises gas, diesel, and oil production there are many more aspects to the oil industry and crude oil refinement.
Here is a sample list of products that come out of crude oil refinement:
- Diesel fuel
- Jet fuel/kerosene
- Lubricating oils
- Heavy oils for heating and asphalt production
- Other miscellaneous hydrocarbon products
The list is organized by the volume of each removed from the barrel of oil. The product we get the most of is gasoline followed by diesel and so on. While you may recognize many of the terms, one of the most important and highest volume products you may not recognize. Petrochemicals are the 3rd highest volume product distilled from crude oil, but what are they? Petrochemicals are used to produce the following products:
- Soaps, detergents, and solvents
- Pharmaceuticals (medications)
- Fertilizers, pesticides, and explosives
- Synthetic fibers, rubbers, and epoxy resins
- Paints, flooring, and insulation materials
Is the oil industry a little more diverse than you thought? Now that we see all the things that rely on crude oil refinement it is easy to understand how important the oil industry is currently to daily life.
Are there currently supply issues in the Oil Industry?
Yes, there are currently shortages in the oil industry, however, this is not necessarily uncommon as there are many shortages across nearly every industry. The important thing to remember is that we get a wide range of products out of crude oil refinement.
However, refinement is generally driven by gasoline and diesel fuel demand as they are the highest volume of products refined out of a barrel of crude oil. Therefore, if demand for diesel or gasoline drops, we experience shortages of the lesser volume products (such as jet fuels, petrochemicals, etc.) that are refined out of crude oil.
Right now, in the oil industry, there are shortages of lubricating oils and petrochemicals. These shortages affect the prices of many common items. Common items currently in short supply include
- Epoxies and resins
- Plastics for tubes, bottles, and containers
- Engine oils, lubricating sprays, and cleaners
What does it mean? Simply put, prices may go up and certain brands may be temporarily out of stock on some items. That said, supply, in general, seems to be strengthening, and while certain brands experience shortages of certain products the shortages should not be widespread.
At AET we are currently not experiencing any shortages. AET is built differently than most lubricant companies as we have direct access to refineries on a global scale and we oversee our product development and production. Therefore, while companies that use a lot of “middlemen” may have supply issues we can maintain a strong and consistent product inventory.
An example of how AET stays ahead of the curve can be seen in our grease development. Many greases are made with lithium, however, with the rise of electric cars and lithium batteries lithium is in short supply and very expensive. Therefore, we switched greases like G200EP and KH150 to calcium, which is stable in price and nearly all tests will outperform a lithium grease. This is one of the reasons our grease price is stable and our products are in stock!
What new technology is coming out of the oil industry?
During the COVID-19 pandemic, many companies focused on supplying current products and as a result, new technologies took a back seat to standard products. However, now as things get back to normal many new technologies are coming out of the oil industry. Let’s specifically look at the lubricant portion of the oil industry.
Lubricants are going micro and nano. We are finding that when we provide lubrication on a super small level, we can better lubricate a surface and do so for a much longer time. For example, look at our micro-ceramic products. Our Micro Ceramic uses both micro and nanotechnology to provide lubrication and can reduce friction to some of the lowest levels possible!
Additionally, our Micro Ceramic lasts an extremely long time. When AirTec Micro Ceramic is used in engine oil it coats the inside of the engine for up to 40,000 miles or nearly 1,000 hours of use.
Note: You still have to change the engine oil as directed in your owner’s manual.
An interesting fact about micro and nanotechnology is that when these products are used they can reduce the amount of lubrication needed! Therefore, these products can help reduce shortages in the future!
Prepare to hear more and more about micro and nanotechnology, they are the future of the lubrication industry! Products we provide that use micro or nanotechnology include: AirTec Micro Ceramic Oil Additives, Wagner Universal Ceramic Spray, and AirTec LI400 Grease.
Are prices going to increase?
The general feeling in the oil industry is that there is going to be mismatched demand and supply. This means that there could be oversupply if demand drops which means cheaper prices or there could be a lack of supply with a steady demand which means higher prices.
Globally oil production is scaling back as many fear a recession or drop in demand is coming. This means prices will be going higher or staying close to the same for the rest of the year.
The Oil Industry is changing, however, at AET we are confident we have the right strategy to maintain supply and provide products with the latest technology. Thank you for choosing us as your partner in maintenance, as always, if you have any questions just let us know.