Lubricant oil prices are up 15% to 20% on this time last year, and are expected to rise by another 15% as the aviation industry remains grounded.
The COVID-19 pandemic has sapped demand for jet fuel as countries stumble through rolling lockdowns and international travel is cancelled.
As a result, lubricant oil manufacturers across Europe have temporarily suspended production, causing a sharp increase in the price for tractor oils paid by Irish farmers.
Tipperary oil supplier Bernard Brennan Lubricants Limited told the Irish Farmers Journal that European manufacturers have now suspended production at eight factories.
It could increase by up to 35% on March 2020 at its peak in 2021
“Agricultural demand for lubricant oil has remained the same, while price has risen by up to 20% across the board from hydraulic oil to grease,” Brennan said.
“This is the most significant price rise I’ve seen during my 20 years in the business.
“The price will continue to rise as aviation remains grounded.
“It could increase by up to 35% on March 2020 at its peak in 2021.
“Contractors will feel it the most with multiple machines to service. Prices are up anywhere from €50 to €120 per barrel.”
McCormack Oil in Kingscourt, Co Cavan, told the Irish Farmers Journal that the most significant price jump came on 1 March.
Oil is usually very stable so it’s shocking to see these prices jump
“AdBlue was the first jump, up by 1c/l and then they all followed suit. The 20l drums of oil are up 30c/l and 200l barrels are up €30 in total,” Gordon McCormack said.
“I buy all agricultural lubricants from Maxol and they emailed me in February warning about a price jump. I bought in a good bit that time, luckily enough.
“Oil is usually very stable so it’s shocking to see these prices jump.”
McCormack suspects that the Evergreen Ever Given ship has further contributed to the price spike but hopes that its dislodgement from Egypt’s Suez Canal on Monday will help return stability.