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Russian/CIS base oil & lubricant market insights

Recently, Shamrock attended the CIS Base Oils and Lubricants Conference, hosted in Moscow, Russia. Andrey Savin, Trader at Shamrock, was also invited to participate in a panel discussion as a global base oil market expert.

The event saw more than 250 delegates from 34 countries attend, from the biggest producers and blenders. It was a fantastic opportunity for Shamrock to touch base with existing partners and customers, as well as explore new business opportunities.

Many topics were discussed, not least of which was a focus on the changes in the base oil market in Russia and CIS. The PVL, CVL and IND sectors require shifts to high quality lubricants and so refineries have new projects for Group II and Group III production in Russia, Kazakhstan and Uzbekistan. At the same time, however, Russian refineries do not seem to be considering any Group I development in terms of quality and market grades.

Our opinion is that, in the coming years, a shift from Group I to groups II and III is obvious; however, we see that Group I base oils are still in demand, especially from the industrial sectors in developed countries and from almost all sectors in developing economies. Refineries need to pay attention to grades, such as SN500 and BS150 to take their position on the market. These grades still have a market because they are used for specific applications and cannot be easily replaced by a Group II or Group III base oil.

Another hot topic was the re-refining of used oils. It remains a main issue in developing countries because there are no real government regulations and no systematic collections of used oils either in Russia or CIS countries. Meanwhile there are several companies investing, or planning to invest, in this niche market. These isolated projects are seen in Kazakhstan, Uzbekistan and Russia, but there needs to be a more widespread and uniform effort across all countries to turn the re-refining of used oils into an efficient and effective business. The main applications for re-refined base oils are local lubricant and MWF producers. For the time being, and due to the lack of government controls over the collection of used oils, they are still mainly mixed with fuels, used as furnace oils, and involved in some low quality lubricants and MWF production.

At Shamrock, we are working with a number of re-refineries and are always able to source the right products for our customers’ requirements at the best value, providing the most favourable logistics and financing terms along the way.

Finally, high ecological standards for finished lubricants was discussed as a major global trend with a huge market potential. A growing number of cars and trucks in Russia and CIS countries are in need of high performance motor oils, fluids and other related products, which is pushing the market to develop further.

Whatever the shifts in market trends, the Shamrock team are continuously staying on top to ensure our partners and customers have the best expertise and market knowledge they need to remain competitive.

Shamrock Oils send our thoughts and prayers to the people of UkraineOur thoughts and prayers are with the people of Ukraine