DYM Resources’ director for base oils and lubricants Denis Varaksin commented on the situation in the base oil market in the wake of the war in Ukraine.
A few Western energy companies such as BP, Shell and Equinor decided to exit joint ventures in Russia as a sign of protest against Russia’s military actions. Besides, The EU, The USA, Canada and Australia imposed sanctions on Russia that can severely impact its economy. However, the export and import of energy products including base oils have not been affected.
According to DYM Resources’ information, at the moment refineries have enough raw materials to produce base oils. In Lubes’n’Greases’ article Varaksin said that Russian base oil refiners “are studying alternative financial channels for making payments and making possible alternation of the logistics for product export”.
“The import of finished products stagnates, as it has been, on the heels of the import substation drive in Russia after 2014,” Varaksin said.
Yet the situation with import of finished products and export of base oils and lubricants depends a lot on the outcome of Russia’s actions. In case of additional sanctions from the West, Russian base oil exports might decrease by 20% in 2022. The demand for lubricants in Russia can fall by 5% to 10% in 2022.
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