Logistics disruptions caused by Russia’s war in Ukraine, higher base oil prices, along with increased packaging, energy and transportation costs all contributed to lower domestic output and increased imports, Arif Mamedov, a businessman who imports German motor oils in the country, told Lube Report.

“The majority of the domestic producers imports base oils from Russia,” he said. “They are facing problems with increased raw material prices, as well as increased prices for energy, packaging, and transportation. All of this affects production.”

Prices for domestic finished lubricants increased between 20% and 30%, he added.

In the first six months of the year, the country exported 13,982 tons of finished lubricants or 17% less compared to the same period in 2021.

Another market observer claims that the market is susceptible to fake oils and products made with poorly processed used oils.

“Such kinds of oils mostly come from Turkey,” said Elyshad Yosifov, another distributor who imports lubricating materials from Turkey, Russia and other European countries.

Azerbaijan’s main lube producers are Technol and Aminol, both of which operate blending plants near the capitol city of Baku.

Technol is privately owned and has capacity to make 50,000 tons of finished product annually. Aminol recently said its output reached 30,000 tons last year and that it prepares to expand the production to 50,000 t/y.

A Technol official previously said Azerbaijan had around 70,000 tons of annual lubricants demand in 2019.