In an open letter from the Union of the European Lubricant Industry (UEIL) to the European Commission, the union’s president, Mattia Adani, warns that sanctioned Russian base oil and finished lubricants entering the continent could seriously harm the competitiveness and stability of the industry.
European Union sanctions have redrawn Russia’s oil, refined fuels and base oil trade, targeting a core revenue stream for the Kremlin. The EU embargo on seaborne crude oil, most refined products and base oils has diverted volumes to buyers outside the bloc, typically at deep discounts.
The UEIL suspects that some blenders may be using Russian base oil imported into Europe via Egypt or Turkey, allowing them to sell goods at less than the cost of manufacture, Andreea Kaye, UEIL secretary general, told Lube Report. UEIL members in several EU states have observed unusually low-priced base oils or finished lubricants entering the EU market.
“Based on the information available, there are reasons to believe that some of these products may originate from Russia despite the existing sanctions framework,” Kaye said.
UEIL officials have since met with representatives from the cabinets of High Representative Kaja Kallas and Commissioner Maros Sefcovic to present the evidence and outline the union’s concerns.
“The discussion was constructive, and we received clear guidance on how to follow up with the relevant services within the European Commission, the European External Action Service and the European Anti-Fraud Office,” Kaye said.
UEIL outlined to the European Anti-Fraud Office how the practices it identified affect the EU’s economy, “which has significantly increased their interest in the matter.”
Ideally, the UEIL wants European authorities to launch a formal investigation into the potential circumvention of EU sanctions and the Anti-Fraud Office has requested further details to assess whether the information provided justifies opening such an investigation.
“We identified the issue through consistent reports from our members across several EU member states, who have been flagging unusual market behavior and pricing patterns,” Kaye said. “These concerns aligned with developments in the UK, where the Trade Remedies Authority conducted its own investigation and subsequently took action.”
At the end of last year, the UK government applied tariffs, in some cases almost 100%, on a small group of lubricant products imported from Lithuania and the United Arab Emirates. Much of the imported material originated from a company called SCT FZE and was distributed in the UK by its subsidiary Lubriage under the Mannol and Fanfaro brands.
“As the association representing the sector, UEIL has a responsibility to monitor such developments and act when there are indications of potential market distortion or sanctions circumvention,” Kaye said.