Madrid – Europe is still the biggest consumer and producer of API Group I base oils, even as demand is falling, leading to an oversupplied market, according to data shared by Kline & Co. at a recent industry conference in Spain.
After Asia-Pacific and North America, Europe as a singular market is the third-largest base oil consumer, at between 5 million and 6 million metric tons per year, Sharbel Luzuriaga, industry manager for Kline & Co., told delegates the the European Base Oils and Lubricants conference in Madrid.
Demand for Group I base stocks has sharply declined in the region, although there remains some adherence in Eastern Europe. Turkey, where Tupras is the sole domestic Group I producer, saw growth of about 1.2%, followed by Poland and the Czech Republic. Demand in France, on the other hand, is falling.
The transition away from Group I has been the fastest in the consumer automotive segment in the continent, Luzuriaga said, while in other segments, that transition is slower but still happening. In 2023, for example, Europe had the largest high-performance, low-viscosity lubricants uptake of all global markets.
Europe’s surplus Group I material is exported, typically to West Africa and the Middle East. But traders are finding it challenging to deal with these destinations due to currency volatility in the case of the former and readily available cheap Russian product in the former.