War Disrupts Azerbaijan Market


War Disrupts Azerbaijan Market
Traffic in Baku, the capital city of Azerbaijan. © AnarAliyev

Azerbaijan’s finished lubricant imports volume grew more than 60% in the first half of 2022, driven by a growing shortage of Russian base oils for domestic lube producers, according to an industry insider.

In the first half of 2022, Azerbaijan imported 29,801 tons of finished lubricants, or 63% more compared to the same period last year, according to government data.

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.

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