Russian lubricant demand stood at 1.7 million tons total in 2022, virtually unchanged from 2021, B2X said during a presentation at the RPI’s Industrial Oils and Metalworking Fluids conference in Moscow May 23. RPI shared the presentation with Lube Report.

Industrial lubricant demand last year was 722,000 tons, compared to 719,000 tons in 2021. Domestic production of those products fell towas 840,000 tons, mostly because of decreases in export sales caused by sanctions over Russia’s invasion of Ukraine, the firm found. Industrial lube exports collapsed by 51% to 170,000 tons, according to B2X. Industrial oil imports fell too – 39% to 50,000 tons.

There were signs that the situation for Russia was improving, though. B2X found that the import of industrial oils in the country fell by 50% in the first half of 2022 then was down by a smaller amount in the second half of the year, “thanks to the shipments from South Korea, the entrance of new players on the market and the introduction of the ‘parallel import’ scheme.”

The parallel import program includes updates of government approved lists of sanctioned products that may be imported and sold within the country through third countries without regard for trademark and copyright protections. This list, for example, includes some motor oil products of ExxonMobil and Shell.

In the report, B2X uses its own and data by the Russian Ministry of economic development, the customs agency, and the federal state statistics.

Earlier this year state statistics said the Russian economy shrank 2.1% in 2022.

In 2022, Russian passenger car lubricant demand increased 3% to 359,000 tons, while the country’s commercial vehicle lube demand decreased 2% to 649,000, B2X said.

Russia’s post-pandemic economic grievances were exacerbated last year by the country’s invasion of Ukraine. This act triggered swift Western sanctions against the Russian industrial and military complexes, the banking sector as well as its oil production and trade industries, while international oil majors such as Shell, ExxonMobil and TotalEnergies pulled out from the country in protest, as did main lubricant suppliers.

Using the economic development ministry data, B2X expects Russian industrial production to rebound 2% to 3% year-on-year in 2023, “oriented at localization of the production and stimulation of the domestic consumption, a main driver of the lubricant production.”

Other expected developments for 2023 are renewal of the industrial equipment made by the local original equipment manufacturers and the OEMs from the” friendly countries,” development of local production of parts and additives, market consolidation and reduction of the lube brands active on the market.

In the backdrop of the war in Ukraine, the main risks are the uncertainty and the possible expansion of the Western sanctions, B2X said.