Just beyond the top five were Chinese national oil companies Petrochina and Sinopoec at 4 percent each. These are companies, especially Sinopec I would say, who have clearly stated their ambitions of getting into country markets outside of China, said Geeta Agashe, vice president of Kline & Co.s energy research practice in Parsippany, N.J., during a web presentation last month.

Overall, the global mega majors – Shell, ExxonMobil and BP – account for about 31 percent of the global finished lubricants market by volume, Kline found. Other multinationals such as Chevron, ConocoPhillips, Total and Valvoline account for about 21 percent. Nationalized oil companies and independents account for about 48 percent.

Agashe suggested the mega majors will want to keep an eye on regional players as well as some of the national oil companies. National oil companies need to be respected, they need to be taken seriously, and you cannot take them lightly, she emphasized, adding thats because they have in place the right supply chain, research and development, and technology. Theyre really focused now on branding and promotion, which in the past used to be more the forte of the mega majors. But you see a lot of these national oil companies coming out with slick advertising and promotion branding.

Looking at finished lubricant demand by region, Asia-Pacific led with 43 percent, followed by North America at 27 percent, Europe with 15 percent, Africa and the Middle East with 8 percent and South America at 7 percent.

Asia remains the growth engine of the global lubricants industry. Overall, the basics and fundamentals are pretty strong for this region as a whole. So when youre thinking about your company, youre thinking about your growth plans, I think its absolutely critical to have Asia form a very, very big component of your growth plans, Agashe told the webinar audience. From a volume standpoint, from a quality standpoint, this market is expected to improve.

Agashe said significant finished lubricant quality improvements are occurring in Asia, which are absolutely accelerating because they have to meet global customer requirements. Obviously, this has an impact on the factory fill lubricants consumed in Asia, as more and more automotive OEMs are going for global specs.

In many cases, a leapfrogging in technology is occurring, resulting in a dramatic shift. Theyre moving straight from 20W to 5W grades, she pointed out. Thats going to have a significant impact on the quality of the grades being consumed in that part of the world.

She noted that improvement in lubricants quality is also occurring on the industrial side in Asia. These countries are importing the latest machines, equipment and turbines, and are using very sophisticated oils.

North Americas lubricants market outlook is bleaker. We feel demand is essentially going to be flat, highly dependent on U.S. economic stability and recovery, she said. Kline foresees increasing penetration of synthetics on the automotive side suppressing volume but boosting value, with more OEMs using 0W grades for factory fill and new OEM specifications such as General Motors Dexos 1. Mexicos market is expected to show substantial growth.

In South America, Brazils lubricants market is showing significant growth in the industrial, agricultural, construction and automotive segments in particular. We are also seeing higher quality base stocks being imported into Brazil, Agashe said. Petronas, the Malaysian oil giant, is exporting a lot of Group IIIs for factory fill purposes into Brazil. We are also aware of Petrobras finally making the announcement theyre going to be producing Group II at their refinery. So clearly its a market thats growing, not only from a volume standpoint but also from a quality standpoint. In addition, countries with significant mining, such as Chile and Peru, are driving demand for industrial lubes.

Kline expects demand for finished lubricants in most European countries to continue to languish through 2020. A possibly strong exception could be Russia, where Vladimir Putin is expected to come back to power as president. We know what he did with a lot of the state-owned monopolies when he was in power four years ago, Agashe noted. Russia, with their modernization program, might swing back.