After internal demand stayed sluggish at 1.7 million tons over the last few years, it was reduced to 1.5 million tons in 2014, Boris Sobolev, head of the consultancys oil refining and petrochemicals research department, told Lube Report last week. It is a result of the low industrial output, primarily in the machine-building. Weak car sales also contributed.

In 2014 new car sales in Russia declined 10.3 percent to 2.5 million units, down from the 2.8 million units sold in 2013, according to the Association of European Business, a lobby group based in Moscow. It expects a further 24 percent slump in the countrys new car sales in 2015.

A few automakers, such as Volkswagen and the Renault Nissan Alliance, reduced operations at their assembly lines in Russia. American automaker General Motors, through its European operator Opel, closed its large factory in St. Petersburg and exited the country because of the rubles devaluation and uncertainty about how long that would continue. (Thanks to a recovery in oil prices and an easing of tensions in the Ukrainian crisis, the rubles exchange rate with the U.S. dollar strengthened to 50.43 Friday, a 28 percent improvement from its weakest point at the start of February.)

Some lube makers said they experienced slight decreases in production volumes last year.

We observe some cautiousness from our distributors; in 2014 they increasingly started to order less costly products, said Nikolay Milshin, director of marketing in Delfin Group, an independent lube maker. We answered by formulating such products, approved by the large OEMs such as Man or Mercedes, which can appease the customers, he said.

Delfin Group is the fifth-largest lube maker in Russia. It operates a 300,000 t/y lubricants, greases, technical fluids, coolants and car cleaning products plant in Moscow Oblast.

Gazpromneft-Lubricants is the third-largest lube maker in the county after Lukoil and Rosneft. In 2014 it produced 485,000 tons of base oils and lubricants, according to Alexander Trukhan, the companys general director. It is just 5,000 tons less than the year before, though that could be due in part to increased sales in foreign markets. We produce more complex formulations with higher operating properties, and actively develop our exporting capabilities, Trukhan told Lube Report.

Delfin and Gazprom both said they increased exports in 2014, at least partially offsetting problems in their home market. Gazprom exported more than 290,000 tons, or 60 percent of its total produced volumes in 2014. Last year Delfin shipped 10 percent of its total finished lubricants to countries such as Ukraine, Kazakhstan, Mongolia, Bulgaria, Georgia and parts of the Middle East.

Shell Neft, the Anglo-Dutch oil majors representative in Russia, told Lube Report that the company is staying in the country for the long term. The current political and economic situation has not affected the companys business and development of its production in Russia, said Oksana Kosurova, downstream communications advisor at Shell Neft.

In October 2012 Shell opened a 180,000 t/y lubricant blending complex in Torzhok, 240 kilometers northwest of Moscow.