Russias total lubricants production volume in 2008 dropped by 3.1 percent compared to 2007s total, according to Kortes, a Moscow-based research center. Lubricants production in Russia through the first three quarters this year declined 14 percent, compared to the equivalent period last year.

Basically, production decline for 2009 is due to the lower outputs of commercial lubes, Natalya Shapkina, an analyst in Kortes lubes and oils department, told Lube Report. Regarding the demand, this year we observed a 24 percent drop [in comparison to 2008] as a result of the lower production volumes of base oils, which are mainly made for export. We observed lower demand practically in all types of lubricants, excluding industrial.

Kortes said production volumes for base oil and different types of lubricants over the first three quarters of 2009 in Russia were as follows:

• Base oils, 730,252 tons
• Engine oils (including automotive and diesel lubricants), 406,630 tons
• Industrial oils, 376,824 tons
• Transformer oils, 34,839 tons
• Turbine oils, 34,541 tons
• Hydraulic oils, 23,646 tons
• Compressor oils, 19,851 tons
• Transmission fluids, 19,214 tons
• Others (vacuum, cable, flushing and technological oils), 4,866
• Aviation oils, 4,866 tons

Production
Kortes prepared an annual balance sheet of Russias lubricant market, which is the third largest in the world. The balance sheet shows that the top three Russian lubricants producers for 2008 remain LukOil, Rosneft and Gazprom, which are all vertically integrated major oil companies.

LukOil produced 1.11 millions metric tons of lubricants in 2008, Kortes reported, 3.1 percent less than in 2007. Rosneft produced 469,000 tons in 2008, 53.4 percent more than in 2007. Russian-British joint venture TNK-BP in 2008 produced 277,650 tons in 2008, down 11.4 percent from the year before. Gazprom last year produced 330,000 tons, a 3.7 percent drop from 2007s total. The company totals represent finished lubricants and base oils totals combined.

Kortes noted that LukOil remains Russias top lubricants producer, with 45 percent of the market. State-owned Rosneft is second with 19 percent of the market, followed by Gazprom at 13.5 percent and TNK-BP at 11.4 percent. Privately-owned Russneft has 5.5 percent of the lubricant market, followed by Bashneft at 4.8 percent.

Imports
Total lubricant imports into Russia grew 11 percent to 266,000 metric tons in 2008. The three countries that supplied the most lubricants to Russia last year were Finland, South Korea and Germany. Lubricants from Finland totaled 113,000 tons, accounting for almost half of the imported volumes. South Korea exported 27,000 tons, and Germany exported 23,000 tons to Russia. Lubricants imports from the United States held seventh place, at 10,000 metric tons.

According to Kortes, the total volume of the finished lubricants and base oils supply in Russia in 2008 amounted to 2.67 million metric tons, 4.2 percent less then in 2007. The internal consumption volume in 2008 reached 1.45 millions tons, a 14 percent drop from the 2007 volume.

The slump is evident this year as well. Kortes available data show that Russias total lubes and base oil production for the first three quarters of 2009 is 1.67 million tons, a 14 percent drop from the year-earlier period.

The Russian lubricant market was mostly affected by the downturn in the countrys industrial production and reduced export volumes due to the lower demand on the international markets, Shapkina noted. Meanwhile, we still havent [received] any data about certain massive production drops at Russian plants and refineries

Exports
The top three lubricant exporters in Russia in terms of volume are LukOil, Rosneft and Gazprom. LukOil exported 720,000 metric tons of finished lubricants in 2008, a 15.5 percent increase from 2007. Rosneft exported 180,000 tons last year, up 73 percent growth from 2007. Gazprom exported 162,000 tons in 2008, 17.4 percent more than in 2007.

Total exports of finished lubricants from Russia in 2008 grew 12.2 percent to 1.22 million tons, compared to the 2007 total. Russian lubricants exported far abroad [all other countries excluding Commonwealth of Independent States participants] totaled 880,000 tons in 2008, 14.2 percent more than in 2007. Lubricants shipped from Russia to CIS countries reached 341,000 tons, up 7.2 percent from 2007s volume.

Lubricants exports from Russia to the Ukraine totaled 187,000 metric tons in 2008, increasing 40 percent from the previous year. Belgium imported 243,000 tons, and Greece took in 122,000 metric tons from Russia in 2008.

The biggest volume of the Russian lubricants is produced by vertically integrated companies plants with fuel-oil profiles, Shapkina concluded. There is virtually no independent lube producer which uses gas oil or black oil as primary products.