The car population in the Middle East is steadily shifting to new vehicles manufactured by Western and Japanese automakers – vehicles for which fuel-efficient, low-emissions engine oils were designed. Yet the region has been slow to convert to these lubricants because sulfur levels in its fuels remain so high. According to one industry insider, this makes business more complicated for lubricant marketers.
For the past several years, the lubricant industry has devoted much of its formulary focus to helping the auto industry reduce emissions of pollutants and greenhouse gasses. Engine oils have accomplished this both directly, by accommodating systems that capture pollutants such as soot, and indirectly, by improving fuel economy and thereby reducing the amount of carbon dioxide that is generated. In general, this has led to development of low-viscosity, multigrade oils that are low in sulfated ash, phosphorus and sulfur (SAPS).
Addressing the inaugural Base Oils and Lubes Middle East Conference in Bahrain in May, T.R. Kumar, manager of lubricants technology at Dubai-owned Emirates National Oil Co., said many motorists in the Middle East have been slow to buy into those oils. He drew contrasts between the trends in Western Europe, North America and Japan, and the situation in many parts of the Middle East, Africa and Asia, where demand for high-viscosity monogrades remains strong.
One reason for the disconnect is the older age of vehicle populations in the latter markets, although that is being resolved in the passenger car segment as new vehicle sales gain momentum. Modern crankcase oils are compatible with older vehicles, but they cost more, so most motorists dont use them if they dont need to. A bigger factor is the high sulfur content found in motor fuel in the Middle East and the reluctance of oil companies to invest and upgrade refineries.
Oil companies in other regions have devoted substantial sums to sulfur reduction to meet emission restrictions, and maximum sulfur limits are now 10 to 15 parts per million in 47 countries around the world, according to the International Fuel Quality Center in Houston, Texas, United States. However, many countries are making slow progress on reducing sulfur levels in fuels. In the Middle East, Saudi Arabia has dropped its maximum limit to 500 ppm, but in much of the region sulfur limits still exceed 2,000 ppm.
Kumar told LubesnGreases that high sulfur content has a negative effect on the performance of cars and trucks that are designed to meet Western emissions standards. Automakers have met these requirements through a variety of technologies, some of which use catalysts that may be poisoned by sulfur or phosphorus. Even if they bring the vehicles [into the Middle East], they have to remove the catalyst as it will not work.
Supplying markets that are divided between modern and older engine oils creates logistical challenges for lubricant blenders and marketers since it increases the number of products that they carry. The same applies to lubricant additive companies, which have made significant formulary changes to meet the latest oil standards. SAPS limits have checked the usage of zinc dialkyldithiophosphate, historically a cost-effective antiwear component. Kumar said there have been similar issues with the use of sulfonates and phenates, which have been used as detergents for decades. Additive companies have developed alternative chemistries, but markets such as the Middle East continue to demand conventional packages.
What will it take for the Middle East to more fully accept engine oils that were made for new cars? It probably will not happen until Middle Eastern governments implement fuel standards similar to those in North America and Europe. That appears doubtful in the short term, one industry source contended. Fuel is heavily subsidized in the Gulf States, and in the wake of the recent Arab Spring there is unlikely to be any quick move to eliminate pricing caps – a requisite step to free up capital necessary to produce low-sulfur fuels with an acceptable return on investment.
Kumar pointed out that sulfur reduction is a matter of concern to everybody. Ultimately emerging markets will be forced toward qualitative improvements in fuels, and improvements in lubricants will follow. But Middle East customers will not benefit from technological advances in engine hardware and engine oils if sulfur levels in fuel are not reduced.
These market dynamics are posing a challenge to lubricant companies in the Middle East, as they are increasingly required to market products for use in American, European, Japanese and Korean vehicles and that comply with API, ACEA, JASO and OEM specifications. The question remains whether there will be sufficient impetus to convince consumers and governments of the benefits of investing in low-sulfur fuel production.