By the end of this year, Takreer, owned by Abu Dhabi National Oil Co., is scheduled to begin making Group II and III base oils at Ruwais, U.A.E. Saudi Arabias Luberef, a joint venture between Saudi Aramco and Jadwa Investments, is also set to start producing Group II base oils.

Does all this new production signal a sea change in the market dynamics of the Middle East and North Africa, despite the fact that the region remains stubbornly a Group I market? At the 11th ICIS Middle Eastern Base Oils and Lubricants Conference in Dubai in October, a panel debated whether the region would adopt a new base oil paradigm and what form the transition might take.

The Middle East has access to all types of base stocks and can choose from Group I, II or III, commented Daniel Iannuzzi of Feedco. He added that issues like emissions and fuel economy, although important, were not as severe in the Middle East as in the United States, Europe and Japan. But the situation is slowly changing, and the Gulf Cooperation Council is beginning to raise the bar for formulations.

Fredrik Nissfolk of Neste added that protecting aftertreatment systems required sulfur-free formulations. For these types of lubricants, Group II and III are the best products in the region.

Luberefs Gerard Heaton said a number of factors are influencing the market, including climate change legislation, demands for improved performance and energy efficiency. And Novvis William Downey added that other factors will also impact the Middle East. This region will be technically oversupplied with Group II and III base stocks, and we have learned from other markets than an oversupply drives the supply push orientation of base oil refiners.

This provides an opportunity for marketers to change the market in favor of higher specification products. A blurred distinction between products from a cost standpoint creates an opportunity for marketers, said Downey.

Samir Nawar of Petromin agreed that supply push was a factor in the region. From what I hear from blenders, the trend to use more Group II will increase in the near future. He noted that the cost differences between Group I and II products are minimal, which will encourage blenders and accelerate use. In my opinion, you will see a big change in the next two years.