Group I in the Middle East?
At the recent ICIS Middle Eastern Base Oils & Lubricants Conference in Dubai, Saudi Arabia-based consultant Sulaiman Bilaus gave a terrific overview of the regions base oil and lubricant markets. With the region now a global hub for API Group III and gas-to-liquids base oil production, and with ample Group II flowing in, he asked, can Group I in the Middle East survive?
Bilaus short answer was a resounding yes. Group I will continue to dominate the region at least through 2020, he said, and the reasons are numerous. Group I plants in the Middle East face a different business environment than the rest of the world, thanks to the regions climate, short drain intervals and absence of strict local environmental regulations. In addition, the regions new, high quality base oil plants are targeting exports to Europe and elsewhere outside the region. Further, feedstocks are readily available, and bright stocks – produced only at Group I plants – are highly valued.
Accordingly, Group I plants in this region will be the last to rationalize, compared to European and North American Group I plants, Bilaus said. And as the European appetite for Group II grows, Group I from Europe will increasingly find its way to the Middle East. But eventually, he concluded, higher specifications will require increased Group II and III consumption in the region.
The ICIS Middle Eastern Base Oils & Lubricants Conference in October and the ICIS African conference last month were chock full of excellent presentations, and Managing Editor Dick Beercheck looks forward to bringing you coverage of those meetings, and much more, in the coming months.
Dick Beercheck, Gloria Steinberg Briskin, Lisa Tocci, Boris Kamchev and all our colleagues join me in wishing you a joyful holiday season.
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