How is the major additive suppliers’ exit from Russia likely to affect the country’s lubricant market? 

While the answer is multidimensional, perhaps the most obvious effect is that the absence of these companies’ presence in the country will likely result in a general lack of lubricant blending capabilities. That is, Russian lubricant producers may find themselves unable to manufacture engine oils that are suitable for use in newer model European cars, Kandelaki and the anonymous consultant predicted. 

How might this force the Russian market to adapt? 

Simply stated, Russian blenders may be required to downgrade to such older technology as the now obsolete Gost standard. There is also the option to pivot toward Chinese technology, which would allow Russian lubricant makers to produce oil formulations that are suitable for use in Chinese models as well as some of those manufactured by companies in Korea, Japan and the United States. 

Good and Sanctioned

Western entities, such as the European Union and the United States, imposed economic sanctions against Russia after its invasion of Ukraine. Among other things, the sanctions forbid transactions with Russian state-owned banks and oil companies. Business with privately-owned Russian companies is still permitted, but many companies have chosen to shun the already isolated market altogether. These decisions have been made as a form of protest as well as because of problems with payments and logistics.

“We fully support the sanctions against Russia imposed by the United States and the European Union…due to the political situation in Ukraine,” an Evonik spokesperson told Lubes’n’Greases.

She added that the Essen, Germany-based company “completely complies with the EU Council Regulation (EU) 2022/576 concerning restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine.” She also confirmed that Evonik stopped its supply of lubricant additives to the country. 

A Chevron Oronite spokesperson said that the company continues to monitor developments around Russia and Ukraine and that it halted any transactions with the country.

“As always, we comply with all current applicable laws and regulations. Our commercial exposure for sales of lubricants and chemicals destined for Russia and with Russian entities has historically been limited. Due to the current situation, Chevron has stopped all transactions,” the spokesperson said.

Short on Additive Packages

Lubrizol, Oronite and Afton are headquartered in the United States. Infineum—which is a joint venture between ExxonMobil and Shell—is based in the United Kingdom. Together the companies supply a vast majority of additive packages around the world—especially packages for automotive engine oils.

Germany-based Evonik produces certain lubricant additive components but not additive packages.

Additive packages consist of all the individual chemical additives or components that go into a lubricant, combined with enough base oil diluent for them to dissolve in. Additive package suppliers usually conduct extensive research to develop formulations that meet finished lubricant performance specifications. Additive companies also pay for testing at independent laboratories to document performance. Consequently, they supply not only the ingredients that are blended with base oils to make finished lubricants but formulary knowledge for the finished lubricants. They also provide the documentation that lubricant companies need to prove that their products meet performance standards.

The consultant who spoke on condition of anonymity said Russian lubricant manufacturers are turning to additive package suppliers in other countries—such as India, the United Arab Emirates and China—to replace the products that they were previously buying from Lubrizol, Infineum, Afton and Chevron Oronite. There are a number of such suppliers around the world, but most lack the technology to meet the latest engine oil specifications.

For instance, Richful Lube Additive Co., sells additive components and some packages—including packages that meet API SP, API SN and API SM, the three latest passenger car engine oil specs adopted by the American Petroleum Institute for the North American car market. But Richful—which is headquartered in Xinxiang, China—does not offer packages meeting recent specifications developed by many European original equipment manufacturers or the European Automobile Manufacturers Association. 

Among the other potential replacement suppliers mentioned by the anonymous consultant is the United Arab Emirates-based Kemipex. The company’s website does not specify that it offers products meeting recent ACEA or API specifications.

Kemipex and Richuful did not respond by deadline to inquiries by Lubes’n’Greases.

As a result, the anonymous consultant said, engine oils formulated with Chinese additives would likely not qualify to claim compliance with recent specifications issued by such European OEMs as Mercedes-Benz, Renault or Volkswagen.

However, “Russian oils formulated with Chinese additives can be used only for servicing the Korean, Japanese and Chinese makes that recommend API-specified lubricants,” he said. 

Russian motorists are well aware that German, Italian or French cars up to several years old risk engine damage if operated without oils meeting the latest ACEA or OEM specifications. These specifications stipulate certain properties, such as viscosity and chemical composition. They must also pass engine tests for parameters including wear protection, resistance to oxidation and contribution to emissions control.

Challenges Beget Opportunities?

Despite these challenges, the Russian market is adapting to these extraordinary conditions. 

Smaller foreign lubricant companies have opted to continue shipments to Russia. Furthermore, Russian motorists are eager to use these products because they purportedly have approvals from some European OEMs. 

Additionally, domestic car makers are planning to revive long-forgotten makes, such as Moskvich. There also may be plans to modernize Volga luxury sedans, which contain motors that can run on oils formulated to meet the obsolete Gost specification.

Gost is an abbreviation of the Russian words for state union standard. It is a collection of 20,000 technical specifications first developed during the Soviet era that lay out the parameters for almost any product manufactured in the ex-communist state, including lubricants.

After the end of the USSR, Gost persisted as a regional standard system in some countries, including Belarus, Kazakhstan, Armenia or Azerbaijan—part of the Commonwealth of Independent States, known as CIS.

Some of these smaller foreign lube blenders that have chosen to continue shipping products to Russia are Berlin, Germany-based Bizol and Turkey-based Belgin Oil. According to a Russian automotive news outlet, these companies’ products have some approvals for “technically complex BMW motors.” Because of this, their synthetic products can also be used in other German equipment, like VW, Audi, Mercedes or Porsche.

Neither Bizol nor Belgin responded by deadline to inquiries by Lubes’n’Greases.

“Despite the exit of the big oil majors, some sale points still offer western engine oils,” news outlet Avtozglyad reported. “We should be aware that many of these are fake. This could be a very lucrative business because the price of Russian oils packed in canisters emblazoned with American or European brands is increasing by six- to seven-fold. That’s why there is a greater chance for swindlers to fake Shell or Mobil products than Bizol’s or Belgin’s” products. 

Kandelaki said the situation certainly challenges Russian lubricant manufacturers and the country’s auto industry. However, she also believes that they have the ability to rise to the occasion.

The Russian lubricant market is “in short, not comfortable but not critical,” she said. “We have the components; we have the capacities. And this is a chance for the domestic additive makers. A window of opportunity” is opening.

Which companies can step in to fill Russia’s lubricant additive needs?

There are actually a few lubricant additive suppliers in Russia and Belarus that Russian lubricant marketers could tap. The most prominent of these is NPP Qualitet, which does offer engine oil packages as well as additive components. According to the Moscow-based company’s website, however, its current packages meet only older API specifications and fall short of ACEA standards completely. 

Another important lubricant additive supplier in the region is LLK-Naftan, a joint venture between LLK International—the largest lubricant marketer in Russia—and the Belarus’ Naftan. Before the war in Ukraine began, LLK-Naftan was described as the main lubricant additive producer in Russia. However, now the company’s website is not operational, and it remains unclear if the joint venture has maintained its pre-war status.  

Boris Kamchev is a staff writer with Lubes’n’Greases. Contact him at Boris@LubesnGreases.com