The Middle East region is one of the most important to the global lubricants and fluids industry. As of 2022, the region can be said to have fully recovered from the Coronavirus pandemic from an economic perspective. Several key indicators such as government spending, gross domestic investment, consumer spending and gross domestic product have all reached levels above those last seen in 2019.

This indicates a sharp recovery, and we can anticipate that lubricant demand will rise significantly along with these figures. It’s a region that is evolving rapidly, so lubricant marketers throughout the region should prepare themselves to capitalize on such an opportunity.

Lubrizol recently had the chance to dissect some of the factors at play impacting the additive industry as a whole and its implications on the Middle East region at the 17^th ICIS Middle Eastern Base Oils and Lubricants Conference in Saudi Arabia.

Here are the trends that are making an impact:

Legislation

Environmental concerns are driving governments into implementing new legislative measures across the world. New pollutants are being monitored and tighter limits set along with in-use monitoring.

Vehicle manufacturers are constantly evolving their hardware and propulsion strategies to meet these stringent limits whilst maintaining their focus on improving efficiency and durability.

Lubricants continue to play the key role of enabler in ensuring the industry moves forward while meeting Environmental Social and Governance (ESG) requirements.  A number of factors need to be considered whilst designing additives for such high-performance lubricants.

Some of these include a fresh look at new antiwear, friction modifier and other additive technologies, along with high quality base stocks. Advanced detergents and inhibitors against corrosion need to be considered as hybrid vehicles continue to proliferate. Mid-to-low ash content is required for aftertreatment device filter compatibility, with both ash level and composition being important to minimize blocking. And finally, mitigating Low Speed Pre-Ignition (LSPI) must be looked at as the number of gasoline direct injection engines increases throughout the world.

Market Upgrade

In parallel to these, many governments have implemented legislation specifying the use of a minimum quality level of lubricants in their countries. To give an example from the Middle East region, since 2018, the Saudi Arabian Standards Organization (SASO) mandated that heavy-duty diesel engine oil must meet the minimum performance standards of the API CH-4 performance category from the American Petroleum Institute (API). Such legislation not only has a positive impact on the environment and protecting end user investments, but also aligns well with the investment of the additive industry in upgrading chemistry componentry for future generation lubricants. 

Sustainability 

Sustainability has become a key requirement from customers and, with the growing importance of this subject, will drive the market towards lubricants that maximize the positive impact on emissions in use, while minimizing the negative impact from sourcing, manufacturing, distribution and disposal. From the additive industry perspective, life cycle analysis, by a consistent set of rules an boundaries, is a critical tool to measure the sustainability of lubricants.

Navigating the Complexities and Challenges

In addition to the market drivers explained earlier, there are several other factors. The implications of regulatory limitations on using certain components must be balanced with the need to be backwards compatible.

The proliferation of specifications in conjunction with the rising cost of testing influence investment priorities.

Impact on the Middle East

The Middle East region holds a key role in the overall industry dynamics both as a user and as an important stakeholder in the base oil industry.

As a user, being a net importer of vehicles with majority of the vehicular fleet having its origins in  Europe, US and Japan, the modern hardware technology inherently applies to the region.

Vehicle manufacturers across these regions are increasingly specifying the use of ultra-low viscosity fluids in these modern vehicles to achieve fuel economy gains. Such formulations are governed by strict guidelines. Formulating these lower viscosity, higher-performance lubricants does require adherence to licensable formulation shapes. Often Group III or Group III+ base oils are needed, in addition to higher performance additives and performance polymers to ensure end users’ investments are protected and the owner is able to reap the full benefits of the modern vehicle. 

Fortunately, significant volumes of Group III base oils are now being produced within the Middle East, which will be a critical enabler of the next generation of lubricants.

As an important stakeholder in the base oil industry, investments towards upgradation and managing the right partnerships will be vital as the industry moves forward with the accelerated pace of innovation to a more sustainable future.

Our View

Future emissions legislation will continue to drive more energy-efficient engines and emissions-reducing aftertreatment devices in vehicles, which will depend on advanced lubrication technology for optimal performance. Our industry has proven itself up to the challenge, evidenced by the solutions that have improved environmental outcomes, engine protection and aftertreatment compatibility. We’ve delivered low-viscosity formulations without compromising on protection.

Into the future, high-quality base oils along with new additive technology will play an important role in enabling more sustainable performance in modern Internal Combustion Engine (ICE) powered vehicles, throughout the Middle East and around the world. There will be challenges ahead, but opportunities remain bright for our industry to continue delivering value throughout the marketplace.