Speaking here at the ICIS Middle Eastern Base Oils & Lubricants Conference, GfK Middle East & Africa Senior Business Group Manager for Automotive Prachi Satoskar cited the United States as an example of suboptimal treatment of waste lubricants. Only 10 percent of used oil generated in the U.S. is rerefined, she said, and the federal governments Environmental Protection Agency estimates that as much as 680 metric tons per year is illegally dumped.

In any market, the environmental consequences of improper used oil disposal are potentially devastating. Left untreated, used oil can seep into the ground, contaminating soil and posing an acute long-term risk to health from skin or eye contact. The Middle Easts looming water shortage could be exacerbated as rainwater may carry toxins into sewers and streams before traveling into drinking water supplies, concludes GfK, a German market research firm.

Anything that reduces waste oil volumes thereby reduces the threat, Satoskar said, and in the Middle East that is likely to happen as larger automotive markets shift to semi- and fully synthetic engine oils, specifically the United Arab Emirates and Saudi Arabia. Semi-synthetic 10W-40 grades and synthetic 5W-30 and -40 synthetics are gaining momentum, although their penetration in some markets remains modest. Heavy-duty diesel engine oil markets are shifting more slowly and unevenly.

Synthetics offer longer drain intervals and better engine protection, and despite being pricier, they are increasingly seen as economically comparable to mineral oils in overall terms. Satoskar said the shift to synthetics is already widespread in the heavily urbanized Asia-Pacific region, led overwhelmingly by China, and GfK is expecting a similar trend in the Middle East.

Last year, business-to-consumer sales of engine lubricants in Saudi Arabia reached 157,000 kiloliters, or 141,000 tons, distributed through approximately 8,000 outlets in 25 cities, according to GfK Insights. But the market is under pressure, and year-to-date sales were down 1 percent through the end of October. In neighboring U.A.E., the picture is even starker. Engine oil sales of 44 million liters sold through 3,500 outlets were down around 8 percent through the end of October. Meanwhile in Egypt sales reached 236,000 liters in the same period, down 5 percent from 2018, but sales volumes are shifting from urban to rural areas, which now account for 30 percent of engine oil sales.

B2C sales do not include other types of oils or purchases by fleet operators or car dealers.

Semi- and fully synthetics remain a fraction of Middle Eastern markets. In the U.A.E., considered by some analysts to be the most sophisticated market in the region, mineral based oils still account for 68 percent of demand, with semi-synthetic and synthetic products accounting for 16 percent each. Satoskar said online aggregators may disrupt retail engine oil sales as they have done in other automotive categories, such as tires. Online sales in other segments have grown from 1 to 2 percent to around 11 percent currently, and that could happen with engine oils, she said.

GfK does not separate passenger car motor oils and heavy-duty diesel engine oils data, but according to Satoskar, the regional shift to synthetics is most apparent with the former products. The HDDEO [segment] is mainly mineral based; drivers are not ready to shift, she said. Monograde heavy-duty oils were banned in Saudi Arabia last year, however Satoskar said small amounts – around 10 percent of the market – are still being sold.

Meanwhile, increasing quantities of counterfeit oils are standing in the way of greater protection of the environment. Despite a regulatory crackdown, fake brands have become a burgeoning black market in Saudi Arabia and the U.A.E. GfK said chemicals are often added to remove impurities found in used oil and re-packaged as well-known brands, complete with a rivet and seal. Overcoming the problem at the retail and consumer level will require educational campaigns to increase awareness, GfK predicts.

Even so, synthetics and electric vehicles alone are not going to eradicate the threat from used oil, but together with support from original equipment manufacturers they might help reduce a regional problem.