“The region was significantly affected by the Russia-Ukraine conflict that led to supply chain disruptions and increases in commodity prices,” Dutta noted. “As a result, industrial activity went down, fuel prices went up, inflation went up, people started economizing – traveling a little less and spending less on vehicle maintenance.”

In the Middle East, she noted that Egypt will continue to grow, as a developing region and developing country. “Its vehicle parc is growing, industrialization is happening, urbanization is happening,” Dutta said. “Overall, it will have decent growth the next five years.”

She noted that the U.A.E. is an important lubricants market for the Middle East, especially as an import and trading hub and as a major consumer of marine lubricants. “We expect continued growth for this country,” she said. “The country is focusing on diversification of its economy, which will bring in investments in the form of infrastructure development and in the form of industrial development manufacturing. All these developments will lead to increased demand for lubricants for the U.A.E.”

Kline estimated global finished automotive and industrial lubricants demand declined 2% to 39 million metric tons in 2022, compared to 40 million tons in 2021, just shy of the pre-pandemic 41 million tons demand in 2019.

COVID-19 impacted the global lubricants market, causing demand to decline in 2019. It rebounded to 40 million tons in 2021, but demand did not reach the pre-pandemic level in 2022. “This happened because in many markets we saw the demand went down in year 2022, especially in Europe and In China, for different reasons,” she said. “Looking forward, the outlook is positive.”

Out to 2027 – consumer and commercial vehicle lubricant demand in Europe are forecast to decline slightly at around a 0.75% compound annual decline rate, with industrial showing the least decline, around a 0.25% compound annual decline rate.

Germany’s lubricant demand is expected to be flat to 2027. A 1.5% compound annual decline rate in commercial vehicle lubricants demand is projected.

In France, the forecast calls for a small CAGR to 2027 of less than 0.25%. A more than 1.25% compound annual decline rate for consumer vehicle lubricant demand is expected to hinder the growth rate, despite a 1% CAGR for commercial vehicle lubricant demand.

In the United Kingdom, a 0.5% total lubricant demand CAGR is projected. The category expected to show the most growth is commercial vehicle lubricant demand, at more than 1.25% CAGR.

Kline forecasts Spain’s lubricant demand to grow by 1% CAGR to 2027. CAGRs of slightly more than 1% are projected for both commercial vehicle and industrial lubricants demand.

Poland’s total lubricant demand is projected to grow by just under 1% CAGR to 2027, with the CAGRs for consumer vehicle, commercial vehicle and industrial all around 1%.

Kline forecasts that lubricants demand in the Africa and Middle East region will grow at a compound annual rate of 1.4% by 2027, while the CAGR between 2027 and 2032 is expected to be less than 1%.

Out to 2027, Saudi Arabia and the United Arab Emirates are each forecast to post CAGRs for lubricants demand of more than 2%. In Egypt, industrial is expected to lead, with a CAGR close to 3%, while in the U.A.E., commercial vehicle lubricants demand is expected to lead with a 2.5% CAGR. A CAGR of more than 1.5 is projected for Saudi Arabia, with industrial lube demand leading at more than 2%.

In the Africa and Middle East Region, Nigeria is the largest market in terms of demand volume, she said, though the country’s growth post-pandemic as a developing nation has been hindered by several factors. The country had presidential elections early this year. “Because of this, a lot of investments were put on hold,” she noted. “And as a result, we don’t see significant growth in its lubricant consumption in 2022, compared to 2020. Also, the future we expect muted growth because of the political situation of the country.” She added that the purchasing managers index for Nigeria in the last quarter of 2022 and first quarter of this year showed recessionary trends. “So our expectation is growth will continue to be muted,” she said.

In South Africa, Kline projects its lubricant demand will have a CAGR less than 1.5% to 2027. “This is because its automotive parc is not really growing, and the increased usage of longer drain intervals and higher quality products,” she said. “Also, political instability, high inflation, as well as power cuts does not really help its industrial sector to grow significantly.” Industrial lube demand is expected to have the highest CAGR, at more than 1.5%. Kline estimated that the top five lubricant suppliers in 2022 were Shell, ExxonMobil, BP, TotalEnergies and Chevron. The rest of the top 10 included Sinopec, PetroChina, Fuchs, Idemitsu Kosan and Valvoline.