Middle East and North Africa Lubricants Market Outlook to

2019 - Driven by Automotive Demand and Infrastructural

Developments

The Middle East and Africa currently consumes an

estimated ~% of the global demand for lubricants. An
important trend observed in this region is that markets
which have been comparatively larger from volume
point of view were less advanced than smaller
consuming markets such as the UAE. Iran and Egypt
were the largest markets in terms of consumption,
which accounted for nearly ~% of the total demand in
Middle East in 2014. Northern Africa is also a small
lubricant consuming market from a volume point of
view, with Egypt being the top most consumers.

In terms of production, the biggest player in the MENA

lubricants market was UAE with a share of ~% followed
by Iran, which contributed ~% to the regions
production of lubricants in 2014. Although UAE had a
relatively small market for lubricants, however the
region has ample number of blending plants that
support the export of lubricants to Africa, Europe and
Asia.

Lubricants production in MENA region has changed from

~ thousand tons in the year 2009 to ~ thousand tons in
the year 2014. Production in various countries
witnessed a negative growth rate during years 2010 as
financial crisis had severely impacted the global
economy as well as during 2012.
A decline in overall lubricants production over the past
five years has also been witnessed. The lubricants
production of MENA region recorded a modest growth
of ~% during the period 2009-2014.

MENA lubricants market is predicted to pace up rapidly in

the forthcoming years. Abundance of base oil and low
cost of production have driven the growth of lubricants
production in the region. Further, rising demand from
international markets has been inducing producers to
expand production capacities. It is forecasted that the
lubricants production will surge from ~ thousand tons
in the year 2015 to gigantic ~ thousand tons by the year
2019 due to expanding refining capacities and upcoming
blending facilities.

Iran lubricants market has been one of the largest markets

in the MENA region. The country produced nearly ~%
of the lubricants production in the overall MENA region
by the end of year 2014. The country produced
approximately ~ thousand tons of lubricants in the year
2009 to declining production of ~ thousand tons in
2014 due to decrease in oil production coupled with
geopolitical issues. Hence, production of lubricants has
witnessed a substantial decline at a CAGR of ~% during
the period 2009-2014. The country consumes a
significant ~% of its lubricants production and exports
the rest.

Despite several difficulties faced by the nations due to

issuance of sanctions, Iran has managed to recover. It is
forecasted that the lubricants production will surge
from ~ thousand tons in the year 2015 to gigantic ~
thousand tons by the year 2019 due to the expanding
refinery capacity of the country and upcoming
petrochemical projects. The exports are anticipated to
be analogous to the production and thereby are
expected to register significant growth at an appreciable
CAGR of ~% during the forecasted period 2015-2019.

Heavy duty motor oils contributed nearly ~% to the

overall consumption of lubricants in Iran in 2014. The
share of PCMOs in the Iran lubricants market has been
noted at ~% in 2014. Thus, the automotive lubricants
market collectively occupied ~% share in consumption
of finished lubricants during 2014. During 2014,
industrial oils contributed a share of ~% in the
consumption of finished lubricants.

Saudi Arabia lubricants market has been amongst the

largest markets for production as well as consumption
in the MENA region. The rapid infrastructure
development in the country coupled with high demand
from the progressing automotive and industrial sector
has been majorly driving the market for lubricants in
Saudi Arabia. Due to a significant domestic demand for
lubricants in the country, Saudi Arabia has been
consuming significantly large proportions of its
production.

The countrys production of lubricants has witnessed a

CAGR of ~% during the period 2009-2014, reaching a
production volume of ~ thousand tons by 2014. Due to
a significant domestic demand for lubricants in the
country, Saudi Arabia has been consuming significantly
large proportions of its production.

Saudi Arabia is likely to leverage its lubricants production

through enhancing refining capacities and upcoming
petrochemical projects. Lubricants production in the
country will reach ~ thousand tons by 2019. It is
assessed that there will be a leap in lubricants
production at a CAGR of ~% during 2015-2019. With
the governments initiatives in developing the
infrastructure and transportation system, the country is
expected to perceive growth in roadways, railways as
well as well as sea ports. A number of infrastructure
projects are also lined up in the near future.

During 2014, Petromin has been the leading player in the

lubricants market and commanded a share of ~%
through lubricants sales. Aljomaih and Shell was the
second largest lubricants producing company and
accounted for ~% of volume sales in Saudi Arabia
lubricants market.

UAE has been the largest lubricants producing country in

the MENA region. Lubricants production in UAE is
contributed significantly by refineries and blending
plants. The total lubricants production in the country
has escalated from ~ thousand tons in 2009 to massive
rise to ~ thousand tons in 2014 at a CAGR of ~%
during this period.

It is observed that the market witnessed a paralyzed

growth in year 2010 due to the global economic crisis,
while it started recovering in year 2011. The domestic
production during the year 2011 had reached
~thousand tons after which it continuously grew at a
moderate pace to reach ~ thousand tons by the end of
year 2014.

The transportation segment contributed highest demand

for lubricants and accounted for nearly ~% of the
overall sales for lubricants in the UAE. The sales for
heavy duty motor oil and passenger motor oil
accounted for ~% and ~% of the total market during the
year 2014. Further, the industrial machinery and
equipment segment reported a ~% demand for
lubricants.
The demand for industrial machinery and equipment
application is powered by increasing investments in
construction, manufacturing and logistics sectors.

Egypt was amongst the largest producers and consumers

of lubricants in the North Africa region during 2014.
Egypt also constitutes one of the largest markets for
lubricants in Africa. During 2014, the country accounted
for about one-fourth of Africas demand for lubricants. It
has been analyzed that Egypt accounted for nearly ~%
of the production of lubricants of MENA region during
2014. The lubricants consumption in the country has
climbed from ~ thousand tons in 2009 to declining ~
thousand tons in the year 2014.

Lubricating oil used in Egypt is of low quality and the

mineral oil based lubricants are very popular. Re-refined
oil is also largely used in the country since it is cheaper
than other varieties of oils. Mineral oil based lubricants
occupied a share of ~% in the sales volume in 2014,
while synthetics contributed only a share of ~% in the
overall sales volume. It has been observed that
manufacturing facilities and old commercial and private
vehicles have been using low quality oils, while only the
new vehicles in the country used synthetic oils as of
2014.

It is estimated that lubricants consumption is likely to

mount at a growth rate of ~% accounting to ~ thousand
tons of consumption in the year 2019. Additionally, the
market of Egypt is still hesitant to adopt the new
technology. A major reason for this is the low income of
the Egyptian people.Vehicles owned by people are
mostly old and poorly maintained and are often
repaired with outdated or second-hand spare parts.
Thus, the Egyptian lubricant market will continue to be
inclined towards traditional lubricants and will be one of
the last counties in the MENA region to shift to
premium high quality products.

Algeria has also been a major consumer of lubricants and

since the country is not self sufficient in production and
has been importing significant quantities of lubricants
for domestic consumption. Due to limited oil
production in the country, the production of lubricants
has declined by ~% during the review period 2009-2014.
On the other hand, increasing vehicular population and
infrastructural activities have enabled the consumption
to enlarge at ~% during 2009-2014.

In 2014, the Algerian lubricants market has been

controlled majorly by NAFTAL which held a market
share of ~% in terms of volume sales of lubricants in the
domestic market. Total Lubrifiants Algeria occupied a
significant share in the Algeria lubricants market and
controlled nearly ~% of the lubricant sales in 2014. The
remaining ~% share in the market was held by a few
global companies including Shell and BP, which imported
products from their global production facilities and
market them in Algeria.

The domestic consumption of Algeria has grown at a

much faster pace than the countrys production,
therefore the country relies heavily on imports.
Consumption is expected to expand at an impressive
rate of ~% during the forecasted period. Algeria is one
of the rapidly growing markets for lubricants in the
MENA region and is anticipated to grow at a very fast
pace in the coming years. With rising purchasing power
of consumers in the country the vehicle population is
expected to enlarge in the coming years

The MENA lubricants market is projected to witness

tremendous growth in the coming years. The
production is anticipated to register a noteworthy
CAGR of ~% during the forecasted period 2015-2019.
Rapid industrial development in the region, tourism
activities and booming automotive sector are the major
factors fuelling the demand for lubricants in MENA
countries. The total lubricants consumption is
forecasted to mount from ~ thousand tons in the year
2015 to ~ thousand tons by the year 2019.

The rapidly increasing vehicle population in the region,

rising disposable incomes of consumers and healthy
GDP growth rates allowing governments to invest in
infrastructural and industrial development projects are
considered important to drive the market in the near
future.
MENA region is a major player in the Group I base oil
segment and is projected to be the one of the last few
markets to shift to lighter grade base oils.

The total lubricants production in MENA region is

forecasted to increase from ~ thousand tons in 2015 to
mighty ~ thousand tons by the year 2019. The leading
country UAE is anticipated to maintain its top most
position with a ~% share in overall production. UAE is
likely to be the leader in MENA lubricants market as its
production will rise from ~ thousand tons in the year
2015 to ~ thousand tons in 2019. Algeria is expected to
perceive the highest growth in its production through
enhancing refinery and blending capacities at an
appreciable CAGR of ~% during the forecasted period
2015-2019.

Iran leads the market in terms of consumption and the

countrys consumption is forecasted to surge from ~
thousand tons in the year 2015 to impressive ~
thousand tons by the year 2019 due to increase in
vehicle sales. Algeria is expected to observe the fastest
growth in the region with a CAGR of ~%. Another
important country that is expected to emerge in terms
of consumption will be Qatar. The rapid infrastructural
development in the country due of upcoming soccer
world cup is expected to generate tremendous demand
for lubricants.

Thank You