In the Middle East, the petrochemical industry has emerged as one of the fastest-growing sectors due to the manufacturing industry’s rapid economic development and growth. Petroleum products provide a useful foundation to the segments of construction, agriculture, pharmaceuticals, textiles, packaging, and others. Lubricants are one of the major petroleum products, and, thereby, it has been regarded as one of the most important sectors of the petrochemical industry.
Middle-Eastern Automotive Engine Oils Market
The Middle East Automotive Engine Oils Market stood at 1.23 billion liters in 2021 and is projected to register a CAGR of 2.95% to reach 1.42 billion liters in 2026.
Figure : Middle-eastern Lubricants Markets 2015-2026
Due to a drop in commercial activity, the COVID-19 outbreak significantly decreased the utilization of the current Middle East vehicle fleet in 2020. As a result, engine oil consumption in the region fell precipitously between 2019 and 2020.
Along with the anticipated rebound in automotive sales and production, an increase in the penetration of electric vehicles is likely to have little influence on engine oil consumption. Considering these, engine oil consumption is predicted to expand at a CAGR of 2.95 percent between 2021 and 2026.
UAE Oil Market overview
Low oil prices during COVID-19 led to a 5.3 percent reduction in the nation’s 2021 budget compared to 2020. Due to low crude prices and limited demand for petroleum products, the country has also reduced its oil production in 2020. However, the market is predicted to rebound this year due to factors such as increased investment in the upstream sector and supporting government policies. Furthermore, in 2018, the nation announced a USD 45 billion megaprojects to enhance refining capacity in existing refineries. By 2025, the project is planned to expand the country’s refining capacity by 65 percent, reaching 1.5 million barrels per day.
Engine Oil to dominate the Middle eastern lubricant market by volume.
Engine oils are commonly used for wear reduction, corrosion prevention, and guaranteeing the smooth running of engine internals. High-mileage engine oils are in high demand due to unique qualities such as oil leak prevention and oil-burn off mitigation. The average vehicle age has steadily increased, creating potential in the aftermarket refill industry. The expanding urban population in emerging nations and the increasing average age of passenger automobiles are predicted to boost the engine oil market.
Technological improvements threaten the engine oil segment’s growth due to higher engine oil replacement intervals. On the other hand, increasing vehicle production rates are predicted to promote segment growth throughout the projection period. However, the growing need to reduce emissions from motor vehicles is expected to significantly increase the usage of synthetic engine oils throughout the projected period.
Global Brake Fluids Market
During the forecast period 2020-2025, the global market for brake fluids is expected to record a CAGR of about 2%, and the major driving factor for the market is growth in the production of electric vehicles. However, the negative impact of the COVID-19 outbreak is slowing down the market growth. The recent initiatives at the government level to promote zero-emission and eco-friendly vehicles and, at the same time, growing consumer awareness results in increased production of electric vehicles. Many global automotive manufacturers, including Tesla, General Motors, Toyota, Ford, and other leading companies, are investing hugely in electric car production. But the Brake Fluid market, despite anticipating moderate growth in the upcoming years, also experienced a slowdown due to the Covid impact.
Global Transmission Fluid Market
In 2020 the Transmission Fluid market was valued at US$ 160 Bn., and it is expected to record a CAGR of 4.5% during the forecast period of 2020-2027. Covid-19 has slowed the economic growth around the globe, and the stoppage of manufacturing facilities due to decreased demand results in supply chain disruption. During the Covid-19 lockdown, the impact of supply chain interruptions, workforce unavailability, limited component availability, and demand reduction also negatively influenced the dynamics of the Transmission Fluid market.
From the above, it can be clearly stated that although the global economy is reviving itself from the pandemic impacts, the lubricants market has to face many challenges to chart the usual growth rate. Hence, addressing the issues and improving the quality can help the lubricants market to sustain its growth rate.