Domestic Production of Lubricating Oil

Domestic Production of Lubricating OilDomestic Production of Lubricating Oil

Iran has started production of a type of lubricating oil, which so far was solely produced by an American company, Mehr news agency reported.

The lubricating oil, which has numerous usages in power plants, petrochemical complexes and refineries, was imported from the United States through mediators in the past. However, tightening of sanctions in 2012 prevented import of the product from its sole producer in the US. Thus, Iran had been compelled to import from China a similar product at a much lower quality.   

An Iranian company ultimately produced the oils to end  reliance on foreign producers. Commercial production has commenced with a new Iranian formula whereby domestic crude oil products were used as main feedstock for refining and producing the lubricating oil.

Indigenized production formula and reduced production costs in comparison with the foreign product are among the advantages of domestic production. Production capacity currently stands at more than 20 million liters. Once the needs of domestic refineries and petrochemical complexes are fully met, the product can be exported abroad.  The lubricating oil is produced at cost of $10-15 per liter in Iran, while the US producer supplies it to global markets at $45-50 per liter.

The US and its allies imposed tough sanctions on Iran to curb the country’s nuclear program which they claim is geared to military use. Iran insists its program is peaceful. Imposition of trade and financial sanctions has severely impeded Iran’s ability to import a multitude of products as well as technologies in particular in the energy sector.