South Korea's motor lubricant exports to Russia rise after oil majors pull out

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South Korean exports to Russia of engine lubricants that can be used in tanks, armored vehicles and other military vehicles more than doubled last year, as Korean companies took advantage of the market retreat of their Western competitors following the US invasion of Ukraine. Vladimir Putin. South Korea's motor lubricant exports to Russia rose 116.7% in 2022 to $229 million, according to Korean government statistics. The increase came after Western oil majors including Total, Shell and BP voluntarily reduced their Russian operations, including sales of lubricating oils used in vehicle transmissions and engines, after the start of the war. Russian import data shows that SK Enmove, a subsidiary of South Korean conglomerate SK Group, and GS Caltex, a joint venture between South Korea's GS Group and US energy giant Chevron, were the two main Korean beneficiaries of the exports. Western companies.

Companies denied that their products were being used by the Russian military and claimed strong compliance standards among their local partners. There are no South Korean restrictions on exports of lubricants or motor Job Function Email Database oils to Russia. Neither company has been accused of violating the sanctions. Experts said it was nearly impossible to verify that engine lubricants, which can be used for civilian or combat vehicles, were not leaking for military uses. “Any POL [petrol, oil and lubricant] product can have dual use: civilian or military,” said Patrick Donahoe, retired U.S. major general and former commander of the U.S. Army Maneuver Center of Excellence. “Anyone who sells POL to Russia is aiding their aggression in Ukraine.” Russian import records examined by the Financial Times show that SK Enmove and GS Caltex shipped around $2.8 million worth of motor oil to Russia in January 2022, before the full-scale invasion of Ukraine. Since then, its volumes have skyrocketed, reaching a peak of about $28 million in March.



Data shows SK Enmove now accounts for 6.5 percent of Russian motor oil lubricant imports, with GS Caltex supplying just over 5 percent. “Korean companies can enter market niches in Russia left by larger international companies,” said Jeong Min-hyeon, head of the Russia and Eurasia team at the Korea International Economic Policy Institute. “But realistically, I don't think Korean companies can control who the end users of their exports to Russia may be.” GS Caltex, which makes the Kixx brand of motor oils, and SK Enmove acknowledged they had benefited from their competitors' withdrawal from the Russian market, but insisted they took precautions to ensure their products were not diverted for military use. GS Caltex said there was “no possibility” that its products could be diverted for military use in Russia, adding that its “contract with a private Russian company contains clear rules on the resale of our products.