Base Oil Market Share, Size, Trends, Industry Analysis Report, By Grade (Group I, Group II, Group III, Group IV, Other Types), By Application, By Region, Segments & Forecast, 2024 – 2032
- Published Date:Jan-2024
- Pages: 118
- Format: PDF
- Report ID: PM3094
- Base Year: 2023
- Historical Data: 2019-2022
Report Outlook
The global base oil market was valued at USD 20.92 Billion in 2023 and is expected to grow at a CAGR of 4.70% in the forecast period. The base oil market is primarily driven by the increasing demand for high-quality lubricants, especially from end-use industries, including automotive, metallurgy, heavy equipment, chemicals, and power generation. Another key driver is the growing demand for synthetic and bio-based lubricants, which are expected to replace mineral-based lubricants in the coming years.
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Base oil is a vital component in the lubricant industry, which is used to produce various types of lubricants, such as engine oil, hydraulic oil, and gear oil. The market is primarily driven by the increasing demand for high-quality lubricants, especially from the automotive industry. In recent years, the market has undergone significant changes, with new technologies and innovative products being introduced to meet the growing demand for high-performance lubricants.
The market is experiencing several trends expected to shape its growth. One of the key trends is the shift towards synthetic and bio-based lubricants. Synthetic and bio-based lubricants are gaining popularity due to their superior performance, environmental friendliness, and regulatory compliance. Another trend is the increasing use of recycled base oils. Recycled base oils are cost-effective and reduce the environmental impact of lubricant production.
The covid-19 pandemic has negatively impacted the short-term growth of base oils. It disrupted the supply chain, reduced demand for lubricants, and caused significant fluctuations in crude oil prices, affecting the market for a certain period. However, the demand for the industry has recovered gradually as the global economy recovers from the COVID-19 pandemic. As economies reopened and economic activity resumed, the need for lubricants and base oils has increased. For instance, as per the International Organization of Motor Vehicle Manufacturers (OICA), global automobile manufacturing has increased by 3% from 2020 to 2021.
However, there are certain factors, responsible for limiting the growth of base oils in the forecast period. Factors such as volatility in crude oil prices, environmental regulations, competition from alternative products, technological advancements, fluctuating demand for lubricants, and other geopolitical factors. Base oil is produced from crude oil, and the price of crude oil significantly impacts the price of base oil. The volatility of crude oil prices can make it challenging for base oil manufacturers to predict their costs and pricing strategies. The higher cost of crude oil can make base oils more expensive, reducing the demand for base oil.
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Industry Dynamics
Growth Drivers
The increasing demand for high-quality lubricants in the automotive industry primarily drives the base oil market. The automotive industry is growing rapidly, particularly in developing economies such as India, China, and Brazil. The automobile sector is a significant consumer of lubricants primarily made from base oils. The automobile sector's use of base oils also presents opportunities for base oil manufacturers to innovate and develop new products. For example, synthetic base oils are gaining popularity in the automobile sector due to their superior performance and ability to meet increasingly stringent fuel economy standards. This growth is driving the demand for high-performance lubricants, which, in turn, is driving the need for base oils.
Another driver is the rising demand for synthetic and bio-based lubricants, which are expected to replace mineral-based lubricants in the coming years. Synthetic and bio-based lubricants offer superior performance, reduced environmental impact, and regulatory compliance. These types of lubricants provide a range of benefits over conventional mineral-based lubricants, driving the demand for base oils specifically formulated for these types of lubricants. The need is also driving innovation in the market, with manufacturers investing in research and development to develop new base oils that meet the specific requirements of synthetic and bio-based lubricants.
Report Segmentation
The market is primarily segmented based on grade, application, and region
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By Grade |
By Application |
By Region |
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The Group II segment witnessed a significant CAGR in 2022
The major factors supporting the segment owing its variety of applications in trunk piston engine oils and marine and gas engine applications. Group II base oils are more refined than Group I base oils and have better performance characteristics, such as a higher viscosity index and better oxidative stability. They are commonly used in automotive engine oils, gear oils, and hydraulic fluids.
The Automobile oil segment is anticipated to dominate the market in the forecast period
Automotive oils are one of the major application segments in the base oil sector. They are used in various automotive lubricants, such as engine oils, transmission fluids, and gear oils, to provide lubrication, reduce wear and tear, and extend the lifespan of automotive components. The automotive oils application segment is a key driver of the market, with increasing demand for high-quality lubricants that provide better fuel efficiency, longer equipment life, and reduced emissions. In addition, the increasing number of middle-income group families across the Asian Pacific countries has surged the demand for various automobile vehicles in the last few years, increasing the demand for base oil.
For instance, as per OICA data, the total production of automotive vehicles in 2021 accounts for 80,145,988 units globally, an increase of around 3% compared to total automotive production in 2020.
Asia Pacific region is dominating the market in terms of revenue share for 2022
The Asia Pacific region is a significant player in the global market, accounting for a large market demand and production share. The region's growing industrialization and increasing demand for transportation fuels and lubricants are driving the growth in the Asia Pacific region.
For instance, as per International Trade Organization, China remained the largest vehicle market in annual sales and manufacturing output, with the country's automotive industry being a major driver of base oil demand. The country's rapid economic growth, expanding population, and increasing urbanization have led to a surge in demand for personal vehicles, boosting the demand for automotive lubricants and base oil.
India is another major consumer of base oil in the Asia Pacific region, driven by the country's growing automotive industry and increasing demand for industrial lubricants. According to Society of Indian Automobile Manufacturers, India produced about 22,933,230 vehicles in 2022. Other countries in the area, such as Japan, South Korea, and Indonesia, also contribute to the growth. The region is also home to several major base oil manufacturers, such as SK Lubricants, Neste Oyj, and Petronas Lubricants International.
Competitive Insight
Some of the prominent key players operating in the Marketspace includes PetroCanada Lubricants Inc., CNOOC Limited, PETRONAS Lubricants International, ExxonMobil Corporation, Abu Dhabi National Oil Com Saudi Arabian Oil Co.pany, Shell plc, Chevron Corporation, Indian Oil Corporation Ltd., SK Lubricants Co., Ltd., GS Caltex Corporation, Bharat Petroleum Corporation Limited, Sepahan Oil, Ergon, Inc., Sinopec Corp., Royal Dutch Shell Plc., PT Pertmina, Sepahan Oil, Evonik Industries AG, and Chevron Corporation.
Recent Developments
- March 2023: ExxonMobil Corporation has expanded its fuel supply, by setting up the Beaumont refinery expansion project, that increased the capacity to 250,000 barrels per day. The strategic move has supported the company’s growing crude production in Permian Basin.
- January 2021: Pennzoil-Quaker State Company dba SOPUS products and CSW Industrials, Inc., a wholly-owned subsidiary of Shell Plc., has announced a partnership agreement with Whitemore Manufacturing LLC. The partnership has formed a joint venture to provide greases, lubricants, and coolants to the U.S. mining sectors and North America rail.
Base Oil Market Report Scope
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Report Attributes |
Details |
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Market size value in 2024 |
USD 21.65 Billion |
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Revenue forecast in 2032 |
USD 31.43 Billion |
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CAGR |
4.70% from 2024 - 2032 |
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Base year |
2023 |
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Historical data |
2019 - 2022 |
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Forecast period |
2024 - 2032 |
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Quantitative units |
Revenue in USD Billion and CAGR from 2024 to 2032 |
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Segments covered |
By Grade, By Application, By Region |
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Regional scope |
North America, Europe, Asia Pacific, Latin America, Middle East & Africa |
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Key companies |
PetroCanada Lubricants Inc., CNOOC Limited, PETRONAS Lubricants International, ExxonMobil Corporation, Abu Dhabi National Oil Com Saudi Arabian Oil Co.pany, Shell plc, Chevron Corporation, Indian Oil Corporation Ltd., SK Lubricants Co., Ltd., GS Caltex Corporation, Bharat Petroleum Corporation Limited, Sepahan Oil, Ergon, Inc., Sinopec Corp., Royal Dutch Shell Plc., PT Pertmina, Sepahan Oil, Evonik Industries AG, and Chevron Corporation. |
FAQ's
The base oil market report covering key segments are grade, application, and region.
Base Oil Market Size Worth $31.43 Billion By 2032.
The global base oil market expected to grow at a CAGR of 4.63% in the forecast period.
Asia Pacific is leading the global market.
Key driving factors in base oil market are increasing demand for high-quality lubricants in the automotive industry and rising demand for synthetic and bio-based lubricants.
