Global Base Oil Market, By Grade (Group I, Group II, Group III, Group IV (PAO), Group V (Excluding Naphthenic), Naphthenic, Re-Refined), Application (Automotive Fluids, Process Oils, Industrial Oils, Metalworking Fluids, Hydraulic Oils, Others) – Industry Trends and Forecast to 2029
Market Analysis and Size
In recent years, the production capacity for Groups II, III, and IV oils has increased significantly across the globe. Moreover, the Group II and III base oils are largely gaining popularity for utilization in lubricant formulations for automatic transmission engines, heavy-duty trucks, and passenger automobiles. Therefore, these characteristics of the base oils are expected to for drive the development of the global base oil market in the anticipated period.
Global Base Oil Market was valued at USD 34.01 billion in 2021 and is expected to reach USD 40.17 billion by 2029, registering a CAGR of 2.10% during the forecast period of 2022-2029. In addition to the market insights such as market value, growth rate, market segments, geographical coverage, market players, and market scenario, the market report curated by the Data Bridge Market Research team also includes in-depth expert analysis, import/export analysis, pricing analysis, production consumption analysis, and climate chain scenario.
Report Scope and Market Segmentation
2022 to 2029
2020 (Customizable to 2014 - 2019)
Revenue in USD Billion, Volumes in Units, Pricing in USD
By Grade (Group I, Group II, Group III, Group IV (PAO), Group V (Excluding Naphthenic), Naphthenic, Re-Refined), Application (Automotive Fluids, Process Oils, Industrial Oils, Metalworking Fluids, Hydraulic Oils, Others)
U.S., Canada, Mexico, Brazil, Argentina, Rest of South America, Germany, France, Italy, U.K., Belgium, Spain, Russia, Turkey, Netherlands, Switzerland, Rest of Europe, Japan, China, India, South Korea, Australia, Singapore, Malaysia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific, U.A.E, Saudi Arabia, Egypt, South Africa, Israel, Rest of Middle East and Africa
Market Players Covered
Chevron Corporation (U.S.), Exxon Mobil Corporation (U.S.), S-OIL CORPORATION (South Korea), Motiva Enterprises LLC (U.S.), SK innovation Co., Ltd. (South Korea), Shell (Netherlands), Neste (Finland), AVISTA OIL Deutschland GmbH (Germany), Nynas AB (Sweden), Repsol (Spain), Ergon, Inc. (U.S.), Calumet Specialty Products Partners, L.P. (U.S.), H&R Group (Germany), Sinopec Corp. (China), PetroChina Company Limited (China), Saudi Aramco (Saudi Arabia), Abu Dhabi National Oil Company (ADNOC) (UAE), PT Pertamina (Persero) (Indonesia), Phillips 66 Company (U.S.), Petroliam Nasional Berhad (PETRONAS) (Malaysia) among others
Base oil is basically a refined petroleum mineral or synthetic material produced to a set of specifications by a refinery, typically lubricant base stock. Base oils are created by extracting and processing high viscosity material from vacuum gasoil or vacuum residence distillation cuttings. This necessitates one-of-a-kind processing through a variety of lubes plant units. The type of base oil used for refining and/or the production method used to produce the base oil can affect the quality of a lubricant. It is critical in terms of lubricant grade because base oils typically account for 70–97% of lubricant formulation.
Base oil Market Dynamics
This section deals with understanding the market drivers, advantages, opportunities, restraints and challenges. All of this is discussed in detail as below:
- Increased Utilisation Across Automotive Sector
Furthermore, the growing demand for high grade oils across the automotive industry is expected to fuel the growth of the base oil market. The demand for motor oils and lubricating greases that are compatible with fast-moving parts and high temperatures is being driven by advances in engine technology. Furthermore, engine oils that retain viscosity, reduce engine wear, and help ensure dependability are made with high-quality base oil and best-in-class additive technology. Therefore, the growing utilization of the base oils across the automotive industry is estimated to carve a way for the growth of the market.
The increasing adoption of group ll and group lll base oils coupled with the rapid industrialization across the globe will further propel the growth rate of base oil market. Additionally, the rising applications from developing economies and emerging markets will also drive market value growth. The base oils in Groups II and III are suitable for use in lubricant formulations for automatic transmission engines, heavy-duty trucks, and passenger automobiles, and various properties of Group II and III base oils are projected to bolster the growth of the market.
- Investments and Adoption of Technologies
Furthermore, the soaring investments by the various companies for the growth of the industrial sector as well as the surging levels of investment and high-scale transformation in the automotive industry extends profitable opportunities to the market players in the forecast period of 2022 to 2029. Additionally, the rising preferences towards bio-based oil from vegetable sources and adoption of gas to liquid technology will further expand the future growth of the base oil market.
- Fluctuations in Crude Oil Price
The majority of base oil types are mineral oil-based and are derived from oil prices. Because of the prevalence of COVID-19, the global economy crashed, as did the oil and gas industry. As a result, crude oil prices have reached new lows. Price volatility affects manufacturing companies' margins because base oil prices are heavily influenced by crude oil prices. Manufacturers benefit from higher crude oil prices, but the price change has a negative impact on the base oil market.
- Lower Demand For Group I Base Oils
There has been decline in demand for the Group I base oils owing to the high production of other groups such as Groups II, III, IV and V oils. Therefore, the declining demand for group I is projected to challenge the base oil market growth rate.
This base oil market report provides details of new recent developments, trade regulations, import-export analysis, production analysis, value chain optimization, market share, impact of domestic and localized market players, analyses opportunities in terms of emerging revenue pockets, changes in market regulations, strategic market growth analysis, market size, category market growths, application niches and dominance, product approvals, product launches, geographic expansions, technological innovations in the market. To gain more info on the base oil market contact Data Bridge Market Research for an Analyst Brief, our team will help you take an informed market decision to achieve market growth.
COVID-19 Impact on Base Oil Market
The recent outbreak of coronavirus had a negative impact on the base oil market. The pandemic has harmed the base oil market by reducing consumption and oversupply of refined petroleum products, as well as slowing economic development due to various global lockdown measures. Furthermore, the COVID-19 pandemic has halted more than 80% of North American automobile production. A similar situation exists in Europe and Asia Pacific. The demand for cars and commercial vehicles witnessed a decline, thus hampering the overall market growth. Also, the industrial sector has changed dramatically since December 2019 as a result of the COVID-19 pandemic, which has caused extreme economic uncertainty. Early signs of global economic fallout are visible in countries severely affected by the contagion. During the pandemic, industrial production, retail sales, and investment all fell dramatically, reducing demand for industrial oil. Additionally, the supply chain disruptions, logistics slowdowns, workforce unavailability, and reduced demand have slowed global industrial activity and impacted many industries, including all end-use industries of metalworking fluids. These determinants will weigh on the market's revenue trajectory over the forecast period.
On the brighter side, the market is witnessing a boost in growth due to decline in COVID cases. The market is projected to continue growing at the same pace as the pre-pandemic levels. The suspended and cancelled operations will continue and as a result the market is estimated to expand and as a result, the market will flourish over forecast period.
- In August 2020, Chevron Products Company, a subsidiary of Novvi LLC and Chevron U.S.A. Inc., announced the production of the first 100 percent renewable base oil from Novvi's Deer Park, Houston facility using ISODEWAXING technology. The novel manufacturing process and molecules are expected to outperform conventional and synthetic base oils while also being made from renewable feedstocks.
- In July 2020, SWEPI LP, a Royal Dutch Shell subsidiary, has completed the sale of its Appalachia shale gas position to Seneca Resources Company, LLC and NFG Midstream Covington, LLC, both subsidiaries of National Fuel Gas Company, for USD 541 million to invest as an asset for quality base oil production.
Global Base Oil Market Scope
The base oil market is segmented on the basis of grade and application. The growth amongst these segments will help you analyze meagre growth segments in the industries and provide the users with a valuable market overview and market insights to help them make strategic decisions for identifying core market applications.
- Group I
- SN 150
- BS 150
- SN 250
- SN 500
- Group II
- N 150
- N 500
- N 600
- Group III
- [2 cSt
- 4 cSt
- 6 cSt
- 8 cSt
- Group IV (PAO)
- Group V (Excluding Naphthenic)
- 35–60 SUS
- 80–130 SUS
- 200–300 SUS
- 400–800 SUS
- Above 1,200 SUS
- Automotive Fluids
- Gear Oils
- Transmission Fluids
- Power Steering Fluids
- Brake Fluids
- Process Oils
- Rubber Process Oils
- Textile Process Oils
- Industrial Oils
- Transformer Oils
- Turbine Oils
- Food Grade Oils
- Metalworking Fluids
- Neat Oils
- Hydraulic Oils
Base Oil Market Regional Analysis/Insights
The base oil market is analyzed and market size insights and trends are provided by country, grade and application as referenced above.
The countries covered in the base oil market report are U.S., Canada and Mexico in North America, Germany, France, U.K., Netherlands, Switzerland, Belgium, Russia, Italy, Spain, Turkey, Rest of Europe in Europe, China, Japan, India, South Korea, Singapore, Malaysia, Australia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific (APAC) in the Asia-Pacific (APAC), Saudi Arabia, U.A.E, Israel, Egypt, South Africa, Rest of Middle East and Africa (MEA) as a part of Middle East and Africa (MEA), Brazil, Argentina and Rest of South America as part of South America.
North America dominates the market in terms of market share and market revenue and will continue to flourish its dominance during the forecast period of 2022-2029. The market growth over this region is attributed to the prevalence of favorable regulations to enhance fuel efficiency along with rising adoption of product in industrial and automotive manufacturing sector within the region.
Europe on the other hand, is estimated to show lucrative growth over the forecast period of 2022-2029, due to the adoption of advanced processing technology along with growing number of research and development activities within the region.
The country section of the report also provides individual market impacting factors and changes in market regulation that impact the current and future trends of the market. Data points like down-stream and upstream value chain analysis, technical trends and porter's five forces analysis, case studies are some of the pointers used to forecast the market scenario for individual countries. Also, the presence and availability of global brands and their challenges faced due to large or scarce competition from local and domestic brands, impact of domestic tariffs and trade routes are considered while providing forecast analysis of the country data.
Competitive Landscape and Base Oil Market Share Analysis
The base oil market competitive landscape provides details by competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies' focus related to base oil market.
Some of the major players operating in the base oil market are
- Chevron Corporation (U.S.)
- Exxon Mobil Corporation (U.S.)
- S-OIL CORPORATION (South Korea)
- Motiva Enterprises LLC (U.S.)
- SK innovation Co., Ltd. (South Korea)
- Shell (Netherlands)
- Neste (Finland)
- AVISTA OIL Deutschland GmbH (Germany)
- Nynas AB (Sweden)
- Repsol (Spain)
- Ergon, Inc. (U.S.)
- Calumet Specialty Products Partners, L.P. (U.S.)
- H&R Group (Germany)
- Sinopec Corp. (China)
- PetroChina Company Limited (China)
- Saudi Aramco (Saudi Arabia)
- Abu Dhabi National Oil Company (ADNOC) (UAE)
- PT Pertamina (Persero) (Indonesia)
- Phillips 66 Company (U.S.)
- Petroliam Nasional Berhad (PETRONAS) (Malaysia)