Base Oil Market Analysis

Global Base Oil Market Overview

Base Oil Market Size was valued at USD 28.48 Billion in 2023. The Base Oil industry is projected to grow from USD 29.82 Billion in 2024 to USD 41.15 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 4.11% % during the forecast period (2024 - 2032). The growing demand for high-grade oils in the automotive industry & increasing utilization of Automobile oils from industries such as metallurgy, automotive, chemicals, heavy equipment, and power generation are the key market drivers enhancing the market growth.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Base Oil Market Trends

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  Changes in the automotive industry and fluctuations in crude oil prices is driving the market growth

  
  

Market CAGR for base oil has a combination of factors, including changes in the automotive industry and fluctuations in crude oil prices. The automotive industry is a major consumer of lubricants, and as such, it is a key driver of demand for base oils. The demand for high-performance lubricants is being driven by the need for more efficient and durable Automobiles, as well as the need for reduced emissions. The trend towards smaller, more fuel-efficient Automobiles requires lubricants that can withstand higher temperatures and pressures. This, in turn, requires base oils with higher viscosity indexes and better oxidation stability. Similarly, the push towards cleaner emissions requires lubricants with lower levels of sulfur and other harmful chemicals.

Additionally, growing demand for eco-friendly and bio-based lubricants, with the rising concerns about environmental degradation, there is an increasing demand for lubricants that are eco-friendly and do not harm the environment. The demand for eco-friendly lubricants has led to the development of bio-based lubricants, which are derived from natural sources such as plant oils, animal fats, and bio-synthetics. Bio-based lubricants have the advantage of being biodegradable, non-toxic, and sustainable, making them an attractive option for industries that prioritize environmental sustainability.

Furthermore, advancements in base oil production technology resulted in the development of advanced refining processes, which have enabled the production of high-quality base oils. These advancements have led to the production of base oils with better performance characteristics, such as improved oxidation resistance, better low-temperature fluidity, and higher viscosity indexes. The development of Group III and Group IV base oils, which are derived from hydrocracking and synthetic processes, respectively, have resulted in the production of high-performance lubricants that can meet the demands of modern machinery.

For instance, The U.S. Environmental Protection Agency (EPA) set strict standards for the sulfur content in base oils used in diesel Automobile oils. As per U.S. Energy Information Administration, the Tier 3 standards reduced the sulfur content in gasoline from an average of 30 parts per million (ppm) to 10 ppm and in diesel fuel from an average of 500 ppm to 15 ppm. The EPA estimates that these standards reduce emissions of nitrogen oxides, particulate matter, & volatile organic compounds by approximately 25%. Thus, driving the Base Oil market revenue.

Base Oil Market Segment Insights

Base Oil Type Insights

The  Base Oil market segmentation is segmented based on type, which includes Group I, Group II, Group III, Group IV, and Group V. The Group I segment dominates the market, accounting for 42.5% of market revenue due to its affordability, simple processing, low volatility, high viscosity index, and lubrication properties, leading to increased usage in automotive, marine, and rail lubricants.Figure 1: Base Oil Market, by Type, 2022 & 2032 (USD billion)                   

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Base Oil Application Insights

The  Base Oil market segmentation, based on application, includes Automobile Oils, Gear Oils, Metalworking Fluids, General Industrial Oils, Greases, Process Oils, Others. The automobile oils category generated the most income (42.8%). Due to increasing demand for greases, gear oil, Automobile oil, and others for lubricating the automobile components. ly, truck Automobiles and automobiles are the major consumers, consuming over 20 million tons of lubricants per year, accounting for about half of the total lubricant use.

Base Oil Regional Insights

By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The Asia Pacific region, with its emerging economies and increasing disposable income, is an attractive market for lubricant manufacturers and is expected to dominate the base oil market in the Asia-Pacific region.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: BASE OIL MARKET SHARE BY REGION 2022 (%)                 

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe Base Oil market accounts for the second-largest market share due rapid industrial expansion & increased in foreign investment. Further, the German Base Oil market held the largest market share, and the UK Base Oil market was the fastest growing market in the European region

The North America Base Oil Market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to discovery of large-scale shale oil reserves and significant investments in expanding refining capacities. Moreover, Canada Base Oil market held the largest market share, and the Mexico Base Oil market was the fastest growing market in the north America region.

For instance, recently International Energy Agency of U.S., the demand for transportation fuels in the U.S. is expected to increase by 14% between 2019 and 2040, driving the demand for base oil.

Base Oil Key Market Players & Competitive Insights

To expand their product lines and grow the Base Oil market further, leading market players are investing heavily in research and development. These market participants are also taking strategic steps to expand their  footprint, such as launching new products, forming contractual agreements, engaging in mergers and acquisitions, making higher investments, and collaborating with other organizations. The Base Oil industry must offer cost-effective items to survive in a more competitive and rising market climate.

Manufacturing locally to reduce operational costs is one of the key business tactics used by manufacturers in the  Base Oil industry to benefit clients and increase market share. In recent years, the Base Oil industry has offered some of the most significant advantages. Major players in the Base Oil market, including Chevron Corporation, Exxon Mobil Corporation, S-OIL CORPORATION, Motiva Enterprises LLC, SK Innovation Co., Ltd., and others, are investing in research and development operations to increase market demand.

Chevron Corporation is a multinational energy corporation headquartered in San Ramon, California, U.S. Its primary businesses include oil and natural gas exploration, production, refining, and marketing, as well as the manufacturing and sale of chemicals. It produces and markets a range of base oils under the Chevron, Texaco, and Havoline brands. Its base oils are produced at its refineries in the U.S., South Korea, and Singapore, which have a total base oil production capacity of approximately 600,000 barrels per day. Also, base oils are known for their high quality and performance, and are used in a range of applications, including Automobile oils, gear oils, hydraulic fluids, and greases. It offers a range of base oils, including Group I, Group II, and Group III base oils, which are designed to meet the needs of different applications and performance requirements.

S-Oil Corporation is a leading South Korean oil refining and marketing company that primarily engaged in the refining of crude oil, the production and sale of petroleum products, and the manufacturing and sale of petrochemical products. Its base oil products are marketed under the brand name YUBASE, and are widely used in various applications such as automotive, marine, industrial and aviation lubricants. S-Oil produces both Group II and Group III base oils, which are recognized for their high quality and performance. It developed a robust distribution network, which includes partnerships with leading  petroleum companies such as ExxonMobil and Shell.

Key Companies in the Base Oil market include

• Chevron Corporation


• Exxon Mobil Corporation


• S-OIL CORPORATION


• Motiva Enterprises LLC


• SK Innovation Co., Ltd.


• Royal Dutch Shell Plc


• Neste Oyj


• AVISTA OIL AG


• Nynas AB


• Gatik and Goodyear

Base Oil Industry Developments.

September 2021: Gatik and Goodyear announced a multi-year collaboration to advance mobility solutions for the sovereign B2B short-haul logistics industry. Both the firms say the partnership will contribute to more sustainable and safer goods movement while lowering costs for Gatik's customers nationwide in the B2B short-haul market.

January 2020: Nynas AB introduced NYFLEX 201B and NYFLEX 2005, which are highly refined process oils by for use in sealant formulations.

August 2019: ExxonMobil Chemical Company, a subsidiary of Exxon Mobil Corporation, has chosen Synergy Additives Company S.A. de C.V. (Mexico) as the distributor of its Group IV/V base stocks (synthetic base stocks) in Mexico, Central America, and the Caribbean. This move has helped enhance the company's geographic presence.

Base Oil Market Segmentation:

Base Oil Type Outlook

• Group I


• Group II


• Group III


• Group IV


• Group V

Base Oil Application Outlook

• Automobile Oils


• Gear Oils


• Metalworking Fluids


• General Industrial Oils


• Greases


• Process Oils


• Others

Base Oil Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America