The global base oil market size was valued at USD 19.46 billion in 2022 and is anticipated to expand at a compound annual growth rate (CAGR) of 5.5% from 2023 to 2030. The growth is attributed to increasing utilization of engine oils from industries such as metallurgy, automotive, chemicals, heavy equipment, and power generation. The market is highly fragmented with presence of a large number of highly innovative players. The competition is intense as the participants engage in maintaining their customers to have a competitive edge over each other. Companies are adopting collaborative business strategy to increase their productivity, provide highly regarded products to consumers, and expand their regional presence.
Base Oil is critically utilized in the lubricant oil formulation globally with widespread application across a multitude of industries. Group I base oils are majorly utilized in marine lubricants which are widely utilized in the shipping industry to protect and enhance the efficiency of engines and equipment. These are high-performance marine lubricants that require high viscosity base oils, specially designed to enable optimal performance in operations.
Gather more insights about the market drivers, restrains and growth of the Base Oil Market
Product Insights
Group I product dominated the market with a revenue share of 42.5% in 2022. This is attributed to increase in usage in automotive, marine, and rail lubricants due to their affordability, simple processing, low volatility, high viscosity index, and lubrication properties. Group I product are classified as greater than 0.03% sulfur, less than 90% saturates, and viscosity range from 80 to 120. This group is characterized by its low aromatic compound content and paraffinic nature. The temperature range is from 32˚F to 150˚F. Compared to all other groups, group I are less refined and are a mixture of different hydrocarbon chains with little uniformity.
Group II product accounted for the second largest revenue share in the year 2021. This is because of its easy availability and new capacity additions near the countries in Asia Pacific and Middle East region coupled with competitive prices. Globally, over 90% volume of lubricants can be formulated from group II type. The prices of Group II type are close to that of group I, therefore, they have become common in the market.
Application Insights
The automotive oils application dominated the market with a revenue share of 42.8% in 2022. Its high share is attributable to increasing demand for greases, gear oil, engine oil, and others for lubricating the automobile components. Globally, truck engines and automobiles are the major consumers, consuming over 20 million tons of lubricants per year, accounting for about half of the total lubricant use. With vehicle manufacturers pushing toward meeting pollution standards, the automobile market is anticipated to prompt oil companies to produce base oils.
The demand for automobile oils is anticipated to witness noteworthy growth due to rising popularity of fragrance products for homes in developed economies such as Germany, the U.K., the U.S., and Canada. Blended, paraffin, beesbase, palm, and soy base oils are the most commonly purchased automobile oils in the market.
Regional Insights
Asia Pacific region dominated the market with a revenue share of 49.8% in 2022. This is attributed to the presence of emerging economies and increasing disposable income of people in the region making it an attractive market for lubricant manufacturers. Asia Pacific is one of the largest product market globally, with China being the dominant country in the region.
China is projected to lead the Asia Pacific base oil market over the forecast period. The dominance is attributed to the increased use of automobiles and the rapid growth of manufacturing industry in the country. The market in China is also supported by the accessibility of raw materials, increased foreign investments, rapid industrialization, and a growing population. Similarly, the market in India is expected to witness a high growth rate owing to the strong presence of several base oil producers, and rapid infrastructure development undertaken by the government of India.
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Key Base Oil Companies:
- CNOOC Limited
- PetroCanada Lubricants Inc.
- Pertoleum & Chemical Corp. (SINOPEC)
- PETRONAS Lubricants International
- PT Pertamina (Persero)
- PetroChina Co., Ltd
- Exxon Mobil Corporation
- Abu Dhabi National Oil Company
- Chevron Corporation
- Shell plc
- Indian Oil Corporation Ltd
- BP p.l.c
- Saudi Arabian Oil Co.
- Sepahan Oil
- Bahrain Lube Base Oil Company
- LUKOIL
- SK Lubricants Co., Ltd.
- H&R OWS Chemie GmbH & Co. KG
- Bharat Petroleum Corporation Limited
- GS Caltex Corporation
- Neste
- Repsol
Base Oil Market Segmentation
Grand View Research has segmented the global base oil market on the basis of product, application, and region:
Base Oil Product Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)
- Group I
- Group II
- Group III
- Group IV
- Group V
Base Oil Application Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)
- Automotive Oils
- Process Oils
- Hydraulic Oils
- Metalworking Fluids
- Industrial Oils
- Others
Base Oil Regional Outlook (Volume, Kilotons; Revenue, USD Million; 2018 - 2030)
- North America
- U.S.
- Canada
- Mexico
- Europe
- Germany
- U.K.
- France
- Italy
- Spain
- Asia Pacific
- China
- India
- Japan
- Thailand
- Malaysia
- Central & South America
- Brazil
- Argentina
- Middle East & Africa
- Saudi Arabia
- South Africa
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