The global Base Oil Market size was valued at USD 20.8 billion in 2021 and is projected to reach USD 30.9 billion by 2030, growing at a CAGR of 4.5% during the forecast from 2022 To 2030.
Base oil is a synthetic material or refined petroleum mineral that is used to manufacture motor oil, lubricating greases, and metal processing fluids. This oil is obtained by extracting and processing crude oil and high-viscosity material from vacuum gas oil or vacuum reside distillation cuttings. The driving factors for the base oil market are the increase in demand for high-grade oils in the automotive industry and increasing industrialization across emerging economies. In addition, the GDP growth of developing countries in the Asia Pacific is further acting as catalyzing factor for the growth of the market across the globe.
The pandemic is predicted to have a significant influence on the base oil end-use industries, which is estimated to be reflected during the years 2020–2021. The demand for cars and commercial vehicles was halted during this widespread various company such as Hyundai, Honda, Fiat Chrysler Automobiles, Ford, Tesla, General Motors, etc. temporarily paused the production of vehicles. In addition, the imposition of stringent lockdown policies also leads to the scarcity of resources in the manufacturing sector, which has triggered extreme economic uncertainty. For instance, the demand for industrial oil decreased between January and March as a result of a sharp decline in industrial production, retail sales, and investments. However, the gradual opening of the lockdown and rising government support to the manufacturing and industrial sector is substantially supporting the market growth in the global market.
The global Base Oil Market is segmented on the basis of Group (Group I, Group II, Group III, Group IV, Group V), the basis Application (Automotive Oil, Industrial Oil, Metalworking Fluid, Greases, Hydraulic Oil, Others)
The Group-I segment dominated the market and recorded the highest number of market revenue shares in 2021. The group I segment offers various benefits such as better affordability, high viscosity index, simple processing, low volatility, and lubrication properties. Thus, these advantages of group I of base oil are increasingly adopted by rail lubricants, automotive, and marine. The group is categorized by its paraffinic nature and low aromatic compound content, which is a combination of diverse hydrocarbon chains with little uniformity.
Whereas, the group II product segment is projected to grow at the highest CAGR over the forecasting years. Group II base oil is gaining high traction in applications such as marine and gas engines. Group II provides abridged sulfur concentration, oxidation stability, and stronger lower volatility, which are appropriate for use in lubricant formulations. This group is easily available at a competitive price, along with the establishment of new capacity across the countries in the Asia Pacific and the Middle East region is contributing to the segment growth in the impending years.
Drivers:
The emergence of advanced engine technology is presenting a huge impact on the demand for high-grade lubricants. The properties of high-grade lubricants including compatibility to compatibility and fast-moving parts are gaining huge traction across the automotive industry. The selection of the best base oil has a significant influence on the performance of the finished lubricants owing to the engine oils being manufactured with 70–90 percent base oil and 10–30 percent additives. Therefore, it is anticipated that the market for base oil is also be stimulated by the rising demand for high-grade engine oils. Diesel trucks, passenger automobiles, light-duty trucks, and stationary engines are utilizing high-performance engine oils that help them resist rigorous and extreme circumstances. According to the India Brand Equity Foundation, the market for passenger cars in India was valued at US$ 32.70 billion in 2021, and it is anticipated to grow to US$ 54.84 billion by 2027, with a CAGR of nearly 9%. Hence, the rising demand for passenger cars, light-duty trucks, diesel trucks, and other automobiles is prompting the need for base oil, which is augmenting the market growth across the globe.
The Asia Pacific is expected to account for the largest market size in 2021 owing to the increasing emphasis on industrial activities propelling the demand for base oil in this region. The presence of a huge consumer base in the region such as India, China, and Japan is stipulating the regional market demand. The increasing rate of motorization is leading to a significant rise in the GDP rate in the Asia Pacific region, which is fueling the demand for base oil. Moreover, the execution of stringent regulations by the regulatory bodies to strict performance standards is a further factor that is responsible for the growth of the base oil market in the Asia Pacific.
Key Market Players and Competitive Landscape
Base Oil Market Report Scope | |
| Report Attribute | Details |
| Market Size Value in 2022 | USD 21.7 billion |
| Revenue Forecast in 2028 | USD 28.3 billion |
| Growth Rate | CAGR of 4.5 % from 2022 to 2028 |
| Base Year for Estimation | 2021 |
| Historical Data | 2017 – 2021 |
| Forecast Years | 2022 – 2028 |
| Quantitative Units | Revenue in USD million and CAGR from 2022 to 2028 |
| Report Coverage | Revenue forecast, company ranking, Trends competitive landscape, and growth factors |
| Segments Covered | Group, Application, and Region |
| Regional Scope | North America; Europe; Asia Pacific; Latin America; Middle East & Africa |
| Country Scope | U.S.; Canada; U.K.; Germany; China; India; Japan; Brazil; Mexico and Others |
| Key Companies Profiled | Chevron Corporation (US), Motiva Enterprises LLC (US), Exxon Mobil Corporation (US), Calumet Specialty Products Partners, L.P. (US), Nynas AB (Sweden), SK innovation Co., Ltd. (South Korea), S-OIL CORPORATION (South Korea), Sinopec Corp. (China), AVISTA OIL AG (Germany), Royal Dutch Shell Plc (Netherlands), H&R Group (Germany), Neste Oyj (Finland), Ergon, Inc. (US), Repsol S.A. (Spain), Hindustan Petroleum Corporation Limited or HPCL (India) |
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