Base Oil Market Research, Key Players, Analysis And Forecast 2030: Grand View Research Inc.

Posted by Mrudula Anil Karmarkar on August 24th, 2023

The global base oil market size is expected to reach USD 29.89 billion by 2030, as per the new report by Grand View Research, Inc. The market is expected to expand at a CAGR of 5.5% from 2023 to 2030. This is attributed to rising demand for base stocks in the automotive and industrial applications. Lubricants are mainly used in gearboxes, lubricants & transmission oils, and diesel engine oils, in various automotive applications including commercial vehicles, motorcycles, and passenger cars. The automotive industry is one of the largest consumers of base oils that are growing at a faster pace.

This industry is currently facing massive shifts in terms of production from group I to group II and III. Although the shift in the sector is gradual, various factors including government directives, feedstock choices, and demand patterns play a major role in propelling the market. Also, key industry participants are expanding their businesses in the Asia Pacific region, owing to the rising industrial and automotive sectors in this region, which can further contribute to group II product demand.

The turbulence in the sector has had a significant impact on multiple other dependent industries such as base oils, lubricants, and others. Since 2023, the petroleum market has faced critical challenges as vehicle efficiency measures taken by governments worldwide to curb carbon emissions led to lower consumption of transport fuel. However, the market witnesses a strong presence of key players that competes to dominate the market and to gain strategic and competitive advantage over the other players.

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.

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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.

Base Oil Market Report Highlights

• Group V product witnessed the fastest growth rate of 7.1%, owing to its increasing use as an additive to other base oil products, and the usage of high-performance lubricants due to OEM recommendations
• Global base oil market is projected to benefit from the expansion of the base oil production capacity of emerging economies. As automobile manufacturers globally focus on downsizing their engines and prolonging the oil change intervals, these factors are anticipated to stifle the growth in the coming years
• The automotive oil application witnessed for the fastest growth rate of nearly 5.8%, as we can see growth in the sales of consumer automotive such as trucks, buses, and other forms of public transport
• Asia Pacific region witnessed the fastest growth rate globally with 6.2%. This is because of the high consumption of automotive fuel in this region, especially in China, India, and Japan
• The competition is high due to numerous companies engaging in strategic divestures and investments in the upstream facilities

Currently, the automotive sector is one of the major contributors to base oils globally. The demand for lubricants in manufacturing vehicles is expected to show continuity in its growth, however, the trend of electric vehicles has reduced the after sales growth for certain lubricants. Consumers are looking for standard and specialized products to satisfy specific requirements and thus lubricant manufacturers are investing in new product developments especially for the automotive industry. The growing consumption of lubricant manufacturers is anticipated to propel the demand for base oils over the forecast period.

Developing economies such as China, India, and Indonesia etc. are driving the manufacturing sector across the globe. According to World Bank, the value added of the manufacturing sector towards GDP was around 14% in 2021, an increased from the previous year. The growth is supported by the availability of raw material, reduced infrastructure cost, and labor cost. Owing to these factors base oil manufacturers are also shifting and expanding their production units in developing nations.

List of Key Players of Base Oil Market

• 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