Global Base Oil Market by Application (Industrial, Hydraulic, Automotive, Metalworking, Process) and Region (North America, Latin America, Europe, Asia Pacific and Middle East & Africa), Forecast To 2028

Summary of the Report

Global base oil market was worth USD 24.8 billion in 2019. It is projected to grow at a compound annual rate (CAGR of 5.1%) between 2020 and 2027. The automotive industry's rising demand for Group I and Group II oils is expected to continue to be a major driver of market growth. Base oils are an essential component of any lubricant. They allow them to achieve different specifications like viscosity and pour point as well as thermal stability, seal compatibility and additive solubility. Multiple processing techniques are used to refine the product, including conventional and advanced refining methods. The market for base oils is expected to grow due to the increasing demand for hydraulic fluids and greases.

Due to the recent COVID-19 pandemic worldwide, 2020 has seen a turbulent demand for the product. This is due to disruptions in supply chains associated with key feedstocks as well as a decrease in end-use market demand. The virus outbreak has caused disruptions in crude oil prices and availability since early 2020. This has hampered movement of end-use markets, including the automotive and industrial sectors. This resulted in a uneven supply of feedstocks, and eventually a slower-paced movement for the application industries.

Furthermore, overall demand for Lubricants is slow. This is due to projected low base oil operating rates worldwide. Every lubricant is made from base oils. Because most lubricant formulators do not have production facilities for group II or III, group I products are often seen to be at the top of the manufacturing price range. For non-lubricant product formulas, the application market players heavily depend on group II or group III products.

The market for base oil has seen significant technological changes over the past decade. Manufacturers are constantly investing in R&D to expand their portfolio. Gas-To-Liquid technology, for instance, has been commercialized successfully with an increase in both existing and planned global capacity expansion. GTL technology is promising because it offers high industry opportunities to create premium lubricating oil through isomerization or existing catalytic hydrocracking process.

A number of new GTL units are also in construction, adding approximately 404,100 b/cd to the total capacity for the forecast period. More than 50% of global GTL capacity will likely be found in the Middle East. This includes Qatar, UAE and other regions in Asia Pacific, Western Europe and North America. These regions will continue to be a major source of high-quality lubricant suppliers.

Product Insights

The market for base oil was dominated by the group 1 segment in terms of volume with a 51.7% share in 2019. Due to their unique characteristics and price, this is due to high demand from a variety of industries around the world. The American Petroleum Institute (API) classifies group I base oils as those containing less that 90.0% saturates and more than 0.03% sulfur. They also have viscosity indexes between 80 and 120. A group I product typically contains 90.0% base oil with 10.0% additive composition. It is usually made up of conventional petrochemical products. These oils can be purchased at very low prices because they are made by solvent refining.

Mineral-based motor oils that are derived from Group II base oils are often used. These oils have better antioxidant properties because they are saturated with hydrocarbon molecules. They are also clearer than the group 1 oil. They are more expensive than their group I counterparts due to the difference in production processes for these two categories. The performance of group II products in lubrication, such as volatility or stability in oxidation, is also well-known.

There are increasing capacity increases in the market for group II base oils, especially in Europe and Asia Pacific. In September 2014, Hyundai and Shell Base Oil Co. opened a new South Korean base oil manufacturing plant. It is estimated that the plant can produce group II products at 650,000 tons annually. Along with China and Singapore, the Middle East and Africa saw significant capacity growth in 2015.

Application Insights

With a 44.2% share in 2019, automotive applications dominated base oil markets. This can be attributed to technological advances in the automotive sector, such as automated vehicles and the exceptional performance of luxury cars. The growing middle-class population and the increasing number of young people who need vehicles to commute will drive demand for automotive products, which will fuel the market growth for base oil.

Motor oils (also known as motor oils) require approximately half the production of base oils. They have specific requirements for chemical and physical properties. Refiners ensure that the above properties are maintained within their processing capabilities while still meeting the automotive oil's performance requirements.

Due to availability of cheap labor and ample land, mature economies in North America and Europe are moving their production plants towards Asia Pacific. The demand for vehicles has been boosted by an ever-growing population and a growing middle class with more purchasing power and real income. Vehicles are now affordable because of easy access to loans and large funding sources.

They are used in many industries as either a raw material or as processing aids. They are used extensively in the technical and chemical industries to improve manufacturing processes. The Asia Pacific region is expected to see a rise in demand for base oils due to the growth of chemical processors in China, India and South Korea.

Regional Insights

Asia Pacific was the dominant market for base oil in 2019, accounting for 49.3%. This is due to the widespread adoption of the product within the automotive and industrial manufacturing industries of emerging economies like South East Asia, India, China and South East Asia. In the coming years, the market for base oils will grow due to favorable regulations that aim to improve fuel efficiency in vehicles and industrial machinery.

China is a country that is rich in natural resources. China is seeing an increase in demand for both industrial goods and automobiles from outside the country. The country is home to a significant portion of the population, and the economy is expected grow at an impressive rate in the future. It offers skilled labor at a low price and has many manufacturing facilities that are thriving to be the largest exporter of all essential commodities in the world.

Furthermore, Europe is seeing a rise in demand for fuel-efficient cars. This is due to strict regulations like the European Union Automotive Fuel Policy and the EU Directives. Regulation No 443/2009 established a 130 gram per kilometer average CO ₂ emission target for new passenger vehicles. Other factors that are likely to drive the industry include the availability of advanced processing technology and increased R&D effort in developed countries like the U.K. and Germany. Base oil demand is expected to rise in automotive and industrial machinery sectors, as well as other areas, due to the development of high-performance lubricants that use base oil.

Market Share Insights & Key Companies

Globally, the market for base oil is very competitive due to the presence of many multinational product formulators. These companies are able to integrate their operations throughout the value chain, ensuring consistent product delivery and stable prices. The majority of key industry players involved in manufacturing the product have established long-term relationships with regional automotive and industrial sector companies. This helps them to grow their market share and establish sustainable businesses within the local ecosystem. The market penetration of new players will be limited due to the high costs of setting up the plant and the global presence of international formulators. The following are some of the major players in the base oil market:

• ExxonMobil Corporation

• British Petroleum

• Royal Dutch Shell

• Chevron Corporation

• Saudi Aramco

• Total SA

• Sepahan Oil Company

• Bahrain Lube Base Oil Co.

• Lukoil

• Indian Oil Corporation

Up Market Research published a new report titled “Base Oil Market research report which is segmented by Application (Industrial, Hydraulic, Automotive, Metalworking, Process), By Players/Companies ExxonMobil Corporation, Chevron Corporation, British Petroleum, Sepahan Oil Company, Bahrain Lube Base Oil Co, Indian Oil Corporation, Saudi Aramco, Total SA, Lukoil, Royal Dutch Shell”. As per the study the market is expected to grow at a CAGR of XX% in the forecast period.

Report Scope

The report covers comprehensive data on emerging trends, market drivers, growth opportunities, and restraints that can change the market dynamics of the industry. It provides an in-depth analysis of the market segments which include products, applications, and competitor analysis.

Global Base Oil Market Report Segments:

The market is segmented by Application (Industrial, Hydraulic, Automotive, Metalworking, Process).

Base Oil Market research report delivers a close watch on leading competitors with strategic analysis, micro and macro market trend and scenarios, pricing analysis and a holistic overview of the market situations in the forecast period. It is a professional and a detailed report focusing on primary and secondary drivers, market share, leading segments and geographical analysis. Further, key players, major collaborations, merger & acquisitions along with trending innovation and business policies are reviewed in the report.

Key Benefits for Industry Participants & Stakeholders:

• Industry drivers, restraints, and opportunities covered in the study
• Neutral perspective on the market performance
• Recent industry trends and developments
• Competitive landscape & strategies of key players
• Potential & niche segments and regions exhibiting promising growth covered
• Historical, current, and projected market size, in terms of value
• In-depth analysis of the Base Oil Market

Overview of the regional outlook of the Base Oil Market:

Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa (MEA). North America region is further bifurcated into countries such as U.S., and Canada. The Europe region is further categorized into U.K., France, Germany, Italy, Spain, Russia, and Rest of Europe. Asia Pacific is further segmented into China, Japan, South Korea, India, Australia, South East Asia, and Rest of Asia Pacific. Latin America region is further segmented into Brazil, Mexico, and Rest of Latin America, and the MEA region is further divided into GCC, Turkey, South Africa, and Rest of MEA.

Highlights of The Base Oil Market Report:

1. The market structure and projections for the coming years.
2. Drivers, restraints, opportunities, and current trends of Base Oil Market.
3. Historical data and forecast.
4. Estimations for the forecast period 2028.
5. Developments and trends in the market.

                1. Industrial

                2. Hydraulic

                3. Automotive

                4. Metalworking

                5. Process

7. Market scenario by region, sub-region, and country.
8. Market share of the market players, company profiles, product specifications, SWOT analysis, and competitive landscape.
9. Analysis regarding upstream raw materials, downstream demand, and current market dynamics.
10. Government Policies, Macro & Micro economic factors are also included in the report.

We have studied the Base Oil Market in 360 degrees via. both primary & secondary research methodologies. This helped us in building an understanding of the current market dynamics, supply-demand gap, pricing trends, product preferences, consumer patterns & so on. The findings were further validated through primary research with industry experts & opinion leaders across countries. The data is further compiled & validated through various market estimation & data validation methodologies. Further, we also have our in-house data forecasting model to predict market growth up to 2028.

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• Correctly Positioning New Products
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Reasons to Purchase the Base Oil Market Report:

• The report includes a plethora of information such as market dynamics scenario and opportunities during the forecast period
• Segments and sub-segments include quantitative, qualitative, value (USD Million,) and volume (Units Million) data.
• Regional, sub-regional, and country level data includes the demand and supply forces along with their influence on the market.
• The competitive landscape comprises share of key players, new developments, and strategies in the last three years.
• Comprehensive companies offering products, relevant financial information, recent developments, SWOT analysis, and strategies by these players.