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Base Oil Market: Global Demand Analysis & Opportunity Outlook 2025

07-14-2022 09:54 AM CET | Energy & Environment

Press release from: Fairfield market research

Base Oil Market

Base Oil Market

Base oils are a complex mixture extracted from crude oils that have undergone refinery processing. Base oil types vary dramatically depending on the production process, percentage of saturated hydrocarbons, and viscosity index range. Base oil designations range from one to five and they can be further subdivided into aromatic, naphthenic, and paraffinic oil according to composition. Base oils are the primary raw material in lubrication manufacturing and serve as a foundation before they are blended with thickeners or additives in case of grease. Steady growth rates in the lubricants manufacturing industry are anticipated to benefit the base oil market during the forecast period.

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Move Towards HVI Hydraulic Fluids Directly Linked to Need for Superior Lubricants

Lubricant quality requirements have risen in lockstep with tougher vehicle emission norms and the industry moving towards high oxidation stability turbine oils and high viscosity index hydraulic fluids. Greenhouse gas emission guidelines, modernisation of heavy equipment and energy conservation necessitate higher performance of base oils compounding to challenges faced by companies that must meet tightening mandates. New base oils enable equipment and engine manufacturers to meet the demand for cleaner and greener lubricants playing a major role in combating climate change.

Decrease Machine Wear and Tear and Save Billions of Dollars by Investing in Lubricants

Lubricants are critically important in making machines and production lines function smoothly and with minimal bottlenecks. Lubricants minimize machine wear and tear and increase asset longevity thereby contributing to the company bottom line. It is estimated that the annual wear and tear and production loss in the US alone runs into hundreds of billions of dollars providing immense opportunities for companies actively involved in the base oil market.

Huge Prospects for Companies that Prioritize Development of Group III Base Oils in Market

There has been a notable shift from the American Petroleum Institute Group I to Group II in the base oil market. Group I base oils are deployed in railroad and marine applications with the lower viscosity ideally suited for sprays, processors, and transformers. Massive growth is predicted in the Group II and Group III base oil segments as they are the preferred choice in the automotive industry. A new form of ultra-performance base oils derived from wax via natural gas through the Fischer- Tropsch process is expected soon in the base oil market. The level of lubrication performance that could initially only be achieved in polyalphaolefin (PAO) and other forms of specialty stocks is now commonplace in the base oil market.

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Bio-Lubricant Based Base Oils Emerging as Popular Option in APAC Base Oil Market

Roughly 3/4th of base oil demand comes from APAC with China, India, and Indonesia being the largest consumers. With growth in China slowing, the emergent stars are India and Indonesia. An important area to focus on is electrical mobility as China and India aim to reduce rampant air pollution in their metropolitan areas allowing nanotube, mineral oil, and bio-lubricant based base oils to shine in the base oil market.
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