Base Oil Market Projected to Reach USD 65.9 Billion by 2036, With 3.8 % CAGR

The global Base Oil market was valued at USD 43.7 billion in 2025 and is projected to reach USD 65.9 billion by 2036, expanding at a CAGR of 3.8% from 2026 to 2036. The steady growth reflects sustained demand, ongoing technological advancements, and expanding application scope across key end-use industries worldwide.

The base oil market is at the forefront of the lubricants sector, whereby it ensures smooth operation of the diverse machines and vehicle engines across the globe. Rapid industrialization is a major factor driving market revenue. Lubricants are gaining traction in several end-use industries including automotive, industrial machinery, and energy.

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Base oils are the foundation of lubricant compositions. They play an important role in the performance and lifetime of different industrial and automobile engines. Base oils are generally obtained by refining crude extracts at various temperatures and pressures. These oils are widely classified into numerous classes based on underlying attributes such as temperature and viscosity correlation, with each having distinct uses across diverse sectors. They provide lubrication, heat dissipation, and corrosion prevention.

The major players operating in the global base oil industry are emphasizing the development of advanced products for expanding their customer base. These novel products satisfy performance requirements and fit with environmental imperatives. The competitive dynamics of the base oil business are getting reshaped by this paradigm shift toward resource-efficient and eco-friendly lubricating solutions.

Key Findings of the Market Report

• Group II base oils held the largest market share in 2025, favored for their balance of performance and cost-effectiveness in automotive engine oils.

• The Group III and IV (Synthetic) segments are projected to witness the highest growth rates, driven by the demand for "long-drain" intervals and extreme-temperature performance.

• Automotive Oil remains the dominant application, accounting for over 45% of the market revenue as global vehicle production continues to scale in emerging markets.

• Asia-Pacific is the powerhouse of the market, representing nearly 50% of global demand, led by massive industrialization in China and India.

Global Base Oil Market: Growth Drivers

• Evolution of Engine Technology: Modern engines require low-viscosity oils to achieve better fuel economy. This shift mandates the use of Group III and synthetic base stocks that can maintain film strength at lower thicknesses.

• Stringent Emission Standards: Global mandates like Euro 7 and China VII are forcing lubricant blenders to move away from high-sulfur Group I oils toward cleaner, hydro-processed base stocks.

• Expansion of Industrial Machinery: Rapid growth in the manufacturing, mining, and construction sectors-particularly in the Middle East and Southeast Asia-is driving the demand for high-performance hydraulic and process oils.

• The "Premiumization" Trend: Consumer awareness regarding vehicle maintenance and the benefits of synthetic blends is shifting the retail market toward higher-margin premium products.

• Sustainability and Re-refining: Increasing environmental regulations are boosting the market for re-refined base oils (RRBO) and bio-based alternatives, supporting circular economy initiatives.

Global Base Oil Market: Regional Landscape

• Asia-Pacific continues to lead the market in both production and consumption. The region benefits from a high density of integrated refinery complexes and a massive automotive fleet. China is the single largest consumer, while India is seeing a rapid transition toward Group II and III production to meet BS-VI emission standards.

• North America and Europe are mature markets characterized by a heavy tilt toward synthetic (Group III, IV, and V) oils. In these regions, the decline of Group I production is most prominent as refineries either upgrade to hydro-cracking technologies or pivot toward renewable diesel and bio-lubricant feedstocks.

• The Middle East is emerging as a critical supply hub, with major players like Saudi Aramco (Luberef) expanding capacity to export high-quality Group II and III base stocks to global markets.

Global Base Oil Market: Key Players

Market leaders are increasingly investing in hydro-isomerization and refinery-petrochemical integration to optimize yield flexibility:

• SK Lubricants
• Shell plc
• Petronas
• ADNOC
• S-Oil Corporation
• Nynas AB
• Chevron Corporation
• Repsol
• GS Caltex Corporation
• PetroChina Company Limited
• Others

Base Oil Market Developments

• In March 2025, ExxonMobil began operating base stock production in Jurong Island, Singapore, and had a new base stock production capacity of its Group II base oils. This will allow lower value refinery streams to be converted into a higher performing group of base products (Group III) for automotive and industrial lubricant applications.

• In August 2025, Chevron Phillips Chemical announced a major upgrade in low viscosity polyalphaolefin (PAO) base oils at its Beringen facility in Belgium. The new capacity at Beringen has doubled production since the completion of the expansion to meet the growing demand for synthetic base oil used in high performance engine oils and the other kinds of specialty lubricants. This new production capacity also satisfies the current and predicted industry trends towards lower viscosity, fuel efficient lubricants as influenced by OEM performance requirements and regulations regarding emissions.

• In July 2024, TotalEnergies bought Finnish re-refiner Tecoil and now has a bigger share of the market for re-refined base oils. This purchase also allows TotalEnergies to use Tecoil's collection system for used oils as well as produce regenerated base oil at Tecoil's plant. The acquisition has facilitated TotalEnergies' circular economy strategy by allowing it to produce lower-carbon lubricant formulas and meet stricter environmental regulations in the automotive and industrial lubricant markets throughout Europe.

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Global Base Oil Market: Segmentation

By Group

• Group I
• Group II
• Group III
• Group IV (PAO)
• Group V (Esters, Naphthenics, etc.)

By Type

• Mineral Oil (Paraffinic & Naphthenic)
• Synthetic Oil
• Bio-based Oil
• Re-refined Oil

By Application

• Automotive Oil (Engine, Gear, Transmission)

• Industrial Oil
• Hydraulic Oil
• Metalworking Fluids
• Greases
• Process Oils

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa

Frequently Asked Questions

• How big was the base oil market in 2025?

The base oil market was valued at US$ 43.7 Bn in 2025

• How is the base oil industry expected to grow by 2036?

The base oil industry is expected to grow at a CAGR of 3.8% from 2026 to 2036

• What are the key drivers of the base oil market?

Rapid industrialization in emerging economies and sustained growth in automotive and industrial lubricant consumption.

• Which was the largest segment of the base oil market in 2025?

Group II was the largest group segment and its value is anticipated to grow at a CAGR of 4.1% during the forecast period

• Which region was the most lucrative in the base oil market in 2025?

Asia Pacific was the most lucrative region in 2025

• Who are the prominent players in the base oil business?

SK Lubricants, Shell plc, Petronas, ADNOC, S-Oil Corporation, Nynas AB, Chevron Corporation, Repsol, GS Caltex Corporation, PetroChina Company Limited are the major players in the base oil market

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