Base Oil Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| CAGR (2024 - 2029) | 1.51 % |
| Fastest Growing Market | Middle East and Africa |
| Largest Market | Asia Pacific |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Base Oil Market Analysis
The Base Oil Market size is estimated at 34.63 Million tons in 2024, and is expected to reach 37.31 Million tons by 2029, growing at a CAGR of 1.51% during the forecast period (2024-2029).
The demand for base oil decreased significantly in 2020 due to the outbreak of COVID-19. The virus caused production to decline in the automotive industry and various other industrial units (aviation, industrial, etc.). The reduction in the consumption of engine oil, gear oil, greases, and metalworking fluid affected the base oil market. However, in 2021 and 2022, the base oil market recovered as car manufacturing and production activities across other industries ramped up.
- Rapid industrialization in Asia-Pacific, considering the industrial application of base oil such as hydraulic fluid and industrial gear oil, and growing automotive production and sales are expected to drive the market's growth during the forecast period.
- On the flip side, the declining demand for group I base oils due to the preference for lighter viscosity base oils is likely to hamper the market's growth over the forecast period.
- Nevertheless, innovations in the field of renewable base oils and recycling of base oils are anticipated to provide opportunities for the market studied.
- Asia-Pacific is expected to dominate the market owing to significant demand from countries such as China, India, and Japan.
Base Oil Market Trends
The Engine Oil Segment to Dominate the Market
- The engine oil segment dominates the base oil market due to the growing demand for engine oil from various industries such as automotive, power, heavy equipment, metalworking, and chemicals.
- Engine oils are widely used to lubricate internal combustion engines. They generally contain about 7% to 10% additive chemicals, with the rest as base oil.
- Properties like oxidation stability, deposit control, and wear and corrosion protection are the key factors taken into consideration when forming engine oils using different base oils and additives. High-mileage engine oils are in demand lately, owing to the properties that help prevent oil leaks and reduce oil consumption.
- Additionally, various investments and developments in business practices are enhancing the demand for engine oil, which may boost the market for base oil. For instance, in April 2023, Brakes India announced it would enter the lubricants segment through the Revia brand. With its new brand, the company is diversifying into the engine oil space, catering to both passenger car and commercial vehicle segments.
- Furthermore, in March 2023, Exxon Mobil Corporation announced the investment of nearly INR 900 crore (USD 110 million) to build a lubricant manufacturing plant at the Maharashtra Industrial Development Corporation’s Isambe Industrial Area in Raigad. The new plant is expected to produce 159,000 kiloliters of finished lubricants per year, with commercial startup expected by 2025.
- In addition, in February 2023, Shell PLC announced the launch of its passenger car motor oil portfolio, Shell Helix SP HX8 0W-20. According to the company, the product is a fully synthetic, BS VI-compliant engine oil designed for turbocharged petrol direct injection (TGDI) engines to protect against damaging low-speed pre-ignition (LSPI). The company also claims to aid a vehicle’s fuel economy while reducing emissions and changes in engine design.
- The demand for engine oil from the automotive sector is expected to enhance the base oil market. According to OICA, global motor vehicle sales amounted to 92.72 million in 2023 compared to 82.87 million in 2022.
- Hence, the aforementioned factors are expected to influence the growth of base oil in the engine oil segment over the forecast period.
Asia-Pacific to Dominate the Market
- Asia-Pacific is expected to dominate the global market. With the growing consumption of lubricants from various sectors in countries like China, India, Japan, and South Korea, the usage of base oil is increasing in the region.
- According to the data published by the International Trade Administration, China’s demand for automotive lubricants is expected to reach 5.19 billion liters in 2026, registering a CAGR of 5.41% during the 2021-26 period. It is expected to drive the demand for base oils in the country.
- Similarly, according to the data published by the National Bureau of Statistics, China’s industrial output grew by 4.5% year-on-year in March 2024. The slowdown of operations in the manufacturing, utilities, and mining sectors from September 2023 to December 2023 restricted the overall Y-o-Y growth of industrial output.
- In India, strong growth in vehicle population (12% Y-o-Y growth in vehicle sales in 2023) and increasing industrial activity (5.7% on an annual basis in February 2024) are expected to drive the demand for base oils during the forecast period.
- Additionally, in Japan, various large-scale lubricant manufacturers are relying on long-term supply contracts to meet the domestic base oil demand. For instance, in October 2023, Idemitsu Kosan Co. Ltd signed an MoU to secure a long-term stable procurement of group III base oil.
- As a result, the above-mentioned factors are projected to substantially influence the base oil market in Asia-Pacific during the forecast period.
Base Oil Industry Overview
The base oil market is fragmented in nature. The major players (not in any particular order) include Exxon Mobil Corporation, Saudi Arabian Oil Co. (Aramco), PetroChina, Chevron Corporation, and China Petrochemical Corporation (SINOPEC).
Base Oil Market Leaders
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Exxon Mobil Corporation
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Saudi Arabian Oil Co. (Aramco)
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PetroChina
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Chevron Corporation
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China Petrochemical Corporation (SINOPEC)
*Disclaimer: Major Players sorted in no particular order
Base Oil Market News
- September 2023: PETRONAS Lubricants International, in collaboration with PT Kilang Pertamina Internasional, signed a joint study agreement (JSA) to explore the possibility of developing new greenfield lube base oil in Refinery Unit (RU) IV Cilacap, Central Java. This collaboration is anticipated to provide a technical and detailed feasible study. It is further expected to cater to the demand of the Indonesian market along with the growing regional market, including China and Southeast Asia.
- July 2023: Chevron Corporation began making four centiStoke API group III base stocks at its refinery in Richmond, California. The change will boost the United States' output of group III stocks. It will help accommodate rising demand for the category while reducing dependence on imports.
Base Oil Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
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4.1 Drivers
- 4.1.1 Rapid Industrialization in Asia-Pacific
- 4.1.2 Growing Automotive Production and Sales
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4.2 Restraints
- 4.2.1 Declining Demand for Group I Base Oils
- 4.3 Industry Value Chain Analysis
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4.4 Porter's Five Forces Analysis
- 4.4.1 Bargaining Power of Suppliers
- 4.4.2 Bargaining Power of Buyers
- 4.4.3 Threat of New Entrants
- 4.4.4 Threat of Substitute Products and Services
- 4.4.5 Degree of Competition
5. MARKET SEGMENTATION (Market Size in Volume)
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5.1 Type
- 5.1.1 Group I
- 5.1.2 Group II
- 5.1.3 Group III
- 5.1.4 Group IV
- 5.1.5 Other Types (Group V and Bio-based Base Oils)
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5.2 Application
- 5.2.1 Engine Oils
- 5.2.2 Transmission and Gear Oils
- 5.2.3 Metalworking Fluids
- 5.2.4 Hydraulic Fluids
- 5.2.5 Greases
- 5.2.6 Other Applications (Process Oils, Turbine Oil, Compressor Oil, Circulating Oils, etc.)
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5.3 Geography
- 5.3.1 Asia-Pacific
- 5.3.1.1 China
- 5.3.1.2 India
- 5.3.1.3 Japan
- 5.3.1.4 South Korea
- 5.3.1.5 Malayisa
- 5.3.1.6 Indonesia
- 5.3.1.7 Vietnam
- 5.3.1.8 Thailand
- 5.3.1.9 Rest of Asia-Pacific
- 5.3.2 North America
- 5.3.2.1 United States
- 5.3.2.2 Canada
- 5.3.2.3 Mexico
- 5.3.3 Europe
- 5.3.3.1 Germany
- 5.3.3.2 United Kingdom
- 5.3.3.3 France
- 5.3.3.4 Italy
- 5.3.3.5 Spain
- 5.3.3.6 NORDIC Countries
- 5.3.3.7 Turkey
- 5.3.3.8 Russia
- 5.3.3.9 Rest of Europe
- 5.3.4 South America
- 5.3.4.1 Brazil
- 5.3.4.2 Argentina
- 5.3.4.3 Colombia
- 5.3.4.4 Rest of South America
- 5.3.5 Middle East and Africa
- 5.3.5.1 Saudi Arabia
- 5.3.5.2 South Africa
- 5.3.5.3 United Arab Emirates
- 5.3.5.4 Egypt
- 5.3.5.5 Qatar
- 5.3.5.6 Nigeria
- 5.3.5.7 Rest of Middle East and Africa
6. COMPETITIVE LANDSCAPE
- 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
- 6.2 Market Share Analysis
- 6.3 Strategies Adopted by Leading Players
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6.4 Company Profiles
- 6.4.1 ADNOC (Abu Dhabi National Oil Company)
- 6.4.2 Chevron Corporation
- 6.4.3 China Petrochemical Corporation (SINOPEC)
- 6.4.4 CNOOC Limited
- 6.4.5 Exxon Mobil Corporation
- 6.4.6 Formosa Petrochemical Corporation
- 6.4.7 Gazprom Neft PJSC
- 6.4.8 GS Caltex Corporation
- 6.4.9 Indian Oil Corporation Ltd
- 6.4.10 LUKOIL
- 6.4.11 Nynas AB
- 6.4.12 Petrobras
- 6.4.13 PetroChina
- 6.4.14 PETRONAS Lubricants International
- 6.4.15 Philips 66 Company
- 6.4.16 Repsol
- 6.4.17 Saudi Arabian Oil Co. (ARAMCO)
- 6.4.18 Sepahan Oil Company
- 6.4.19 Shandong Qingyuan Group Co. Ltd
- 6.4.20 Shell PLC
- 6.4.21 SK Innovation Co. Ltd
- 6.4.22 Total Energies
- *List Not Exhaustive
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
- 7.1 Innovation in the Field of Renewable Base Oils
- 7.2 Recycling of Base Oils
Base Oil Industry Segmentation
Base oils are one of the specialty products that a refinery can produce and are not considered as fuel. Base oils are categorized into five groups, i.e., group I-V. The first three groups are derived from downstream petroleum refinery plants. Group IV base oils are synthetic (polyalphaolefins) oils.
The base oil market is segmented by type, application, and geography. By type, the market is segmented into group I, group II, group III, group IV, and other types (group V and bio-based base oils). By application, the market is segmented into engine oils, transmission and gear oils, metalworking fluids, hydraulic fluids, greases, and other applications (process oils, turbine oil, compressor oil, circulating oils, etc.). The report also covers the market size and forecasts for the base oil market in 27 countries across major regions. For each segment, the market sizing and forecasts are done based on volume (tons).
| Type | Group I | |
| Group II | ||
| Group III | ||
| Group IV | ||
| Other Types (Group V and Bio-based Base Oils) | ||
| Application | Engine Oils | |
| Transmission and Gear Oils | ||
| Metalworking Fluids | ||
| Hydraulic Fluids | ||
| Greases | ||
| Other Applications (Process Oils, Turbine Oil, Compressor Oil, Circulating Oils, etc.) | ||
| Geography | Asia-Pacific | China |
| India | ||
| Japan | ||
| South Korea | ||
| Malayisa | ||
| Indonesia | ||
| Vietnam | ||
| Thailand | ||
| Rest of Asia-Pacific | ||
| Geography | North America | United States |
| Canada | ||
| Mexico | ||
| Geography | Europe | Germany |
| United Kingdom | ||
| France | ||
| Italy | ||
| Spain | ||
| NORDIC Countries | ||
| Turkey | ||
| Russia | ||
| Rest of Europe | ||
| Geography | South America | Brazil |
| Argentina | ||
| Colombia | ||
| Rest of South America | ||
| Geography | Middle East and Africa | Saudi Arabia |
| South Africa | ||
| United Arab Emirates | ||
| Egypt | ||
| Qatar | ||
| Nigeria | ||
| Rest of Middle East and Africa |
Base Oil Market Research FAQs
How big is the Base Oil Market?
The Base Oil Market size is expected to reach 34.63 million tons in 2024 and grow at a CAGR of 1.51% to reach 37.31 million tons by 2029.
What is the current Base Oil Market size?
In 2024, the Base Oil Market size is expected to reach 34.63 million tons.
Who are the key players in Base Oil Market?
Exxon Mobil Corporation, Saudi Arabian Oil Co. (Aramco), PetroChina, Chevron Corporation and China Petrochemical Corporation (SINOPEC) are the major companies operating in the Base Oil Market.
Which is the fastest growing region in Base Oil Market?
Middle East and Africa is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Base Oil Market?
In 2024, the Asia Pacific accounts for the largest market share in Base Oil Market.
What years does this Base Oil Market cover, and what was the market size in 2023?
In 2023, the Base Oil Market size was estimated at 34.11 million tons. The report covers the Base Oil Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Base Oil Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What are the major application segments of the Base Oil Market?
The major application segments of the Base Oil Market are a) Engine Oils b) Transmission and Gear Oils c) Metalworking Fluids d) Hydraulic Fluids and Greases
What are the major application segments of the Base Oil Market?
The major application segments of the Base Oil Market are a) Engine Oils b) Transmission and Gear Oils c) Metalworking Fluids d) Hydraulic Fluids and Greases
Base Oil Industry Report
The global base oil market is experiencing significant growth, driven by the increasing demand for high-grade oils in the automotive industry and rapid industrialization in developing nations. Segmented based on product types, including Group I, Group II, and Group III base oils, Group II oils are gaining popularity due to their high performance and affordability. The Dominating market is the automotive oils application segment, fueled by the rising production of motor vehicles and the growing automotive sector in regions like Asia Pacific. The market is influenced by trends such as the shift towards electric vehicles, impacting the demand for certain lubricants. Despite challenges like fluctuating crude oil prices and declining demand for Group I base oils, opportunities arise from innovations in recycling base oils and the lucrative markets in BRIC countries. Base oil suppliers are highly competitive, focusing on expanding production capacities and introducing innovative products to meet the evolving needs of various industries, including automotive, industrial, and manufacturing sectors. Statistics for the Base Oil market share, size, and revenue growth rate are provided by Mordor Intelligence™ Industry Reports, which include a market forecast outlook and historical overview of this industry analysis is available as a free report PDF download.
