The global base oil market was valued at US$ 33.2 Bn in 2017 and is projected to expand at a CAGR of 1.7% from 2018 to 2026, according to a new report titled ‘Base Oil Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2018–2026,’ published by Transparency Market Research (TMR) Growth in the global automotive sector and increase in number of manufacturing plants are key factors driving the global base oil market.
In terms of grade, the global base oil market has been classified into group I, group II, group III, group IV (PAO), group V (excluding naphthenic), naphthenic, and re-refined. The group I segment has been further sub-segmented into SN150, BS150, SN250, SN500, and others. Similarly, the group II segment has been sub-segmented into N150, N250, N500, N600, and others. The group III segment has been sub-segmented into 2cSt, 4cSt, 6cSt, and 8cSt. The naphthenic segment has been further divided into 35-60 SUS, 80-130 SUS, 200-300 SUS, 400-800 SUS, and above 1200 SUS. The group I segment held dominant share of 37.1% of the global base oil market in terms of volume in 2017. However, the demand and supply for group I has been declining. It is being replaced by group II and group III base oils. In terms of volume, the group II and group III base oil segments are anticipated to expand at CAGRs of 1.8% and 2.5%, respectively, between 2018 and 2026.
Based on application, the base oil market has been segregated into automotive fluids, process oils, industrial oils, metalworking fluids, hydraulic oils, and others. Automotive fluids is the dominant segment of the market. Automotive fluids essentially consist of engine oils, transmission oils, brake fluids, suspension oils & fluids, bearing lubricants, and friction-reducing greases. These fluids and oils are essential in smooth functioning of an automotive. Industrial oil is also a prominent application of base oils. Industrial machinery requires substantial amount of lubricants for friction reduction and cooling. Base oils are also used in the manufacture of hydraulic oils, which are employed in various machineries and equipment. Construction equipment, heavy duty presses, aircraft flight control systems, and hydraulic lifts are among key application areas of hydraulic oils.
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Geopolitical events and volatility in crude oil prices adversely affect the supply of crude oil. This creates disruptions in the base oil market. Economic recession and stagnating automotive sales are the factors that hamper the demand for base oil. However, demand for base oil is expected to rise steadily during the forecast period, led by the recovery in the global economy. However, rise in popularity of electric vehicles is anticipated to hamper the demand for base oil during the latter half of the forecast period. Furthermore, fluctuation in prices of crude oil has been negatively impacting the global base oil market since the last few years.
Key market players profiled in the research study include Royal Dutch Shell Plc, Nynas AB, China Petrochemical Corporation, ExxonMobil Corporation, PetroChina Company Limited, GS Caltex Corporation, The Phillips 66 Company, SK Lubricants Co. Ltd, British Petroleum, and Chevron Corporation.