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Growth in Automotive Industry and Industrialization to Boost Global Demand for Base Oil, reports TMR

The global base oil market is moderately concentrated in nature, however, many vertically-integrated oil and gas companies occupy a significant share of the supply market. The top three companies, ExxonMobil Corporation, Royal Dutch Shell Plc., and SK Lubricants occupied 38.4% of the global market in 2014. Some other key companies operating in the global base oil market are Chevron Corporation, GS Caltex Corporation, PetroChina Company Limited, Philips 66 Company, and MOGoil GmbH. Currently, there is an oversupply of base oil across many regions, which is expected to propel the market, states Transparency Market Research (TMR) in its new report. The global base oil market is undergoing a shift, as the choices of end users for base oils are changing considerably.

The global base oil market was valued at US$30,437.1 mn in 2015 and is predicted to reach US$30,973.1 mn by 2020 at a 0.3% CAGR from 2015 to 2020. By product, in 2014, the global market for base oil was dominated by the group I segment and this segment is expected to maintain its dominance throughout the forecast period. The group I segment is expected to hold 52.7% of the global market by 2020. The group II product segment is predicted to be the second dominant segment in the years to come.

Growth in Automotive Industry to Drive Demand for Base Oils

By application, the global base oil market is expected to be dominated by automotive oils by 2020, followed by industrial oils. The automotive oils application segment will hold 45.0% of the global market by 2020, states a TMR analyst. The auto industry is a key market for lubricants where lubricants such as motor oil are commonly used in engines to minimize friction between various moving parts. A consistent rise in the production of various vehicles is expected to boost the demand for base oils from the automotive industry. By geography, Asia Pacific is expected to hold 41.1% of the global base oil market by 2020.

Production of Environment-friendly Base Oils to Benefit Global Market

Stringent rules related to emission are being implemented worldwide. Over the past few years, there have been many enhancements made in fuel economy. The demand for environment-friendly base oils is increasing from various industries including automotive, metalworking, and marine. Key companies are concentrating on manufacturing environment-friendly lubricants. The global market for base oil will also be benefited by growing industrialization in many emerging economies. Nations such as China, India, and Brazil are developing swiftly. Various industries have been set-up to sustain the developments, which has boosted the demand for base oil. Rising population is expected to augment the demand for commercial and passenger vehicles, thus is expected to drive the demand for base oil. 

Fluctuating Crude Oil Prices can Affect Global Market

The prices of crude oil are consistently fluctuating, which is a key factor expected to hamper the growth of the global base oil market. Refiners are gradually shifting their preferences towards heavy, sour crude oil, which is predicted to restrict the growth of the global base oil market. The entry of new players will also make the market highly competitive and challenging.

Gas-to-Liquid Technology to Expand Supply of Pure Base Oil

Gas-to-liquid (GTL) technology is emerging significantly in many regions. GTL base oils are being used to produce efficient lubricants. The rising use of GTL technology is expected to increase the supply of efficient and pure base oils at competitive prices.

This information is based on the findings of a report published by Transparency Market Research titled “Base Oil Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2014 - 2022.”

The global base oil market is segmented as follows:

Global Base Oil Market: Product Analysis

  • Group I
    • SN150
    • BS150
    • SN500
    • Others
  • Group II
    • 150N
    • 500N
    • 600N
    • Others
  • Group III
    • 2cSt
    • 4cSt
    • 6cSt
    • 8cSt
    • Others

Global Base Oil Market: Application Analysis

  • Automotive Oils
  • Industrial Oils
  • Process Oils
  • Metalworking Fluids
  • Hydraulic Oils
  • Others

Global Base Oil Market: Regional Analysis

  • North America
  • Europe
  • Asia Pacific
  • Central & South America
  • Middle East & Africa

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