H1 2023: The Base Oil price trajectory in the Asian region exhibited varied dynamics throughout first half of 2023. During Mid-Q1 2023, Base Oil prices fluctuated marginally which continued its uptrend due to heavy base oil shortages. In mid-March, Asia's Base Oil prices slightly increased due to improved domestic demand. Temporary shortages occurred in the heavy grades market, leading to cargoes being scheduled to China from Taiwan and South Korea. Throughout the second quarter, the Asian base oil market continued to boom compared to the first quarter. The constant uptrend in Base Oil prices persisted until the second week of May, driven by improved domestic demand and supply constraints. Despite decreased cargo quantities from Northeast and Southeast Asia in May, along with Taiwanese cargoes, affecting China's supply chain, prices were tendered by increased feedstock crude oil prices and operating costs. In June, despite supply cuts of Group I base oil from Indonesia, Thailand, and Singapore, ample domestic producer stockpiles led to price drops. Dalian Hengli Petrochemical's Group II/III Base Oil production unit was shut down in China until mid-June further influenced prices towards downwards side.
The global Base Oil market stood around 47.7 million tonnes in 2023 and is expected to grow at a steady CAGR of 4.59% during the forecast period until 2034. The American Petroleum Institute (API) classifies base oils into five groups. Groups I, II, and III are refined from crude oil, with Group I being solvent-refined and the least expensive. Group II, manufactured by hydrocracking, offers better antioxidation properties and clarity. Group III undergoes further refining and is considered synthesized hydrocarbons. Group IV consists of polyalphaolefins (PAOs), offering a broader temperature range. Group V includes various base oils like silicone and esters, often mixed to enhance properties. Ester oils in Group V improve properties such as detergency and high-temperature endurance compared to PAO synthetic base oils.
Base oils, fundamental in the formulation of lubricants, find diverse applications across various industries. In the automotive sector, they serve as the backbone for engine oils and transmission fluids, ensuring optimal performance, reducing friction, and preventing wear in vehicles. Industrial machinery relies on base oils for lubrication in manufacturing processes, hydraulic systems, and gearboxes, contributing to the longevity and efficiency of equipment. Metalworking fluids incorporate base oils to enhance tool performance and extend tool life during cutting, machining, and shaping operations. Greases, essential semisolid lubricants, utilize base oils in automotive, industrial, and machinery applications, providing reliable and long-lasting lubrication. Hydraulic fluids, powered by base oils, facilitate the smooth operation of hydraulic systems in heavy machinery, construction equipment, and industrial settings. Base oils with excellent electrical insulating properties are crucial in transformer oils, supporting the cooling and insulation of electrical transformers. Compressor oils, utilizing base oils, ensure efficient air compressor and refrigeration system operation. Turbine oils, powered by base oils, contribute to the lubrication and cooling of power generation turbines. In marine and aviation applications, base oils form the foundation of lubricants for ship engines, auxiliary equipment, aircraft engines, and aviation equipment, ensuring reliable and efficient operation. Furthermore, base oils play vital roles in textile machinery lubrication, railway lubrication for locomotives and rolling stock, and various other applications. Their versatility and essential lubricating properties make base oils indispensable in maintaining the integrity and functionality of machinery across a spectrum of industrial sectors.
The Base oil market is intricately linked to diverse end-use sectors, each wielding significant influence. Foremost, automotive oils emerge as the largest consumer. This significant share is attributed to the escalating demand for various lubricants like greases, gear oil, and engine oil, primarily used for lubricating automobile components. On a global scale, truck engines and automobiles emerge as major consumers, As the automotive industry strives to meet stringent pollution standards, there is an anticipated surge in demand for base oils, prompting oil companies to scale up production. Anticipated growth in the demand for automotive oils is closely linked to the increasing popularity of fragrance products for homes, particularly in developing nations like China and India. The automotive industry remains a key driver of global base oil demand, particularly in lubricant manufacturing for vehicles. While the demand for lubricants in vehicle production is expected to sustain its growth, the rise of electric vehicles has tempered the post-sales growth for certain lubricants. Consumers are increasingly seeking both standard and specialized products tailored to meet specific requirements, prompting lubricant manufacturers to invest in new product developments, particularly within the automotive sector. The increasing consumption of lubricants is projected to drive demand for base oils in the foreseeable future. Throughout the projection period the increase in the demand of Base Oil from various sectors is likely to make it reach nearly 78 million tonnes in the forecast period of 2034.
Based on region, Asia Pacific region is the leading consumer of Base Oil all across the globe. The Asia Pacific region is poised to assert its dominance in the base oil market in the coming years due to several key factors. Rapid economic growth, accompanied by robust industrialization and urbanization, fuels a heightened demand for lubricants across diverse sectors, particularly in the thriving automotive industry. With increasing incomes, the region experiences a surge in vehicle ownership and production, driving the need for high-quality lubricants and, consequently, base oils. As a manufacturing hub, the Asia Pacific region witnesses substantial industrial expansion, further contributing to the escalating demand for base oils in machinery and equipment. Additionally, the region's growing emphasis on sustainability and adherence to stringent environmental regulations are expected to stimulate the adoption of advanced lubricants, influencing the composition of base oils. Strategic investments in research and development by key industry players further position the Asia Pacific region at the forefront of innovation, solidifying its dominance in the evolving landscape of the base oil market.
Based on the end-user industry, the global Base Oil market is segmented into Automotive Oils, Process Oils, Hydraulic Oils, Metalworking Fluids, Industrial Oils, and Others. Among these, Automotive Oils is dominating as a consumer, with a market share of more than 50% of the total demand in 2023.
Significant players in the Global Base Oil market are NOOC Limited, PetroCanada Lubricants Inc., Petroleum & Chemical Corp. (SINOPEC), PETRONAS Lubricants International, PT Pertamina (Persero), PetroChina Co., Ltd, Exxon Mobil Corporation, Abu Dhabi National Oil Company, Chevron Corporation, Shell plc, Indian Oil Corporation Ltd, BP p.l.c, Saudi Arabian Oil Co., Sepahan Oil, Bahrain Lube Base Oil Company, , SK Lubricants Co., Ltd., Bharat Petroleum Corporation Limited, GS Caltex Corporation, and Neste, and Others.
Years considered for this report:
Historical Period: 2015- 2022
Base Year: 2023
Estimated Year: 2024
Forecast Period: 2025-2032
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Objective of the Study:
• To assess the demand-supply scenario of Base Oil which covers production, demand and supply of Base Oil market in the globe.
• To analyse and forecast the market size of Base Oil
• To classify and forecast Global Base Oil market based on end-use and regional distribution.
• To examine competitive developments such as expansions, mergers & acquisitions, etc., of Base Oil market in the globe.
To extract data for Global Base Oil market, primary research surveys were conducted with Base Oil suppliers, distributors, wholesalers and Traders. While interviewing, the respondents were also inquired about their competitors. Through this technique, ChemAnalyst was able to include that could not be identified due to the limitations of secondary research. Moreover, ChemAnalyst analyzed various segments and projected a positive outlook for Global Base Oil market over the coming years.
ChemAnalyst calculated Base Oil demand in the globe by analyzing the historical data and demand forecast which was carried out considering the historical extraction and supply and demand of Base Oil across the globe. ChemAnalyst sourced these values from industry experts, and company representatives and externally validated through analyzing historical sales data of respective to arrive at the overall market size. Various secondary sources such as company websites, association reports, annual reports, etc., were also studied by ChemAnalyst.
Key Target Audience:
• Base Oil and other stakeholders
• Organizations, forums and alliances related to Base Oil distribution
• Government bodies such as regulating authorities and policy makers
• Market research organizations and consulting companies
The study is useful in providing answers to several critical questions that are important for industry stakeholders such as Base Oil customers and policy makers. The study would also help them to target the growing segments over the coming years (next two to five years), thereby aiding the stakeholders in taking investment decisions and facilitating their expansion.
Report Scope:
In this report, Global Base Oil s market has been segmented into following categories, in addition to the industry trends which have also been detailed below:
|
Attribute
|
Details
|
|
Market size Volume in 2023 |
47.7 million tonnes |
|
Market size Volume by 2034 |
78 million tonnes |
|
Growth Rate |
CAGR of 4.59% from 2024 to 2034 |
|
Base year |
2023 |
|
Estimated year |
2024 |
|
Historic Data |
2015 – 2023 |
|
Forecast period |
2025 – 2034 |
|
Quantitative units |
Demand in million tonnes and CAGR from 2024 to 2034 |
|
Report coverage |
Industry Market Size, Capacity By Company, Capacity by Location, Operating Efficiency, Production by Company, Demand by End- Use, Demand by Region, Demand by Sales Channel, Demand-Supply Gap, Company Share, Manufacturing Process. |
|
Segments covered |
By End-Use: (Automotive Oils, Process Oils, Hydraulic Oils, Metalworking Fluids, Industrial Oils, and Others)
By Sales Channel: (Direct Sale and Indirect Sale) |
|
Regional scope |
North America, Europe, Asia Pacific, Middle East and Africa, and South America. |
|
Pricing and purchase options |
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Q1.
What is the expected global market size of Base Oil in terms of volume for 2034?
Ans:
The global market size of Base Oil is expected to reach approximately 47.7 million tonnes by 2034, and it is expected to further expand with a CAGR of 4.59%.
Q2.
What are the major end-use industries of Base Oil?
Ans:
Base Oil is used in a wide range of end use industries including Automotive Oils, Process Oils, Hydraulic Oils, Metalworking Fluids, Industrial Oils, and Others.
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Ans:
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