The base oil market is projected to register a CAGR of around 4.71% to reach USD 39,683.45 million by 2028.
Base oil forms the primary constituent of any lubricant or grease used worldwide. However, some base oils are derived from vegetable oils and artificial synthetic oil sources.
According to various studies, more than 70% of all lubricant requirements annually are met with the use of mineral oil-based fluids. The lower cost has been the primary factor responsible for the demand for mineral-based lubricants worldwide. However, using these lubricants is beset with the problems of oxidation and acid development and facilitates the formation of sludge, particularly in high-temperature applications. As a result, synthetic oil-based lubricates such as PAO (Polyalphaolefin) gradually replace mineral oil-based lubricants.
PAO (Polyalphaolefin) -based lubricants are used extensively in automotive applications and hydraulic, gear, and bearing oils, working in extremely cold or hot climates. They are also employed in the form of base fluids in some wide temperature range greases.
The global Base oil market has been divided into Group I, Group II, Group III, Group IV, and Group V. Moreover, the Group II base oil segment is expected to grow fastest over the forecast period. Changes in automotive engine designs demand more versatile lubrication systems. Additionally, adopting strict emission control norms such as Bharat Stage IV (BS-IV) in India and China 6 in China is expected to fuel the demand for Group II base oils due to their versatility and superior performance attributes. The Group IV base oil segment is projected to grow significantly due to the growing adoption of synthetic oil in the automotive industry.
The global base oil market has been segmented into engine oils, gear oils, metalworking fluids, general industrial oils, greases, process oils, and others. The other applications of the base oils include agriculture, additives, and detergents/dispersants. Engine oil plays a crucial role in protecting overall engine assembly by reducing friction and protecting against corrosion. The growing focus on energy efficiency and downtimes has been driving the demand for engine oils and driving the growth of the global base oils market.
Key players operating in the global base oil market include GS Caltex Corporation (U.S.), Petroliam Nasional Berhad (PETRONAS) (Malaysia), Chevron Corporation (U.S.), Exxon Mobil Corporation (U.S.), Saudi Aramco (Saudi Arabia), Royal Dutch Shell plc (The Netherlands), Sinopec Corp (China), Petrochina Company Limited China), Abu Dhabi National Oil Company (ADNOC) (UAE), ENEOS Corporation (Japan), Hindustan Petroleum Corporation Limited (India), Repsol S.A. (Spain), Rosneft (Russia), China National Offshore Oil Corporation (China), and Eni S.p.A. (Italy).
The global base oils prices market has been studied across North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. With over 60% share, Asia-Pacific emerged as the largest market for base oil in 2020 and is expected to grow at the fastest pace over the forecast period. The automotive sector is the principal factor driving the regional base oil market. Key countries in the region, including India, China, and Indonesia, have emerged as the fastest-growing markets for passenger cars and commercial vehicles globally. Additionally, the largescale metalworking industry and capital goods manufacturing sector is generating significant demand for metalworking fluids and thereby the demand for base oil.
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