Lubricants are mainly used in gearboxes, lubricants & transmission oils, and diesel engine oils, in various automotive applications including commercial vehicles, motorcycles, and passenger cars. The automotive industry is one of the largest consumers of base oils that are growing at a faster pace. These base oils have a huge influence on the gear oils, motor oils, engine oils, and other products used for blending them. In developed countries, this has encouraged oil producers to shift from group I to group II to group III base oils. Group II and group III base oils used in transmission fluids, gear oils, and other automobile lubricating systems are anticipated to drive the product demand in the automobile industry over the forecast period. Furthermore, the emergence of electric vehicles will drive the demand for low-viscosity lubricants that maximize vehicle efficiency.
The current economy is changing drastically, triggered by developing emerging markets. The rise in automation, digitization, sustainability policies, and other factors have revolutionized several industries, and the automobile industry is no exception. As per the above graph, commercial vehicles and passenger cars are the most important segments of the automobile industry accounting for the highest automotive sales globally. Also, growing vehicle production in emerging countries is expected to augment the growth of the global lubricants market, which will significantly propel the base oil demand over the forecast period.
Globally, lubricant producers are shifting toward high-performance base oils with tightening environmental regulations. Owing to the influence of sustainability standards, hydrodynamic friction and lowering the viscosity of the fluids in the base stock market is due to the. Additionally, providing an optimum balance between extended drain interval, hardware protection, and deposit control, oxidation performance in thinner SAE 0W-20 viscosity grades, is expected to drive the demand for high-quality base oils. For instance, earlier Japanese OEMs used base oil products with higher viscosities, however, the trend is shifting toward low-viscosity base oils.
As a result, lower viscosity grades, such as SAE 0W-X, SAE 5W-20, and SAE 5W-30, account for about 30% of the passenger car lubricant market, which is anticipated to propel the demand for high-performance base oils over the forecast period. With the growing trend of low-viscosity base stocks in other countries, concerns about volatility have increased both in commercial and passenger car formulations; this will ultimately drive the demand for higher-quality base stocks such as group III and PAO.
Crude oil is an integral component in the extraction of base oil, which is further, refined using various additives to obtain lubricants. A rise in crude oil prices reduces the profit margins of refineries. A rise in the price per unit of the finished product for the consumers affects their spending capacity and also the overall growth rate of an economy. Many shale gas exploration companies have become efficient in oil extraction and have devised new ways to keep wells running instead of capping them. At the same time, oil-producing companies in the Middle East are producing oil in large quantities to maintain their market share due to the low prices of feedstock.
The impact of crude oil price fluctuations is likely to be moderate from 2022 to 2028 and is expected to reduce further with the availability of alternative fuels, such as bio-based fuel, and reducing the dependency of industries on non-renewable energy sources. Stabilization in crude oil prices, however, will lead to the stabilization of synthetic lubricant prices over the coming years.
This section will provide insights into the contents included in this base oil market report and help gain clarity on the structure of the report to assist readers in navigating smoothly.
Market drivers and restraints
Key market opportunities prioritized
Latest strategic developments
Market size, estimates, and forecast from 2018 to 2030
Market estimates and forecast for product segments up to 2030
Regional market size and forecast for product segments up to 2030
Market estimates and forecast for application segments up to 2030
Regional market size and forecast for application segments up to 2030
Company financial performance
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