The global base oil market size is projected to reach USD 30.8 billion by 2027, expanding at a CAGR of 5.1%, according to a new report by Grand View Research, Inc. Rising demand for the product from the global automotive sector to formulate various oils is projected to remain the key factor driving industry growth.
Increasing demand for group II base oil among various end-use industries such as the automotive and industrial sectors is expected to drive market growth significantly over the forecast period. The rising popularity of base oils is majorly due to their high wear and tear resistance, improved thermal stability, low friction, and enhanced load carrying capacity. This is projected to increase product demand over the foreseeable future across the globe.
Research and development and production of new cutting-edge technologies such as ester-based fire-resistant oils are being commonly incorporated in a variety of industries and are used with hydraulic battery packs so as to sustain high pressures and temperatures. Additionally, numerous large-scale OEMs have implemented food lubrication NSF standards with the purpose of utilizing PAO food grade products in the food, beverage, and nutrition sectors. This, in turn, is expected to open new opportunities for the industry over the projected period.
Further, in terms of industry opportunity, over the past couple of decades, there has been a significant surge in interest towards bio-based lubricants and for base oils obtained particularly from vegetable sources. This is attributed to increasing awareness among global manufacturers and consumers towards environmental degradation which eventually led to a demand surge for sustainable alternative feasible products with reduced carbon footprints. Advanced economies of Asia Pacific and Europe have made it mandatory to replace conventional products with biodegradable counterparts.
Companies operational in the ecosystem has been constantly striving to adapt to the changing dynamics of the global market space, in-lining their products with formulated government policies and consumer preferences. For instance, ExxonMobil introduced Environmental Awareness Lubricants hydraulic fluids line. These innovations are likely to reflect the positive growth trend of the market over the forecast period.
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Group II base oil is expected to witness a CAGR of 1.6%, in terms of volume, from 2020 to 2027 due to steady growth in the lubricant industry
Industrial application accounted for a market share of 15.0% in 2019, in terms of revenue, owing to rising demand from emerging economies and growing automation in operations
Asia Pacific is expected to register the fastest growth rate of 5.5%, in terms of revenue from 2020 to 2027 owing to increasing industrial activities across key countries and rising investments in manufacturing facilities
Companies such as ExxonMobil Corporation, Royal Dutch Shell, and British Petroleum are the market leaders with their worldwide brand presence, catering to an array of industries such as automotive and industrial manufacturing
The market is concentrated with multinational brands presence globally with established long-term contracts with key end-user groups, thereby limiting the entry of new industry participants.
Grand View Research has segmented the base oil market on the basis of product, application, and region:
Base Oil Product Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)
Base Oil Application Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)
Base Oil Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)
Central & South America
Middle East & Africa
List of Key Players of Base Oil Market
Royal Dutch Shell
Sepahan Oil Company
Bahrain Lube Base Oil Co.
Indian Oil Corporation
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