Conventionally, base oils are the lubricant grade oils which are produced through different processes such as crude oil refining and chemical synthesis. They are attained from secondary processing units of the refineries. The American Petroleum Institute developed a classification system, which segments the base oils in five key groups depending on the sulfur content, saturates percentage and the viscosity index.
Base oil finds wide application scope as automotive oils, process oils, hydraulic oils, metal working fluids, and industrial oils. The increasing demand for base oil can be attributed to its superior chemical properties such as increased viscosity index, improved oxidative stability, low sulfur content and high level of saturation.
Revolutionized automotive industry across the globe owing to expanding population base and rapid urbanization is expected to be one of the key driving factors for base oil over the next eight years. The automotive industry prefers the use of naphthenic oils as lubricants, greases or even as cutting fluids in case of metalworking activities.
Demand for finished lubricant products is being driven by stringent environmental regulations such as the Corporate Average Fuel Economy (CAFE) norms that have resulted in the need for exploring new ways to reduce fuel consumption.
Rising awareness regarding the inherent relation between mass and fuel economy is touted to result in an increased use of base oils in vehicles. The stringent environmental regulations in regions such as North America and Europe are anticipated to stimulate the demand for base oils as these regions are large automobile manufacturing centers.
Over the past two decades, the world has witnessed a renewed interest in bio based lubricants and base oils from vegetable sources. Environmental degradation and the subsequent rise in demand for alternative, sustainable products with lower carbon footprints is expected to increase demand for base oil.
A prime example of such mandates is the introduction of the Environmental Awareness Lubricants (EAL) for a line of hydraulic fluids by the ExxonMobil Corporation. Also, GTL technology has successfully been commercialized with existing & planned capacities increasing on a daily basis across the globe.
The technology is a highly promising one with significant market opportunities for the production of high-quality lube oils by building off from existing catalytic hydrocracking and isomerization processes.
In-depth report on global base oil market by Grand View Research: