Base Oil Market Expected To Reach $41.7 Billion by 2030

According to a new published report by Allied Market Research titled, “Base Oil Market by Type and Application: Global Opportunity Analysis and Industry Forecast, 2021–2030,” the global base oil market was valued at $34.9 billion in 2020, and is projected to reach $41.7 billion by 2030, growing at a CAGR of 1.8% from 2021 to 2030.

The demand for high-grade lubricant oils in the automotive industry and stringent environmental legislation leading to strict performance standards drive the growth of the market. However, fluctuating costs of crude oil and regulations concerning emission norms hamper the market growth in the. The global shift from group I base oils to group II & III  provide numerous growth opportunities to market players.

On the basis of type, the group I segment dominated the global base oil market in 2020, and is expected to maintain its dominance during the forecast period, as group I base oils are the cheapest base oils available in the market. Range of temperature for these base oils is from 30 to 150 degree Fahrenheit. In addition, these base oils are produced from a simple refining process, and thus are solvent-refined, which reduces the overall cost of these oils. Furthermore, the ongoing transition away from American Petroleum Institute (API) Group I base oils toward higher use of API group II and III base oils is driven by the need for reduced fuel consumption, increased durability, and lower emissions in passenger cars & heavy-duty vehicles. Automotive lubricants become lighter, particularly in passenger cars, with Japanese original equipment manufacturers (OEMs) forecasting the use of 0W-8 engine oils in the future.

On the basis of application, the automotive oil segment dominated the global base oil market in 2020, and is expected to maintain its dominance during the forecast period, owing to increase in demand for best quality base oils for automobiles across the globe.The major players operating in the global base oil market include Phillips 66 Company, Chevron Corporation, Exxon Mobil Corporation , Evonik Industries AG, Neste Oyj, PT Pertamina, S-OIL Corporation, Royal Dutch Shell Plc, AVISTA OIL AG, and Saudi Aramco.

Key Findings Of The Study

• Depending on type, the group I segment emerged as the global leader by acquiring more than 47.21% of the market share in 2020.
• According to application, the automotive oil segment emerged as the global leader by acquiring more than 45.27% of the market share in 2020.
• Region wise, Asia-Pacific is the major consumer of base oil among other regions. It accounted for around 43.58% of the global market share in 2020.

Impact Of Covid-19 On The Global Base Oil Market

• Transport limitations were implemented, resulting in reduced industrial production and disrupted supply chains, which affected global economic growth by a substantial proportion, severely impacting market growth due to COVID-19 pandemic.
• The COVID-19 outbreak has had a rapid and devastating impact on the global automotive sector. Chinese parts shipments are being disrupted, large-scale manufacturing disruptions are occurring across Europe, and assembly plants in the U. S. are collapsing. This puts a lot of pressure on automotive sector that is already dealing with a downturn in global demand, and it will almost certainly lead to additional merger and acquisition activity.
• Furthermore, due to social distancing norms during COVID-19, the manufacturing companies worked with limited workforce; thus, negatively impacting the production and automotive processes.