Base Oil Market Size

Base Oil Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

The market for base oil is increasing, with an estimated value of $31.76 billion in 2024 and expected to rise to $46 billion by 2035. This growth rate of 3.27% over the period 2025-35 indicates the robust demand for base oil in various applications, including the automobile, industrial, and consumer products industries. The growing demand for high-performance lubricants, prompted by technological developments and stringent regulations, is driving the base oil market. Also contributing to this expansion is the development of synthetic and bio-based base oils. These base oils offer superior performance properties, which are becoming increasingly important in high-efficiency engines and machinery. ExxonMobil, Shell, and Chevron are investing heavily in research and development to enhance their product offerings and meet evolving customer demands. These companies are also forging strategic alliances to enhance their market positions.

Regional Market Size

Regional Deep Dive

The Base Oil Market is characterised by different regional dynamics, influenced by local demand, regulatory frameworks and economic conditions. In North America, the market is driven by the strong automotive industry and strict environmental regulations, which encourage the use of high-quality base oils. Europe is characterised by a strong emphasis on sustainability and innovation, with a growing trend towards bio-based and re-refined base oils. The Asia-Pacific region is characterised by rapid industrialisation and urbanisation, which leads to a high demand for lubricants and base oils. The Middle East and Africa (MEA) are characterised by significant oil production, while Latin America is gradually growing its share of the market, driven by economic recovery and improved infrastructure.

North America

• In the United States, the stricter regulations of the EPA, which have set stricter standards for emissions, have led to the development of base oils that are low in viscosity and high in performance.
• ExxonMobil and Chevron are putting into advanced refining technology to produce base oils of groups II and III, which are becoming increasingly preferred for their superior performance characteristics.
• The rise of electric cars has an impact on the base oil market. Lubricants that are specially adapted to the special needs of electric cars are being developed, which will reshape the product range.

Europe

• The Green Deal of the European Union, which aims at a shift towards sustainable products, has increased investment in the bio-based and regenerated fractions of lubricants, and Total Energy is a leader in this field.
• This process is carried out by companies like BASF, which is striving to improve the performance and the footprint of its products.
• Moreover, the reformulations of products, resulting from the REACH regulations, are causing considerable problems in the supply chain and in the development of new products.

Asia-Pacific

• With the rapid development of China's industry, the demand for base oil is increasing rapidly, and the local oil companies have to expand their production capacity.
• The development of high-performance lubricants has been accelerated in the region. The synthetic base oils developed by SK Lubricants have improved the fuel efficiency of the engine.
• Government initiatives in countries such as India are promoting the use of lubricants which are friendly to the environment. This is expected to drive the development of bio-based and recycled base oils in the market.

MEA

• The Gulf Cooperation Council is investing heavily in refining capacity, and companies such as Aramco are increasing their production of base oil, both for the local market and for export.
• The country’s special position as a major oil producer enables it to compete in the market for base oils. This is attracting foreign investments and joint ventures in this industry.
• The regulatory framework is evolving, and initiatives aimed at improving sustainability and reducing the environmental impact of production and consumption are influencing the nature of the base oils that are produced and consumed.

Latin America

• The recovery of the Brazilian economy is reflected in a growing demand for motor oils, which is influencing the base-oil market. Petrobras is increasing its capacity.
• In the Middle East, the use of synthetic and semi-synthetic base oils is on the increase, driven by the need for high performance lubricants and the desire to satisfy changing consumer preferences.
• The government’s programmes for the development of the country’s roads and railways will no doubt stimulate the industrial sector and increase the demand for base oils.

Did You Know?

“Groups II and III base oils have been used for a long time in industry, but the demand for them is increasing as their performance and low environmental impact is better than that of group I.” — Global Base Oil Market Report, 2023

Segmental Market Size

The base-oil industry is an important part of the lubricant industry and is experiencing a high level of growth. The high-quality lubricants used in the motor car and industry are in great demand. This is being pushed forward by the growing need for energy-saving and for reducing exhaust gases. The quality and performance of the base oils is being further improved by the technological developments in the refining industry.

The use of high-quality base oils has reached a high degree of development. ExxonMobil and Chevron are the leading companies in this field. Their products are used mainly in motor oils, lubricating oils and hydraulic fluids, where high-quality base oils are indispensable for proper operation. Besides, the trend towards more sustainable lubricants is a driving force, as consumers and industry are looking for more sustainable solutions. These are being achieved through hydrocracking and solvent extraction, which are being developed to meet the changing needs of various industries.

Future Outlook

Base oil market is expected to grow steadily from 2024 to 2035, with a CAGR of 3.27% from 2017 to 2035. This growth is mainly driven by increasing demand from end-use industries, including the automotive, industrial, and consumer goods industries. The need for high-quality lubricants and base oils will continue to drive the market penetration, especially in emerging economies where industrialization and automobile production are growing.

The main technological developments and regulatory policies are expected to significantly influence the base oil market. The shift towards synthetic and bio-based base oils, which is being driven by growing concern for the environment and increasingly strict emissions regulations, will further boost the product range and the market's competitiveness. In addition, the growing popularity of electric vehicles (EVs) and the consequent demand for specialized lubricants will further shape the market. Also, trends such as the circular economy and the sustainable development of products will play a crucial role in the industry, as manufacturers strive to reduce their carbon footprint and attract the interest of environmentally conscious consumers and companies.