Base Oil Market size was valued at USD 21.49 billion in 2023 and is anticipated to cross USD 42.05 billion by the end of 2036, expanding at more than 5.3% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of base oil is estimated at USD 22.4 billion.
The growth of the market can be attributed to the increasing demand for automobiles across the world, along with the improvement in engine technology of vehicles. The growing demand for high-grade lubricants and engine oils, along with the rising need for optimal fuel for extreme cold and hot conditions, is estimated to promote the market growth. Base oils are used to manufacture lubricants and motor oils, in which 70 to 90 percent base oils are mixed with 30 to 10 percent chemical additives. Growth of the end-user industries, such as, automotive and construction industries, is estimated to positively impact the growth of the market.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024–2036 |
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CAGR |
5.3% |
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Base Year Market Size (2023) |
USD 21.49 billion |
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Forecast Year Market Size (2036) |
USD 42.05 billion |
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Regional Scope |
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The global base oil market is segmented by type into group I, II, III, IV, and group V, out of which, the group II segment is anticipated to hold the largest share in the market during the forecast period owing to the commercial viability of group II base oils, as they are affordable with higher quality. The hydrocarbons of this group are saturated, which gives them better antioxidation properties, making them useful for older engines. On the basis of end-user industry, the automotive segment is anticipated to hold the largest share over the forecast period, on the back of the growing sale of automobiles, with more than 65 million cars sold in 2020, backed by the changing life style and higher disposable income of the middle class. The growing demand for engine oil for the increasing number of vehicles is estimated to drive the growth of the segment.
Our in-depth analysis of the global market includes the following segments:
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By Type |
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By Application |
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By End-User Industry |
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Regionally, the global base oil market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region. The market in Asia Pacific industry is predicted to hold largest revenue share by 2036, owing to increasing demand for lubricants amongst the manufacturers of automobile engines backed by growing automotive industry, and other industrial activities in the region. Furthermore, expansion of power generation, mining, and transportation activities in the region, is expected to boost the market growth. The market in the North America region is estimated to hold the leading share in the market throughout the forecast period, owing to the easy availability of crude oil, in countries, such as, Canada, along with the growing automotive industry in the region. Canada is the fourth largest producer and exporter of crude oil, with production of more than 4.5 million barrel per day in 2019.
Author Credits: Rajrani Baghel
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