The global base oil market is highly fragmented due to the presence of innumerable small as well as large-scale companies, observes Transparency Market Research based on a newly published report. Major industries participants in the global base oil market are Royal Dutch Shell Plc, Nynas AB, Russian Rosneft, BP, and China Petrochemical Corporation, among others. Among these, Russian Rosneft and BP that are likely to get into a tie-up to create a new joint Venture Company.
According to the research report by Transparency Market Research, the global base oil market was valued at US$33.2 bnin 2017 and is projected to expand at a CAGR of 1.7% from 2018 to 2026. Based on type, the market is segmented into Group II and Group III. Growing adoption of these segments has increased ground transportation, aviation, and commercial road transportation. This is anticipated to support growth of the global base oil market over the next eight years. Region-wise, consumption of base oil in Asia-Pacific is expected to increase, owing to growth in industrial development, demand from the automotive industry, and stable economic growth.
Less Polluting Automobiles is Boosting the Market
Base oils are a major constituent of any lubricant, which meets certain criteria such as viscosity, oxidation, pour point, seal compatibility, additive solubility, and thermal stability. The global base oil market is witnessing an uptick in demand owing to the stringent environmental regulations. Moreover, preference for finished lubricants, especially from the automobile industry is also growing. Automotive lubricants such as suspension oil and many more are driving the global base oil market. These automotive lubricants are becoming critically important to ensure smoother functioning and less polluting automobiles. Development in automotive business will raised requirement for finished lubricants. Fast industrialization in rising economies drives the requirement for lubricants with different end user segmentation.
The liquid’s viscosity at various temperatures is one of the most essential factors of the global base oil market. Raw petroleum or crude oil is fitting to make base oil. Moreover, to identify it, the base oil molecules are tested to see just how effectively these can be separated.
Extraction of base oil is done by refining crude oil. For this, crude oil is heated to separate various distillate from one another. During the heating process, light and heavy hydrocarbons are separated. The light ones are further refined to make petrol and other fuels, while the heavier ones are suitable for bitumen and base oils.
Increasing Demand for Electric Vehicles Challenges Base Oil Market
Reducing crude oil values affects the base oil revenues that hamper the global base oil market. Moreover gradual move to weight and sour crude oil through refiners will harmfully forces base oil production. In addition, increasing demand and government subsidies in the European and Asian markets for electric vehicles are expected to hamper the demand for base oil in the end. Furthermore, the recent slump in crude oil prices has negatively affected the base oil market.
Nonetheless, the global shift from Group I base oils to Group II & III present numerous growth opportunities to market players.
This review is based on Transparency Market Research’s report, titled “Base Oil Market” based on (Group – Group I, Group II, Group III, Group IV, Group V, Napthemic, Re-refined; Application – Automotive Fluids, Process Oils, Industrial Oils, Metalworking Fluids, Hydraulic Oil, Rust Prevention Oils, Greases, and Marine Lubricants) – Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2018 – 2026“.
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