Theautomobile industry remains the key driving force for the growth and profit ofthe base oil market across the globe. Base oils are sold and chosen on thegrounds of oxidation, pour point, seal compatibility, additive solubility, andthe thermal stability of the solvent. Based on this, base oils have beencategorized as Group I, Group II, Group III, Group IV, and Group V base oils.Group I and Group II base oils are most extensively transported through trucks,planes, and cargos across the world and are predicted to increase the holistic base oil market over thecoming decade.
By the year 2030, Group 2 base oils that have a viscosity index of 80-120, a 0.3% sulfur content and that are widely used in cars and engines of all types will experience a 39% surge in growth, slowly replacing Group 1 base oil categories.
What Are Base Oils And What Are Its Applications
Base oil is extracted after refining and distilling crude oil. Crude oil is heated at various temperatures to extract specific base oils possessing unique chemical properties with respect to the size of the hydrocarbons and its applications. The distillates with the lightest and the smallest particles become petrol while the distillates with comparatively heavier particles are used as bitumen and base oil.
Base oils find application in the manufacturing of lubricants, greases, motor oils, and metal processing fluids in different amounts and composition of the solvent. The liquid is carefully studied for its viscosity, temperature, and chemical composition to make sure it is compatible with the solvent in terms of volatility, and long shelf-life. Since base oil can be re-refined after use, it possesses a significantly lower carbon footprint, making it a greener and more sustainable market choice among industrialists. Stringent environmental regulations such as Corporate Average Fuel Economy (CAFE) on crude oil and its premium distillates have resulted in the shift to base oil in developed regions like North America and Europe.
Group-Wise Preferences of Base Oil Across Industries
Among types, Group 1 base oil finds maximum usage across the globe (over half of the global base oil market) for its simplistic refining process that is cost and time effective. However, this trend is foreseeing change with Group 2 and Group 3 base oils replacing this choice as the latter offers better performance and longevity at the same price. The Group IV segment of the global base oil market is projected to grow at the highest CAGR during the forecast period. The usage of Group IV base oils has been growing in various industrial and automotive applications as it offers excellent performance when combined with additives.
Asia Pacific is predicted to lead the global base oil markets till the year 2020 as emerging economies like India and China are spear-heading the industrial innovations at the micro and macroeconomic level.