Global Liquid Lubricants Market Size (2024 - 2030)

In the year 2023, the Global Liquid Lubricants Market attained a valuation of $55 billion and is estimated to achieve a market size of $77.39 billion by the year 2030. The market is anticipated to experience a Compound Annual Growth Rate (CAGR) of 5% during the forecast period spanning from 2024 to 2030.

Industry Overview:

The application of liquid lubricants serves the purpose of minimizing friction between two moving surfaces, consequently reducing wear and tear. Typically, these lubricants comprise a base oil content of around 90% alongside additives constituting less than 10%. Base oils are commonly derived from synthetic or vegetable sources such as esters, fluorocarbons, silicones, hydrogenated polyolefins, and silicone esters. Categorized primarily into mineral, synthetic, and bio-based variants, lubricants serve diverse industries such as automotive, shipping, forestry, agriculture, and railways due to their distinctive mechanical, chemical, and environmentally friendly attributes. The automotive industry, driven by increased trade in automobiles and related components, is expected to witness a surge in demand for automotive oils and greases. Lubricants, employed primarily as diesel engine oils, transmission fluids, and gearbox lubricants, play a pivotal role in segments including passenger automobiles, commercial vehicles, and motorcycles. The substantial rise in global vehicle sales, spurred by the industrialization expansion and automation across various sectors, is largely attributed to nations such as the United States, China, Brazil, and India. The availability of skilled labor, technological expertise, and foreign investments further propels the manufacturing sector's growth in emerging economies. Many manufacturers have established formal agreements with raw material suppliers and producers, strategically ensuring streamlined acquisition processes to minimize time and cost inefficiencies. Industry giants such as Royal Dutch Shell, Chevron, Total SA, British Petroleum, ExxonMobil Corporation, and Sinopec have globally integrated their operations, ensuring a consistent supply of raw materials for the production of essential mineral oils and additives. The market is characterized by a notable influx of new entrants seeking to capitalize on promising opportunities within the global landscape, while established players forge strategic alliances to enhance capabilities and expand into emerging markets.

COVID-19 Pandemic Impact on Liquid Lubricants Market

The lubricants industry faced formidable challenges owing to the repercussions of the COVID-19 pandemic on industrial and transportation sectors. Major economies worldwide witnessed a slowdown in business operations across lubricant-reliant machinery and equipment sectors. Notably, the automotive supply chain was significantly disrupted as manufacturing and sales of automobiles came to a halt across several regions. This resulted in a substantial reduction in vehicle production globally, with estimates from OICA indicating a 23% decline in automotive manufacturing during the first nine months of 2020 compared to the same period in 2019. Consequently, the demand for lubricants experienced a considerable downturn. Lockdown measures severely impacted the transportation industry, leading to minimal movement of commercial and passenger vehicles, and the grounding of airplanes worldwide. However, as industrial and transportation operations gradually resume and return to full capacity, the market is poised for a resurgence.

MARKET DRIVERS:

The liquid lubricant industry is witnessing evolution and expansion, driven by the escalating demand for automobiles and advancements in high-performance engines.

The surge in demand for automobiles directly corresponds to an increased need for liquid lubricants. Since the inception of the first mass-produced automobile by Ford at the turn of the 20th century, internal combustion engines have undergone significant advancements. Modern engines endure heightened tension and temperatures, operating at exceptionally high RPMs and requiring superior quality engine oil. Additionally, advancements in the internal transmission systems enable cars to achieve speeds up to 150 mph, necessitating improved lubricants to support such developments.

The market for liquid lubricants is poised to benefit from the growing demand for renewable energy.

The power sector extensively employs industrial lubricants such as transformer oil and turbine oil. The burgeoning renewable energy sector presents a promising subsegment within the power generation market. While wind energy currently constitutes a modest portion of the total energy mix, the sector is witnessing expansion. Lubricants play a crucial role in ensuring optimal operation of wind turbines, thus contributing to the market growth.

The liquid lubricants market is expected to expand with the adoption of bio-based lubricants.

There is a noticeable shift towards bio-based lubricants due to their lower emissions compared to conventional synthetic lubricants. Regulatory constraints on mineral lubricants, which have adverse environmental impacts, are driving the preference for bio-based alternatives. Governments worldwide are promoting the development and utilization of bio-lubricants to meet environmental regulations, reduce greenhouse gas emissions, and conserve energy. Legislations and policies supporting bio-lubricants are prevalent in European and North American nations.

MARKET RESTRAINTS:

The growth trajectory of the liquid lubricants market may face hindrances from the escalating battery price parity and the rising popularity of hybrid vehicles.

The growing adoption of hybrid electric vehicles (HEVs) poses a challenge for lubricant market participants. HEVs, equipped with both an internal combustion engine (ICE) and an electric motor, enhance power efficiency and reduce pollution by shutting off the ICE when the electrical system's output surpasses the vehicle's propulsion needs. Consequently, the internal combustion engine runs for shorter durations, leading to reduced lubricant or engine oil consumption. Lubricant manufacturers are confronted with this challenge, especially as governments in regions like Europe and nations such as India incentivize HEV adoption. The increasing popularity of HEVs, coupled with rising battery parity, is anticipated to impact the size of the global lubricants market.

Crude oil price volatility and growing environmental concerns pose significant hurdles to the expansion of the liquid lubricants market.

The fluctuating prices of mineral oil and the higher costs associated with bio-based and synthetic lubricants present challenges for the market. Lubricating oils, when dispersed into the air as oil mist and small droplets, pose substantial environmental risks. Mineral oils, in particular, exhibit negligible biodegradability, while petroleum-derived oils accumulate in groundwater and various ecosystems. Aquatic environments are particularly vulnerable to lubricating oils derived from crude oil, highlighting environmental concerns associated with these products.

Liquid Lubricants Market – By Base Oil

Mineral Oil

Synthetic Oil

Bio-based Oil

The Liquid Lubricants Market, categorized by its Base Oil, includes Mineral Oil, Synthetic Oil, and Bio-Based Oil. Mineral oil stands as the predominant segment within the global lubricants market due to its wide availability and cost-effectiveness. Forecasts suggest that the synthetic oil sector will experience the highest Compound Annual Growth Rate (CAGR) during the projected period, attributed to its superior characteristics. Unlike mineral oils, synthetic oils can be engineered to deliver enhanced physical properties such as biodegradability, high-temperature performance, and oxidation stability. Responding to market trends, lubricant industry entities are increasingly producing bio-based lubricants. Derived from plant or animal oils, bio-based lubricants are both biodegradable and renewable. The expansion of bio-based lubricants is expected to outpace mineral oils due to their eco-friendly nature. Throughout the assessment period, these lubricants are poised for significant revenue growth, bolstered by governmental support advocating for the use of bio-based lubricants. Manufacturers are now prioritizing factors like thermal and oxidative stability in the development of novel lubricant solutions.

Liquid Lubricants Market – By Product

• Engine Oil
• Gear Oil
• Hydraulic Fluid
• Metalworking Fluid
• Grease
• Compressor Oil
• Turbine Oil
• Others

Within the Liquid Lubricants Market, segmented by Product, there are categories such as Engine Oil, Gear Oil, Hydraulic Fluid, Metalworking Fluid, Grease, Compressor Oil, Turbine Oil, and Others. It is expected that the engine oil segment will dominate the global lubricant market during the forecast period, followed closely by hydraulic fluid. Engine oil's prevalence is primarily attributed to its extensive use in the transportation sector, particularly in construction trucks. Hydraulic oil, a non-compressible fluid, is utilized to transmit power within hydraulic machinery and equipment. This fluid, also known as hydraulic fluid, can be formulated from either mineral or synthetic materials. While synthetic hydraulic oils are produced using chemically derived base fluids, mineral-based hydraulic oils are derived from crude oil fractions.

Liquid Lubricants Market – By End User

• Transportation
• Commercial Vehicles
• Passenger Vehicles
• Aviation
• Railways
• Marine
• Industrial
• Construction
• Mining & Metal
• Cement Production
• Power Generation
• Automobile Manufacturing
• Chemical
• Oil & Gas
• Textile
• Food Processing
• Others

Categorized by End User, the Liquid Lubricants Market is divided into Transportation and Industrial sectors. There is a notable demand for lubricants within the transportation sector, driven by the increasing number of vehicles on the road in China, as well as the rising transportation needs in India and ASEAN countries. In terms of volume, the automobile industry held a significant market share of over 57% in 2021, attributed to the increasing sales of consumer automobiles such as passenger trucks, buses, and other modes of transportation. Economic growth in developing nations such as China, India, and Brazil has also bolstered public transportation, further contributing to the segment's expansion through increased demand for commercial automotive oil.

To ensure optimal performance in high vacuum and extreme temperatures, aerospace lubricants are utilized to provide reliable, long-lasting lubrication. These lubricants are subject to rigorous testing to meet increasing regulatory requirements and stringent military standards. Over the forecast period, the main drivers of category growth are anticipated to be the continuous rise in air passenger traffic and significant increases in defense spending. Notably, the aerospace industry is experiencing rapid growth, particularly in countries like the United States, Germany, Brazil, and India, where defense spending has seen substantial increases.

Marine lubricants are frequently used in both high- and medium-speed engine oils, as well as slow-speed marine engines. These products are designed to extend engine life and protect components in hot environments. Certain marine lubricants utilize additive technology to provide protection against ring belts, under-crowns, crankcases, and other critical areas of the engine. Additionally, lubricants used in slow-speed cylinders offer high-performance lubrication, improved protection against mechanical wear, and assistance in mitigating cold corrosion.

Liquid Lubricants Market - By Region:

• North America
• Europe
• Asia-Pacific
• Rest of the World

In terms of geography, the North American Liquid Lubricants Market held a substantial revenue share in the global market in 2021. Following China, North America boasts the second-largest automobile market globally. However, the North American auto industry's growth is hindered by economic factors, which has limited the expansion of the consumer automotive lubricants market in the region. Volatility in base stock pricing is one significant factor negatively affecting revenue growth in the North American lubricants industry.

Europe is expected to hold the second-largest market share, both in terms of volume and value, within the global lubricants industry during the forecast period. The liquid lubricants market in Europe is considered mature and approaching saturation. However, significant growth opportunities exist for industrial lubricant products due to the region's expanding chemical manufacturing facilities. The rapid growth is largely attributed to the involvement of numerous multinational chemical producers from countries such as Russia, the U.K., France, and Germany. Widely used in various processes, including the production of fertilizers, rotary and compressor units in manufacturing facilities, and more, these industrial lubricants aid in enhancing the performance of machinery subjected to high stress.

The Asia Pacific region is projected to dominate the global lubricants market during the forecast period, owing to several factors such as the rapid growth in base oil movements, industrialization, urbanization, population growth, and the expansion of key end-use industries including chemicals, textiles, food processing, and metalworking. This market presents numerous lucrative opportunities for companies focusing on niche markets and introducing innovative products with beneficial features. Major industrial players are also relocating their manufacturing operations to the Asia Pacific region due to factors such as affordable labor, increasing demand, and supportive governmental regulations.

Many countries in the Middle East and Africa (MEA) heavily rely on crude oil production and subsequent revenues from the liquid lubricants sector. To reduce their dependence on crude oil, several countries in this region are diversifying their economies, which has led to increased industrial growth and demand for industrial machinery, thereby driving market growth. In Latin America, various trade tactics are anticipated to be implemented to attract Foreign Direct Investment (FDI) for infrastructure development. Brasil Terminal Portuario, one of the busiest container ports in Latin America, is planning numerous terminal expansion projects in locations such as Moin, Costa Rica, Mexico, and Peru. Consequently, the marine sector in the region is expected to witness heightened product demand.

Major Key Players in the Market

1. ExxonMobil Corp.
2. Pennzoil
3. PetroChina Company Limited
4. Quaker Chemical Corp.
5. Royal Dutch Shell Co.
6. JX Nippon Oil & Energy Corp.
7. British Petroleum
8. LUKOIL
9. Total S.A.
10. Chevron Corp.
11. Phillips 66 Company
12. Fuchs Petrolub AG
13. Sinopec Corp.

Royal Dutch Shell stands out as one of the leading manufacturers of lubricants, with an expansion-focused growth strategy. In the lubricants market, ExxonMobil holds the second position, offering turbine oil alongside other lubricants such as hydraulic fluid, compressor oil, metalworking fluid, and gear oil. The company's efforts are concentrated on new product launches and partnerships to maintain its position as a market leader in the lubricants sector.

The global market for liquid lubricants is highly competitive, featuring numerous independent, well-diversified regional small- and large-scale manufacturers and suppliers. Small businesses compete primarily on pricing, after-sales services, and delivery schedules, while large-scale enterprises focus on marketing strategies, product development, and innovation. In response to market dynamics, many companies are reevaluating their supply chains to reduce costs and mitigate consumer delays.

Recent Developments in the Global Liquid Lubricants Market:

• Acquisition - In February 2021, The FUCHS Group announced the acquisition of 70% of the lubricant business of Vietnam-based specialized distributor STD & S Co. Ltd.
• Partnership - In February 2021, The OTK Kart Group and ENI SpA partnered to develop lubricants for Vortex engines, the engine division of the OTK Group.
• Acquisition - In April 2021, IMM Private Equity and SK Innovation agreed to a value of 1.09 trillion South Korean won for SK Innovation's 40% ownership in SK Lubricants (approximately 983 million USD).