Lubricants are materials used to reduce friction between two surfaces of equipment or components. They are usually in oil, semi-fluid, or solid state. Superior-quality lubricants have high thermal stability, high boiling point, low freezing point, and high viscosity index, which effectively help to reduce the friction between machine parts for increased operational efficiency.
Several types of lubricants are available in the market, including engine oils, process oils, hydraulic fluids, turbine oils, tractor fluids, gear oils, and metal working fluids among others. Lubricants are classified into mineral oil-based, synthetic, semi-synthetic and bio-based lubricants.
The global lubricants market is expected to grow steadily over the forecast period because of increased demand for lubricants worldwide. In 2019, the market was led by the APAC region, with market revenue share of 45% followed by North America and Europe.
The Lubricants Market is expected to grow with a CAGR of 2.70% percent during the forecast period and likely to reach USD 176.64 billion in 2027, from its recorded value of USD 152.37 billion in 2019.
Lubricants are in great demand in the automotive and transportation industry. Automotive and transportation segment held the highest market revenue share of 41% in 2019. Lubricants smoothen the movement of moving parts in a vehicle by reducing friction, thus enhancing the performance and longevity of a vehicle. The steady growth in the automotive and transportation industry has directly increased the demand for lubricants, contributing to the growth of the market.
However, the growth of the global lubricants market is curtailed by some major growth inhibitors. Negative impact of lubricants on the environment is one such growth inhibitor. Mineral oil-based lubricants contain toxic elements that take a long time to decompose. These lubricants are harmful to plants and wildlife ecosystems.
The increase in the price of lubricants is another challenge faced by the market. However, the global lubricants market holds potential to grow in the near future, mainly because of some trends that are expected to exert a positive influence on the market during the forecast period. Moreover, BRIC countries (Brazil, Russia, India, and China) are expected to be lucrative markets for lubricants during the forecast period. According to the World Bank estimates, approximately 41% of the world’s population is in the BRIC countries, and this population is expected to increase further.
To meet the demands of the huge population, governments in these countries are highly focused on industrial development. With the strengthening of financial infrastructure in these countries, foreign and domestic investments are expected to increase exponentially in the next five years. This will boost all the associated sectors, thereby driving the growth of related industries, such as base oil and lubricants, as well. One of the major trends is the development of environmentally friendly lubricants. Biobased lubricants leave minimal trace in the environment, thus preventing toxicity and bioaccumulation. Increase in R&D investment is another trend emerging in the market.
Bio-based lubricants are environment-friendly and do not have any toxic effect on the ecosystem. Bio-based lubricants are increasingly adopted to reduce harmful environmental effects which is the current trend in the lubricants market and is boosting the overall growth of the market. Various R&D projects have been completed to improve the physicochemical properties of bio-based lubricants. These studies have found that bio-lubricants can be used as substitutes to petroleum-based oils are projected to act as an opportunity for the market in future.
The principal application includes chainsaw bars, two-stroke engines, railroad flanges, and dust suppressants among others. Vegetable oil is the dominant raw material type for bio-based lubricants. With increasing demand for vegetable oils, their production is also on the rise, which drives the bio-based lubricants segment. For example, the annual production of vegetable oil increased from 55 million metric tons (MMT) in 1980 to 100 MMT by 2000 across the globe. It is projected to reach 200 MMT by 2020.
The North America lubricants market which was valued at USD 26.77 Bn in 2019 is anticipated to reach USD 31.01 Bn by 2027, growing at a CAGR of 2.63%. The United States accounted for the largest market share of about 81% of the total North America lubricants market. In 2019, The United States amounted 6,040 thousand tons of lubricants, Canada with 643 thousand tons and Mexico with 802 tons of volume of lubricants.
North America is home to the “big three” automobile manufacturers namely General Motors, Ford Motor Company and Fiat Chrysler Automobiles. The presence of these companies in the region along with growing technological innovations in the field of automobiles shall act as a major driving factor during the forecast period. Furthermore, the shale gas exploration projects are likely to propel lubricants market size growth during the review period.
As market conditions are improving significantly amid rising oil prices, coupled with the support of a new and favorable administration with pro-energy policies that understand the strategic importance of a healthy oil and gas industry, the exploration and production activities are expected to further increase in the United States.
The shale revolution in the North American region has led to an unparalleled growth in oil and gas production. Technological advancements in drilling and fracking technologies have unlocked vast reserves of gas and oil trapped in shale rock, and redrawn the energy landscape of the region
The International Energy Agency (IEA) expects a further increase in oil and gas production, with the United States emerging as a net oil exporter by 2027, the first time since 1953. At every stage, from oil exploration and production to its transportation, storage, and processing, the industry faces critical issues and operates at extreme temperatures.
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