Process Oil Market by Type (Aromatic, Paraffinic, Naphthenic, Non-carcinogenic), Function (Extender Oil, Plasticizer, Solvent, Defoamer), Production Technology (Convention Route, Gas to Liquid, Bio-based), Application, and Region-Global Forecast to 2029
Process Oil Market
The global process oil market is valued at USD 5.2 billion in 2024 and is projected to reach USD 5.6 billion by 2029, growing at 1.7% cagr from 2024 to 2029. Use of process oil in agriculture is driving the growth in process oil market. The growth of the process oil market is primarily driven by the rising demand for process oil in tire and rubber applications. This surge in demand is fueled by the expanding automotive industry and the increasing production of rubber-based products. Additionally, other sectors such as manufacturing and textiles also contribute to this market expansion, highlighting the versatile applications of process oils across various industries.
Attractive Opportunities in the Process Oil Market
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Process Oil Market Dynamics:
Driver: Growing tire manufacturing industry
Efforts are being made across the globe to reduce carbon emissions from vehicles and enhance their fuel efficiency by reducing their weight. This has led the global tire industry to adopt the latest tire manufacturing processes to cater to the changing requirements of the automotive industry and meet the demands of Original Equipment Manufacturers (OEMs) in the automotive industry. The latest trends in the tire industry include fine tolerances in the tire manufacturing process, use of radial tires to reduce fuel consumption of vehicles, low rolling resistance tires, and focus on improving traction and road performance of tires to increase the fuel efficiency of vehicles. Process oils are among the key ingredients used in tire manufacturing. These oils provide the required elasticity and strength to tires and ensure a correct balance between their viscosity and elasticity. Process oils also provide the required grip to tires on roads, thereby enabling the safety and stability of vehicles.
Global tire consumption is directly dependent on the growth of the automotive industry. The production of vehicles directly affects the demand for tires globally. The condition and replacement cycles of vehicles, along with the development of disruptive technologies in the automotive industry, are the major factors expected to impact the demand for tire replacement services, thereby influencing the growth of the tire replacement market. The tire manufacturing industry is witnessing significant growth globally, driven by a combination of factors. Rising demand for automobiles, particularly electric, is a major driver of this growth. The global automobile market is expanding rapidly, with increasing sales of passenger and commercial vehicles. This surge in demand is fueled by factors such as urbanization, economic growth, and the rise of e-commerce. Thus, the growth of the global automotive industry is expected to drive the process oil market during the forecast period.
Restraints: European Union directive 2005/69/EC banning use of polycyclic aromatic hydrocarbons in tire manufacturing
Aromatic process oils are among the most consumed oils across the globe and are widely used in the rubber industry. According to the European Union directive 2005/69/EC, highly aromatic oil derivatives have been banned from use in tire manufacturing due to their harmful nature.
Polycyclic Aromatic Hydrocarbons (PAH) and polycyclic aromatics are organic compounds made of carbon and hydrogen and contain multiple aromatic rings. Aromatic process oils such as DAE contain high quantities of PAH. These oils are widely used in the manufacturing of tires and tubes as they offer improved rubber and polymer solvency. However, process oils containing significant quantities of PAH are considered carcinogenic. Therefore, in 2005, the European Union initiated a directive that banned the use of aromatic oils in rubber manufacturing, tire manufacturing, and polymer manufacturing applications. The implementation of this directive is expected to restrain the growth of the process oil market across the globe. The European Union Directive 2005/43/EC Article 3 (2) is a regulation that came into effect on January 01, 2010, and classified DAE as carcinogenic (labeled). According to the IP346 standard of this regulation, the PCA content in DAE process oils should be in the range of 20–30%.
The implementation of this directive has resulted in the development and introduction of new tires and rubber products that are free from potential carcinogenic aromatic oils.
Opportunity: Increasing demand for green process oils
Consumers across different end-use industries such as food & beverages, cosmetics, textile, and others prefer green oils over aromatic oils. This is due to the stringent regulations being implemented by various countries across the globe pertaining to the use of aromatic oils. For instance, several tire manufacturing companies are focusing on the development of green tires, which offer improved performance and are sustainable. These tires also ensure the safety of vehicles. Bridgestone, Continental, and Goodyear, among others, are the major manufacturers of green tires.
TDAE process oils are green process oils with high aromatic content. These oils are non-toxic, non-carcinogenic, and environmentally friendly. TDAE process oils can be used as substitutes for existing aromatic oils. The high Viscosity-Gravity Constant (VGC) of these oils leads to a reduction in the heat buildup in tires and eliminates their rotational resistance. All these factors are expected to lead to increased consumption of TDAE process oils to produce high-quality tires and rubbers across the globe. Companies such as ORGKHIM Biochemical Holding has launched its green process oil having very low carcinogen content and can be used as softener and extender (plastisizer) for synthetic rubbers, tires and rubber goods. Thus, green process oil can significantly drive the market for process oil.
Challenge: Fluctuating prices of crude oil
Process oils are extracted by refining crude oil through the distillation process. Light distillates of crude oil are refined to manufacture products such as gasoline and diesel, while heavy distillates are used to manufacture base oils and process oils. Thus, fluctuations in the price of crude oil impact the profit margin of the companies that are in the production of process oil. Stiff competition in the process oil market and the fluctuating prices of crude oil have resulted in low margins for their producers and distributors.
Process Oil Market: Ecosystem
Prominent companies in this market include well-established, and financially stable manufacturers of process oil market. These companies have been operating in the market for several years and possess a diversified product portfolio and strong global sales and marketing networks. Prominent companies in this market include ExxonMobil (US), Shell (UK), TotalEnergies (France), Idemitsu Kosan Co., Ltd. (Japan), and Petroliam Nasional Berhad (PETRONAS) (Malaysia).
"Tire & Rubber, by application, is estimated to account for the highest CAGR during the forecast period."
The tire & rubber are witnessing the highest CAGR of 2.6% among other applications of the process oil market during the forecast period in terms of value. Due to its critical role in enhancing the performance and durability of rubber compounds. Process oils are integral in improving the elasticity, flexibility, and overall quality of rubber, making them essential for the tire manufacturing industry. The rising demand for high-performance tires, driven by the automotive industry's growth and increasing vehicle ownership, is propelling the market forward. Additionally, stringent regulations aimed at reducing carbon emissions are encouraging the use of environmentally friendly and efficient process oils, further boosting market growth. The continuous innovation in tire technologies and the expanding automotive sector in emerging economies are also significant contributors to this upward trend.
"Non-carcinogenic, by type, is estimated to account for the highest CAGR during the forecast period."
Non-carcinogenic type of process oil that exhibit the highest CAGR of 3.2% among different types in the process oil market, in terms of value. This growth can be attributed due to the increasing regulatory pressures and consumer awareness regarding health and environmental safety. These oils are preferred in various applications, including rubber processing, cosmetics, and food packaging, where safety and compliance with stringent standards are paramount. The shift towards sustainable and non-toxic alternatives is driving demand, particularly in developed regions with robust regulatory frameworks. Furthermore, advancements in refining technologies and the development of high-performance non-carcinogenic process oils are fueling their adoption across multiple industries, ensuring sustained market growth.
"Asia Pacific is estimated to account for the highest CAGR during the forecast period."
The Asia Pacific region demonstrates the highest CAGR of 2.8% in the process oil market, in terms of value. This robust growth can be attributed to several factors, including rapid industrialization, urbanization, and the burgeoning automotive sector. Countries like China, India, and Japan are witnessing significant growth in manufacturing and infrastructure activities, which, in turn, fuels the demand for process oils in applications such as rubber processing, textiles, and polymers. Additionally, the expanding middle-class population and increasing consumer spending power are boosting the automotive and tire industries, further propelling market growth. Government initiatives promoting industrial growth and foreign investments are also playing a crucial role in this upward trend, solidifying Asia Pacific as a key growth region for the Process Oil market.
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Source: Secondary Research, Expert Interviews, and MarketsandMarkets Analysis
Process Oil Market Players
Major companies in the Process Oil Market include ExxonMobil (US), Shell (UK), TotalEnergies (France), Idemitsu Kosan Co., Ltd. (Japan), and Petroliam Nasional Berhad (PETRONAS) (Malaysia) and others. A total of more than 18 players have been covered. Some of the key strategies adopted these players are investments, acquisitions, and expansions as the major strategies to consolidate their position in the market.
Process Oil Market Report Scope
|
Report Metric |
Details |
|
Market Size Available for Years |
2018–2029 |
|
Base Year Considered |
2023 |
|
Forecast Period |
2024–2029 |
|
Forecast Units |
Value (USD Million/Billion) and Volume (Kiloton) |
|
Segments Covered |
Process Oil by Type, Function, Production Technology, Application, and Region |
|
Geographies Covered |
Asia Pacific, Europe, North America, South America, and Middle East & Africa |
|
Companies Covered |
The major market players include Shell plc (UK), Exxon Mobil Corporation (US), TotalEnergies (France), Idemitsu Kosan Co., Ltd. (Japan), Petroliam Nasional Berhad (PETRONAS) (Malaysia), Indian Oil Corporation Ltd (India), Gandhar Oil Refinery (India) Limited (India), HollyFrontier Refining & Marketing LLC (HollyFrontier) (US), Behran Oil Co. (Iran), ORGKHIM Biochemical Holding (Russia), Repsol (Spain), Hindustan Petroleum Corporation Limited (India), ORLEN Unipetrol (Prague), Panama Petrochem Ltd (India), Nynas AB, (Sweden), H&R Group (Germany), APAR Industries (India), CPC Corporation (Taiwan), LODHA Petro (India), WBF Pte Ltd (Singapore), Swepco (US), Cross Oil (US), Iranol Company (Iran), Vintrol Lubes Pvt. Ltd. (India), Petro Gulf FZC (Dubai), Witmans Industries Private Limited (India), Sterlite Lubricants (India), GP Petroleums (India), Wellbank Global Pte Ltd (Singapore), and Ergon North & South America (US). |
This research report categorizes the process oil market based on Process oil by Type, Function, Production Technology, Application, and Region.
Based on Type, the process oil market has been segmented as follows:
- Naphthenic
- Paraffinic
- Non-carcinogenic
- Aromatic
Based on Function, the process oil market has been segmented as follows:
- Extender Oil
- Plasticizer
- Solvent
- Defoamer
- Others
Based on Production Technology, the process oil market has been segmented as follows:
- Convention Route
- Gas to Liquid
- Bio-based
- Based on Application, the process oil market has been segmented as follows:
- Tire & Rubber
- Polymer
- Personal Care
- Textile
- Others
Based on Region , the process oil market has been segmented as follows:
- Asia Pacific
- Europe
- North America
- South America
- Middle East & Africa
Key Developments
- In August 2022, Cross Oil and Ergon, Inc., have entered into an offtake and marketing agreement through which process oils will serve as the exclusive marketer and seller of Cross Oil's naphthenic base oils, including Corsol, L-Series, B-Series, CrossTrans, and Ebonite oils. This agreement can help the cross oil company to strengthen its process oil products.
- In September 2019, Repsol formed a Joint Venture with United Global Limited after buying a 40% stake in its Singapore-based lubricants manufacturer and distributor United Oil Company. This will expand Repsol’s presence in Asia Pacific and especially Indonesia, the region’s largest lubricants markets. The agreement will allow Repsol to increase its presence in Southeast Asia, one of the world’s largest and fastest-growing lubricants markets with sales of 3 million metric tons per year and an annual growth rate of 4%.
- In June 2018, Gandhar Oil Refinery (India) Limited entered into an investment agreement with the Hamriya Free Zone Authority for carrying out an integrated development project to produce white oil, liquid paraffin, hydraulic liquid, transformer oil, rubber processing oil, motor oil, and industrial oil. The agreement was signed due to the increasing demand for oil products from the rubber processing, transformer, vehicle, iron, and steel industries.
Frequently Asked Questions (FAQ):
What is the key driver for the process oil market?
The Increasing demand and consumption of process oils in Asia Pacific
Which region is expected to register the highest CAGR in the process oil market during the forecast period?
The Asia Pacific is estimated to register the highest CAGR of 2.8% during the forecast period, in terms of value.
What is the major source of process oil?
The major source of process oil is petroleum refining, where crude oil is processed to produce a variety of oil types, including paraffinic, naphthenic, and aromatic process oils. These oils are derived from specific fractions of crude oil through complex refining processes, ensuring the appropriate properties and performance characteristics needed for various industrial applications.
Who are the major players of the process oil market?
The key players operating in the market include ExxonMobil (US), Shell (UK), TotalEnergies (France), Idemitsu Kosan Co., Ltd. (Japan), and Petroliam Nasional Berhad (PETRONAS) (Malaysia).
What is the total CAGR expected to record for the process oil market market during 2024-2029?
The market is expected to record a CAGR of 1.7% from 2024-2029. .
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The study involved four major activities in estimating the current size of the process oil market. Exhaustive secondary research was done to collect information on the market, peer markets, and parent market. The next step was to validate these findings, assumptions, and sizing with the industry experts across the Process oil value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the complete market size. Thereafter, market breakdown and data triangulation were used to estimate the market size of segments and subsegments.
Secondary Research
Secondary sources for this research study include annual reports, press releases, and investor presentations of companies; white papers; certified publications; and articles by recognized authors; gold- and silver-standard websites; Process oil manufacturing companies, regulatory bodies, trade directories, and databases. The secondary research was mainly used to obtain key information about the industry’s supply chain, the total pool of key players, market classification, and segmentation according to industry trends to the bottom-most level and regional markets. It has also been used to obtain information about key developments from a market-oriented perspective.
Primary Research
The process oil market comprises several stakeholders, such as raw material suppliers, technology support providers, process oil manufacturers, and regulatory organizations in the supply chain. Various primary sources from both the supply and demand sides of the market were interviewed to obtain qualitative and quantitative information. Primary sources from the supply side included industry experts such as Chief Executive Officers (CEOs), vice presidents, marketing directors, technology and innovation directors, and related key executives from various key companies and organizations operating in the process oil market. Primary sources from the demand side included directors, marketing heads, and purchase managers from various sourcing industries. Following is the breakdown of the primary respondents:
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Market Size Estimation
Both the top-down and bottom-up approaches have been used to estimate and validate the total size of the process oil market. These approaches have also been used extensively to estimate the size of various dependent subsegments of the market. The research methodology used to estimate the market size included the following:
The following segments provide details about the overall market size estimation process employed in this study:
- The key players in the market were identified through secondary research.
- The market shares in the respective regions were identified through primary and secondary research.
- The value chain and market size of the process oil market, in terms of value and volume, were determined through primary and secondary research.
- All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources.
- All possible parameters that affect the market covered in this research study were accounted for, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data.
- The research included the study of annual and financial reports of the top market players and interviews with industry experts, such as CEOs, VPs, directors, sales managers, and marketing executives, for key insights, both quantitative and qualitative.
Global Process oil Market Size: Bottom-Up Approach
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Global Process oil Market Size: Top-Down Approach
Data Triangulation
After arriving at the overall market size using the market size estimation processes as explained above, the market was split into several segments and sub-segments. To complete the overall market engineering process and arrive at the exact statistics of each market segment and subsegment, the data triangulation and market breakdown procedures were employed, wherever applicable. The data was triangulated by studying various factors and trends from both the demand and supply sides in the process oil sector.
Market Definition
Shell plc, one of the leading manufacturers of process oil with specialization in the exploration, production, refining, and marketing of oil & natural gas, defines process oil as special oils that are utilized as a raw material component or as a processing aid in a wide range of chemical and technical industries. These oils are used to process and manufacture multiple rubber compounds. The manufacturing cost of rubber products can be reduced by adding process oils to them as it increases the efficiency of the manufacturing process. The use of process oils improves the quality of finished rubber products by improving the chemical stability and enhancing the fuel economy of specific engines. They are also used as lubricants in low-temperature applications and offer higher resistance to oxidation than mineral oils.
Key Stakeholders
- Raw material manufacturers
- Technology support providers
- Manufacturers of process oil
- Traders, distributors, and suppliers
- Regulatory Bodies and Government Agencies
- Research & Development (R&D) Institutions
- End-use Industries
- Consulting Firms, Trade Associations, and Industry Bodies
- Investment Banks and Private Equity Firms
Report Objectives
- To analyze and forecast the market size of process oil market in terms of value and volume
- To provide detailed information regarding the major factors (drivers, restraints, challenges, and opportunities) influencing the regional market
- To analyze and forecast the global process oil market based on process oil by type, function, production technology, application, and region
- To analyze the opportunities in the market for stakeholders and provide details of a competitive landscape for market leaders
- To forecast the size of various market segments based on five major regions: North America, Europe, Asia Pacific, South America, and Middle East & Africa, along with their respective key countries
- To track and analyze the competitive developments, such as acquisitions, partnerships, collaborations, agreements and expansions in the market
- To strategically profile the key players and comprehensively analyze their market shares and core competencies
Available Customizations
With the given market data, MarketsandMarkets offers customizations according to the client-specific needs.
The following customization options are available for the report:
- Additional country-level analysis of the process oil market
- Profiling of additional market players (up to 5)
Product Analysis
- Product matrix, which gives a detailed comparison of the product portfolio of each company.
Generating Response ...
Growth opportunities and latent adjacency in Process Oil Market
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