Back in 1993 when the American Petroleum Institute first introduced base oil groups, it provided a useful way to sort base oil types by performance characteristics. In addition, it afforded an opportunity for automotive engine oil blenders to make marketing claims by using certain base oil types in their finished products. But as helpful as it was all those years ago, times have changed and questions are mounting about the utility of the API Groups and whether change is needed. Understanding why starts with an overview of the current system of classifying base oils.
The API categorizes base oils into five Groups: I, II, III, IV and V. Each is defined by a limited number of physical and chemical properties, including sulfur content, saturates level and viscosity index, which loosely correspond to how they are manufactured.
The need to categorize base oil was clear when the Groups were first introduced. The conventional process of making base oils by solvent refining and solvent dewaxing was being replaced by hydrocracking and catalytic dewaxing, and the purity and performance of the latter product was markedly better for automotive engine oil applications. That gave us Groups I and II, as well as a top echelon called Group III.
In addition, since polyalphaolefin offered even higher performance and was historically considered a synthetic material created by a unique chemical process, it was given a home of its own as Group IV. Finally, Group V was created to include all base oil types not otherwise captured in the four preceding groups. Since day one of the classification system, Group V has been an enigma to many since it put naphthenic base oils, which were deemed a second-rate, low-price option for making engine oils, in the same bucket as esters and other high-performance, high-cost types. But while Group V was a bit perplexing, it didnt really garner much attention.
What did get attention was the concern that although Group II includes base oils with V.I. spanning from 80 to 119, those at the high end of that range offered measurable performance and blending cost advantages over those at the low end. Because of this, Group II base oils at the high end capture a premium in the marketplace. And since the API Group II definition did not resolve the difference, the marketplace soon coined and adopted an unofficial category for top-tier Group II, called Group II+. How high does the V.I. have to be for a base oil to be elevated to the distinction of a Group II+ designation? That depends on who you talk to, but most draw lines in the area of 115 to 118 V.I.; some even go as low as 112.
Market acceptance of Group II+ as an unofficial base oil group was just the start of splintering the original five API Groups. The next was seen when the term Group I+ was used by some to describe base oil produced by severe hydrotreating, so severe that some say they are cracking enough molecules to even be considered a Group II-minus. At the other end of the spectrum are Group I products with V.I. and saturates at the low end of the Group I range, dubbed Group I-minus by some. Although such parsing didnt always translate to quantifiable cost advantages for blenders, they evolved into quality statements that provided sales leverage.
And now with Group III supply and demand growing, Group III+ has emerged as another unofficial yet widely used designation to separate the good from the better. The need for such separation is the same as when Group II+ emerged as an unofficial designation: Group III base oils at the high end of the V.I. window (about 130 and greater) offer superior performance versus those at the low end, and blenders are willing to pay a premium for their help with satisfying some of the more rigorous OEM specifications (i.e., Daimler approvals) and growing demand for lower viscosity grades such as SAE 0W-16, 0W-20 and even lighter grades in the future.
Maybe its time for API to revisit its base oil Groups. When the system was established in 1993, there was very little Group III in the market. The market realities we face today were little more than hypothetical at the time, since Group III was such a rare breed and there were so few specimens to work with.
Today, with at least seven and counting Group III contenders in the U.S. market, its no longer an exotic bird of paradise. Rather, with supply coming from only two or three producers, Group III+ is the rare bird. These emerging base stocks may be deserving of closer attention with regard to read-across rules and others, especially as we prepare for more base stock sources, increasing market penetration of emerging technology and lower viscosity grades, and the continuing ratcheting down on motor oil performance specifications.
Tom Glenn is president of the consulting firm Petroleum Trends International, the Petroleum Quality Institute of America, and Jobbers World newsletter. Phone: (732) 494-0405. Email: tom_glenn@petroleumtrends.com