The lubricant industry is undergoing structural changes driven by both technological and regulatory developments:
- EV shift: Markets mostly in Europe and South Asia are seeing a gradual decline in demand for passenger car motor oils due to the rise of electric vehicles.
- Industrial growth: Demand for lubricants in manufacturing, metalworking and hydraulic systems remains strong, especially in regions like Japan, which saw record sales in 2022.
- Synthetic adoption: Synthetic formulations are increasingly favored in power generation and transportation for their longevity and energy efficiency.
- Sustainability: Suppliers are investing in renewable and circular economy practices, such as biodegradable formulations and the use of rerefined base stocks.
A trend that has already begun, demand for passenger car motor oils is expected to decrease markedly in the coming years as electrification gains speed. But how will demand for other types of lubricants fare? Here are snapshots of some of the key global markets.
Americas
North America’s finished lubricant demand is projected to be essentially flat over the next few years, according to industry consultants Kline & Co, clocking a compound annual rate of 0.4% until 2027. Shrinking consumer demand for automotive lubes is being driven electrification, lower-viscosity oils that are available as full synthetics and longer drain intervals. This measly growth will be offset by dwindling passenger car demand.
In South America, the story is very different. Kline thinks the market will expand at 2.5% annually, boosted by rising demand in the consumer and industrial segments.
Europe
Germany is the economic powerhouse of Europe and its biggest automaker. The domestic demand trend has been on a downward slope for some time, falling in large steps around the end of 2024. In October that year, demand plummeted 39% from the same month in 2023, according to the Federal Office for Economic Affairs and Export Control. The biggest driver was a steep drop for the market’s biggest product category, automotive engine oils.
Asia-Pacific
Asia-Pacific is the largest regional consumer of lubricants, accounting for more than 40% of the global market. Kline projects demand for finished automotive and industrial lubricants will reach 18 million metric tons by 2027, up from 16.7 million tons in 2022.
China dominates the region, with demand for finished fluids forecast to reach 6.3 million tons by 2027. Lubricant sales in Japan reached new heights in 2022. After a pandemic-induced dip in 2021 and a slight recovery in 2022, sales volumes in the country reached their highest levels in the past decade.
*According to Lubes’n’Greases reporting.