Australia offers opportunities for lubricant blenders with different business models, according to an industry expert.
“It is a market where new entrants have the opportunity and significant volume is available for participants,” Tim Seeber, Managing Director and Founder of Australia-based International Lubricant Distributors (ILD) shared with attendees at the 18th ICIS Asian Base Oils and Lubricants Conference in Singapore last week.
“New entrants need to find a niche and small wins to get into the market,” he said.
“No single company controls the Australian market. The top four players hold about 40% of [market] value with 110 brands competing across multinational, independent and niche-distributor tiers, making it a useful entry-point model for the fragmented Asian market,” he added.
Business models could include local blending, direct import or a hybrid model.
Seeber suggested that local blending could involve 80% of imported base oil from the Asia-Pacific and 20% of Australian rerefined base oil which the country produces about 320 million liters per year or more than half of all oil sold in the country, additives imported from Singapore and U.S. and blended in Queensland, Victoria, New South Wales and Western Australia. Companies such as Penrite, Castrol and Fuchs have local blending.
“Local blending still matters and is retained for bulk delivery economics, mining-specification formulation suited to Australia’s harsh conditions and just-in-time supply in remote regions such as Pilbara and Hunter Valley,” he noted.
While ExxonMobil adopts a hybrid model with high-volume grades blended locally at licensed plant and premium and specialist grades imported from a global supply chain and distributed using local retail and B2B networks.
He added that the distribution models for other major players such as BP, Viva Energy, the exclusive supplier of Shell oil and grease products in Australia, ExxonMobil and Caltex operate hybrid models with direct key accounts for mining, fleet and original equipment manufacturers and indirect channels through authorised distributors such as Motion Asia Pacific and Great Southern Fuels and retail networks. Meanwhile, independents such as Penrite and Nulon rely heavily on the automotive aftermarket and products are distributed through workshops, trade parts stores, and online retail.
In terms of the country’s domestic geographic markets, New South Wales and Victoria have the largest volumes with its dense vehicle ownership, Port Botany and Port Melbourne for bulk imports and diversified manufacturing while Queensland’s demand comes mainly from the coal and metallurgical mining and agriculture sectors and western Australia from iron ore, liquefied natural gas and remote Pilbara mineral and natural gas operations in the north of western Australia.
Demand for imports remains strong. “Imports have kept accelerating and Australia is structurally dependent on Asian supply. Over 90% of finished lubricant imports came from Asia in 2021 to 2025,” he said.
“Asian-branded vehicles now dominate Australia’s vehicle parc, driving pull-through demand for Asian formulated lubricants,” he explained.
“Toyota has been a top selling brand for 23 years but the Chinese took over Toyota this year,” he said.
In addition, the adoption of electric vehicles is slow. “Australia is predominantly still ICE and will still be a hybrid model due to the geography,” he commented.
Import volumes for industrial lubricant grew 4.1% in 2024, a 12.4% compound annual growth rate (CAGR) from 2020 to 2024. In 2025, the country exported 87.4 million liters and imported 555.6 million liters of lubricating oil, grease and basestock with 48% from Singapore, 19% from South Korea, 12% from Malaysia and 21% from the rest of the world.
Australia’s main economic driver is the mining industry which contributed more than 12% of gross domestic product in 2025 with 448 operating mines nationwide.
Seeber shared that mining companies’ after-sales support is different from the automotive sector. For example, suppliers are expected to have the correct product for every compartment and application with SKU rationalisation to cut complexity and wrong-oil risk, offer on-site lubricant audits and reliable remote supply, contamination control and root-cause analysis, training and compliance.
With specialised engineers looking at oil at the micro levels such as the contamination of oils due to heat, dust and water, “mining raises the bar to what is needed to be successful in Australia,” he said.