Soft Rebound for U.S. Lubes


While a U.S. motor vehicle production turnaround should help propel demand for factory fill engine oils and industrial lubricants, total U.S. lubricant consumption in 2014 wont reach prerecession levels, according to Lubricants, a new study from market research firm Freedonia Group.

This will largely be due to the greater use of longer-lasting, higher-performing synthetic lubricants which extend drain intervals, therefore reducing overall lubricant requirements in volume terms, Freedonia stated. Average price increases will continue to be significant due to expected growth in crude oil prices and a shift in product mix toward high-value lubricants.

Freedonias Lubricants study forecasts U.S. demand for lubricants to grow 1.3 percent annually to 2.25 billion gallons in 2014, valued at $22 billion. That compares with an annual 5 percent decline from 2004 to 2009.

The firm expects aftermarket demand for engine oils will decrease, with the do-it-yourself segment continuing to lose out to do-it-for-me services, a trend which stalled in 2008 and 2009 as drivers sought out more economical alternatives for their vehicle service needs in the midst of difficult economic times.

Engine oils will continue to represent the largest and fastest growing segment of the synthetic lubricant market through 2014, Freedonia analyst Bridget McMurtrie told Lube Report. New engine oil specifications will boost synthetic growth and impact base oil demand, she noted. The emerging GF-5 standard for engine oil and General Motors’ new Dexos motor oil specification will certainly have an impact on base oil demand, as higher-quality base stocks – including [API] Group II, Group II+ and Group III oils, as well as synthetic base stocks – will increasingly be used to formulate acceptable motor oils.

Synthetics are also expected to expand their share of the transmission and hydraulic fluids segment, she added, driven by primarily by environmental and performance requirements.

Process oils will advance at the most rapid pace, Freedonia forecasts, promoted by rebounding manufacturing activity following declines from 2004 to 2009 period. The firm expects demand for process oils to grow 3.6 percent per year to 400 million gallons by 2014. In particular, an improved outlook for food and beverages, chemicals, and plastics and rubber will offer good opportunities for growth, the firm asserted. However, process oils will continue to encounter challenges brought about by changing environmental and regulatory standards.

Process oils such as white oils and electrical oils are impacted by a number of environmental and regulatory standards, according to McMurtrie. For instance, white oils intended for use in food, pharmaceutical and cosmetic applications must meet U.S. Pharmacopeia or National Formulary standards and be free from unsaturated hydrocarbons, she said.

McMurtrie pointed out that electric power equipment industry participants must comply with a number of governmental regulations and industry-sanctioned standards, while at the same time increasing the safety, reliability and energy efficiency of the products.

These regulations affect the type of electrical oils that can be used in electrical power equipment, she continued. For example, government regulations require that these oils contain no potentially hazardous ingredients such as polychlorinated biphenyls (PCBs).

Changing equipment technology could also affect demand for electrical oils in the longer term, McMurtrie observed. For example, several companies have been developing high temperature superconductors, she noted. HTS transformers, which do not require cooling oil, could potentially eliminate the fire, explosion and environmental hazards of oil-cooled transformers.

U.S. Lubricant Demand

Demand (millions of gallons)

Percentage Annual Growth Over 5-Year Period







Total U.S. Demand






Engine Oils





Process Oils






General Industrial Oils






Transmission and Hydraulic Fluids






Other Lubricants






The 375-page Lubricants study is $4,900 from Cleveland-based Freedonia Group. For more information, visit

Related Topics

Market Topics