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Oil & Gas Lubricants Market - Forecast(2023 - 2028)
Oil & Gas Lubricants Market Overview
Oil & gas lubricants market size is forecast to reach
US$10.9 billion by 2027, after growing at a CAGR of 3.1%
during 2022-2027. Oil & Gas lubricants are suitable
for moving parts of various equipment like cranes,
shakers, thrusters, compressors, generators among
others. The mechanical stress, vibration, internal combustion can be reduced by
using different lubricant products like greases, hydraulic
fluid, engine
oil, and others using polychlorinated biphenyl products. In
addition, the growing shift towards offshore exploration is boosting the demand
and need for oil & gas lubricants as a risk associated with exploration for
system failure is high. According to UK and Norway Exploration and Production
Outlook for 2021, United Kingdom Continence Society(UKCS) oil and gas capital
expenditure on-field development is estimated at US$4.0 billion in 2021 with a
rise from US$3.8 billion in 2020. Westwood expects production of 4.18 million barrels
of oil equivalent per day in 2021, which is forecast to increase further in
2022 as field start-ups to full production in Norway. The use of lubricants for drilling, exploration, and
others in the oil & gas sector will
boost the oil & gas
lubricants market during the forecast
period.
COVID-19 Impact
The Covid-19
pandemic has been a major challenge for the oil
& gas lubricants market owing to directly affecting the manufacturer's
supply chain across the globe and shut down the production facilities to
minimize the risk of virus spread. The major countries
affected by the virus are the US, India, Brazil, Indonesia, Russia, and others.
The oil and gas sector has been highly impacted due to covid 19 and experiencing
shocks owing to price fluctuation. According to World Economic Forum, the
demand for oil & gas has been contradicted for more than 10 million barrels
per day in the first half of 2020 during the peak of lockdown. The government
and private sector initiatives are required to build back a better oil &
gas sector and to recover the oil & gas lubricants market during the
forecast period.
Report Coverage
The report: “Oil & Gas Lubricants Market Report–
Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the
following segments of the oil & gas lubricants industry.
By Product Type: Engine Oil, Turbine Oil, Compressor
Oil, Circulating Oil, Grease (Commercial, Industrial), Coolants or Antifreezer,
Hydraulic Fluid, Corrosion Inhibitor, and Others
By Location: Onshore, Offshore
By
Application:
Drilling, FPSO (Floating Point Storage and Offloading), Production, Refining,
Transmission, and Others.
By Geography: North America (USA, Canada, and Mexico),
Europe (UK, Germany, Italy, France, Netherlands, Belgium, Spain, Russia, and
Rest of Europe), Asia-Pacific (China, Japan, South Korea, India, Australia, and
New Zeeland, Indonesia, Taiwan, Malaysia, and Rest of APAC), and Rest of the
World: The Middle East (Saudi
Arabia, UAE, Israel, Rest of the Middle East) and Africa (South Africa,
Nigeria, Rest of Africa)
Key Takeaways
- North
America is expected to register a CAGR of 2.8% during
the forecast period (2022-2027) owing to growing offshore exploration
activities and rising shale production in the US, Canada, and the northern sea
region for the production of lubricants, hydraulic
fluid, and others.
- The ease of application and cost-effectiveness
of the oil & gas lubricants is driving the demand and need for lubricants
during the forecast period.
- Technological advancement leading to higher
well production rates is further driving the market growth during the forecast
period.
- The rise in offshore exploration activity under sea acts as an opportunity for oil & gas lubricants in the forecast period owing to its usage for oil and water separator and others.Figure: North America Oil & Gas Lubricants Market Revenue, 2021-2027 (US$ Billion)
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Oil & Gas Lubricants Market Segment Analysis – By location
The onshore segments accounted for around 70% of the market share in 2021 and are estimated to grow at a significant CAGR during the forecast period. Oil and gas exploration and production are very crucial and machine dependability. The lubricants are widely used in the machine for efficient working to eradicate the problem due to machinery failure during drilling over the onshore oil and gas exploration by reducing the internal combustion of the machine. If the machine stops working, there will be a huge loss in millions as most of the onshore site is located in remote areas and there is no downtime for repair and maintenance and it will be too expensive. According to Australian Petroleum Production and Exploration Association Limited, Australian petroleum liquids production increased slightly in 2020 to 169 million barrels up 2% as compared to 2019. According to Tethys Oil, onshore production of oil from the Sultanate of Oman amounted to 334,326 barrels of oil, corresponding to 10,785 barrels of oil per day in October 2021. Therefore, the growing demand for lubricants over onshore during the exploration and production activity will boost demand for oil & gas Lubricants during the forecast period.
Oil & Gas Lubricants Market Segment Analysis - By Application
The
drilling segments accounted for approximately 14%
of the market share in 2021 and are estimated to grow at a significant CAGR
during the forecast period. The drilling activity is done over onshore and
offshore to extract oil and gas from it using polychlorinated biphenyl product and, injection molding technology. The lubricants are used in the machinery
which is used during the drilling activity. The growing shift of the oil & gas
industry towards the more complex offshore location and the risks associated
with machine failures also increases, resulting in rising demand for
specialized lubricants for offshore. According to the Indian Brand Equity Federation,
the oil and gas sector is expected to attract US$25 billion investment in
exploration and production by 2022. According to the Railroad Commission of
Texas, 842 original drilling permits has been issued by the Railroad Commission
of Texas in November 2021 compared to 382 in November 2020 to drill new oil or
gas wells. In addition, a growing pipeline network for oil & gas
transmission across the globe is also expected to boost the demand for oil
& gas lubricants during the forecast period. Therefore, the growing drilling
activity will boost the demand for the oil & gas lubricants market during the forecast period.
Oil & Gas Lubricants Market Segment Analysis - By Geography
North America region held the largest share in the oil & gas lubricants market in 2021 up to 38%, owing to the exploration and production activity in the United States, Canada, and others. The comprehensive use of oil & gas lubricants to reduce machine failure in the onshore and offshore locations is helping in the market growth during the forecast period. Additionally, the shale revolution in the North American region has led to bolstering growth in oil and gas production owing to advanced technology usage while drilling and production of oil and gas found in shale rock. According to US Energy Information Administration, the production of gas is 3,548,654 million cubic feet and is expected to rise by 2% to 97.6 billion cubic feet per day. Dry Shale gas production is around 75.453 billion cubic feet per day in December 2021. Therefore, the growing production of oil & gas will increase the demand for the oil & gas lubricants market.
Oil & Gas Lubricants Market Drivers:
The demand for oil & gas lubricants in an offshore location
The
growing demand for oil and gas lubricants in offshore locations by providing
high-quality, reliable insulation for heavy-duty machinery during exploration,
drilling, production, and others. The growing use of
oil & gas lubricants to reduced friction, high saline content, high
pressure & freezing temperature, oil and water separation, and others will
boost the demand during the forecast period. In addition, the rise in research
& development activity for oil & gas will increase the demand by 2027. According to US Energy Information
Administration, 1,270,416 million cubic feet of offshore
natural gas was produced in 2020. Therefore,
the growing production of offshore oil & gas will be driving the demand for
the oil & gas lubricants market during the forecast period.
Rising demand for oil & gas lubricants owing to ease of application and efficient operation
The rising demand for oil and gas lubricants owing to ease of application is boosting demand during the forecast period. It helps to lower gas solubility and consequently resists dilution and improve viscosity control which results in additional protection against wear, the efficiency of machinery, and reduced foaming allowing to extend maintenance time and reduce equipment failures and unscheduled shutdowns making it easier to use. The synthetic and premium mineral oil-based lubricants are widely used to protect oil and gas machinery operating in challenging and diverse environments. According to the U.S. Department of Labor, Mine Safety & Health Administration, 1,209 coal mines have been operations in 2021. Therefore, the ease of application and efficiency for heavy machinery used in mining, construction & others during operation will be driving the demand for the oil & gas lubricants market during the forecast period.
Oil & Gas Lubricants Market Challenges:
Volatile price of Oil and Gas
The volatile price of oil and gas can hinder
the market for oil & gas lubricants. The oil and gas lubricants market is
directly connected with the oil & gas sector, owing to the price fluctuation
of crude oil from time to time. According to US Energy Information
Administration, regular gasoline retail prices to average US$3.06 per gallon in
2022 with a rise from 2021 having US$3.00 per gallon, and expected to decline to
have US$2.80 per gallon in 2023. Also, diesel prices to increase to an average of
US$3.33 per gallon in 2022 before decreasing to US$3.27 per gallon in 2023. Such
factors have become the major challenge of oil & gas lubricants in terms of
consumption, which constrains the growth of the market.
Oil & Gas Lubricants Industry Outlook
Technology launches, acquisitions, and R&D
activities are key strategies adopted by players in the Oil & Gas
Lubricants market.
Global Oil & gas lubricants top 10
companies include:
- Exxon Mobil Corporation
- Chevron Corporation
- Schlumberger Limited
- SK Lubricants Co., Ltd.
- Indian Oil Corporation Ltd.
- Lubrication Engineers Inc
- BP Lubricants Pvt. Ltd.
- Total SA
- Royal Dutch Shell
- Sinopec Lubricant Company
Recent Developments
- In December 2021, ExxonMobil
Launches Dual Certified Product Mobilgrease XHP™ 222 grease with HPM and Water
Resistance Enhancement Tag is now approved against the NLGI HPM certification
In addition to the HPM core certification, Mobilgrease XHP™ 222 also obtained
the +WR tag for an enhanced level of performance in the water resistance category.
- In April 2021, HollyFrontier
Lubricants & Specialties has launched Petro-Canada Lubricants SENTRONTM SP
30, an advanced-performance SAE 30 stationary gas engine oil and the first of
its category approved to meet MAN Truck & Bus AG’s latest M 3271-5 and M
3271-2 specifications.
- In September 2020, Hinduja Group subsidiary of Gulf Oil Lubricants India Ltd (GOLIL) announced a long-term strategic partnership with S-Oil Corporation of South Korea to exclusively manufacture and market its entire range of lubricants for the Indian market.