BASE OILS
Lubricants and base oils in 2025: A blend of uncertainties for the year ahead
Guo Harn Hong (Marc), Global Lead, Argus Media
The lubricants and base oils market has largely been restored to normality in 2024. Easing logistical complications, elevated production, and steadier crude and refined oil product values have led to restored trade flows, refinery economics, and seasonal trends. Yet the question remains – what lies ahead for 2025?
For one, market fundamentals have evolved.
Lubricant consumption has slowed in North America and Europe amid a relatively high interest rate environment and a renewed emphasis on engine oil robustness and longer oil-drain intervals. US lubricant sales for the first 10 months of 2024 are at some their lowest levels on record. Sales in Germany, the UK, France, and Italy have also extended their downward trend, or held steady at lower levels.
The slowdown in lubricant demand also reflects a smaller share of internal combustion engine (ICE)
12 LUBE MAGAZINE NO.185 FEBRUARY 2025
vehicles sold. New car sales in the US in 2024 have risen to their highest since 2019, but the share of ICE vehicles sold has declined versus their levels from previous years. In the European Union, new car registrations in the 11 months into 2024 were stable versus 2023 at 9.7mn units. But the share of ICE vehicles sold has also declined from 35.6% to 33.7%, according to the European Automobile Manufacturers’ Association. This reduces demand for engine oils at the factory-fill point.
Lubricant consumption in Asia-Pacific is steadier. Growth in the world’s largest lubricant market – China – remains lacklustre amid a prolonged downturn in the real estate market and as consumer spending drops. But regional demand is lifted by higher consumption in India and southeast Asia. Manufacturing activity remains in expansion, with India’s purchasing managers’ index (PMI) at 56.4 and ASEAN PMI at 50.7 to end the year.
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