At the same time, sustainability is changing procurement criteria. Buyers are increasingly asked to demonstrate progress on life cycle impacts, driving interest in circularity (re-refined base oils), lower-carbon feedstocks, and credible mass-balance claims. For base oil suppliers, this is not merely a challenge; it is a chance to reposition portfolios toward higher-value, future-ready niches.
ICE vs. EV outlook: The demand reset In 2024, global finished lubricant demand was broadly flat, and base oil demand likewise remained steady overall, yet the composition continued shifting, with the growth of Group III/III+ and synthetics. At the same time, the market remains structurally long in several categories: global average effective utilisation sits roughly in the 70–75% range, and surplus is concentrated in lighter-viscosity grades, much of which clears into non-lube outlets. In other words, EVs land on a market that is already managing substitution, surplus, and mix-shift, making portfolio strategy more important than ever.
EV fleet growth
China is operating at a near 50% electric share of new-car sales, pulling fluid innovation and supply chains forward. Europe’s trajectory remains policy-driven but uneven, while the United States continues to grow from a lower base. Meanwhile, many emerging markets will remain ICE-heavy for the foreseeable future due to affordability and infrastructure constraints.
For base oil suppliers, this means a two-speed market: some regions will accelerate toward EV-fluid qualification, higher-spec synthetics, and new partnerships, while others will remain anchored in conventional lubricants, yet still migrating toward higher-quality base oil due to viscosity and performance trends.
ICE lubricant decline
EV adoption is expected to have a negative impact on the lubricants industry. The highest impact will be expected on automotive engine oils used in ICEs. However, there are potential volume and value growth opportunities in other lubricants and fluids segments, as the deployment of zero-emission vehicle technologies accelerates.
Base oil demand shifts: Segment-by-segment
Automotive engine oils Across the world, the automotive engine oil demand represents the higher end of the finished lubricant quality spectrum. The global market is rapidly moving toward lighter-viscosity grade engine oils, both in consumer and commercial segments. In the consumer, the demand is gravitating toward 0W-xx grades, whereas demand in the commercial segment is moving toward 10W-xx grades, with some movement toward 5W-xx grades as well. The growing EV penetration will directly impact the engine oil demand; the higher the penetration of EVs, the lower will be engine oil demand.
In the PCMO segment, there is an increasing demand for Group III/III+ and PAO as the market shifts toward 0W-xx grades. Meanwhile, in the HDMO segment, Group II/II+ basestocks are playing a more significant role, with Group III also gaining importance as the demand for 5W-xx grades rises.
Transmission and gear oils
The accelerating EV penetration is set to structurally erode the demand for conventional automotive gear oils and transmission fluids, as EVs eliminate multi-speed transmissions and engine-linked drivetrains. However, the shift is not only about decline, as a new frontier is emerging: Specialised e-fluids are gaining traction, designed for reduction gears, thermal management, and optimisation of drivetrain efficiency in electric powertrains.
Meanwhile, in the conventional segment, the trend is clear: grades such as 80W-90 and 75W-85/90 are becoming the norm, driving a stronger demand for Group II and Group III base oils in modern formulations.
Industrial and specialty oils
Industrial lubricant is the steady anchor in a shifting market. In an otherwise flat, or even declining, finished lubricant market, the industrial segment offers a cushion of stability and a reliable growth avenue. Historically, Group I base oils dominated industrial lubricant blending, but the landscape is evolving. Group II and II+ have firmly established their presence largely at the back of surplus availability, reshaping the formulation mix.
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LUBE MAGAZINE NO.191 FEBRUARY 2026
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