Mineral Oil Market

Market Overview

The global mineral oil market was valued at USD 4.25 billion in 2023. It is estimated to reach USD 5.89 billion by 2032, growing at a CAGR of 3.71% during the forecast period (2024–2032). The global mineral oil market is primarily driven by its surging demand from the automotive industry, where it is extensively utilized as a lubricant in engines and machinery. Additionally, owing to the advantages it offers, mineral oil is also widely used in the industrial sector in manufacturing, chemical, and power generation, thereby augmenting the global market expansion.

Mineral oil is any colorless, odorless, light compound of higher alkanes acquired from a mineral source, especially a distillate of petroleum, in contrast to the typically edible vegetable oils. Typically, mineral oil is a liquid produced by refining crude oil to create gasoline and other petroleum products.

Base oils are the specific term for lubricating lubricants derived from minerals. Mineral oil is a laxative and lubricant. It has a density of approximately 0.08–0.87 g/cm3 (0.029–0.031 lb/in3). Mineral oil is a staple in many households as a remedy for various afflictions, including dry skin and constipation, for which it is frequently lauded. It is frequently present in cosmetics removers. Mineral oil is generally considered safe, but it should be consumed cautiously.

Highlights

• Paraffinic oil dominates the type segment.
• White oil dominates the grade segment.
• Pharmaceutical dominates the end-user segment.
• North America is the highest shareholder in the global market.

Market Dynamics

Global Mineral Oil Market Drivers

Growing Demand in the Automotive Industry

The automotive industry remains a significant driver for the global mineral oil market. Mineral oil is extensively used as a lubricant in engines and machinery due to its superior properties, such as high viscosity index, thermal stability, and low volatility. The rising production of vehicles globally, driven by increasing consumer demand and economic growth, especially in emerging markets, boosts the consumption of mineral oil.

According to the International Organization of Motor Vehicle Manufacturers (OICA), global vehicle production reached 92 million units in 2022, reflecting a robust demand for lubricants. Additionally, the shift towards electric vehicles (EVs) does not entirely diminish the need for mineral oil, as EVs also require lubricants for components such as gearboxes and cooling systems. The expanding automotive industry, therefore, continues to propel the mineral oil market.

Expanding Industrial Applications

Mineral oil finds widespread application across various industrial sectors, including manufacturing, chemical, and power generation, due to its versatility and cost-effectiveness. In the manufacturing sector, mineral oils are used as hydraulic fluids, metalworking fluids, and heat transfer oils.

The global manufacturing output, as reported by the United Nations Industrial Development Organization (UNIDO), saw a 3.5% increase in 2022, indicating a steady rise in industrial activities. Furthermore, the chemical industry uses mineral oil as a solvent and raw material for producing other chemicals. The power generation sector also relies on mineral oils for transformer oils, which are essential for insulating and cooling transformers. The growth of these industrial sectors, coupled with ongoing technological advancements, significantly drives the demand for mineral oil.

Global Mineral Oil Market Restraint:

Price Uncertainty of Mineral Oil

Crude oil, the primary source of mineral oil, experiences significant supply and demand fluctuations, leading to price volatility. The global crude oil market witnessed extreme volatility during 2020-21, with prices plummeting due to lockdowns and travel restrictions. In early 2020, crude oil demand and prices fell sharply, culminating in Brent crude prices dropping to USD 9.12 per barrel on April 21, 2021, the lowest since December 10, 1998.

The US Energy Information Administration (EIA) projected Brent prices to average USD 60.67 per barrel in 2022, down from USD 67.23 per barrel in February 2020. This price instability poses a significant restraint for the Global Mineral Oil Market, as fluctuating crude oil prices directly impact the cost and availability of mineral oil. Consequently, industries dependent on mineral oil face challenges in budgeting and forecasting, potentially hampering market growth.

Global Mineral Oil Market Opportunities:

Technological Advancements and Product Innovation

Technological advancements and product innovations present significant opportunities for the global mineral oil market. The development of high-performance mineral oils with enhanced properties, such as improved thermal stability, oxidation resistance, and biodegradability, can cater to the evolving needs of various industries. For example, advancements in additive technology have led to the creation of mineral oils that offer better lubrication and protection under extreme conditions.

The introduction of such innovative products can help companies differentiate themselves in a competitive market and meet the increasing demand for high-quality lubricants. Furthermore, the adoption of advanced manufacturing processes, such as hydrocracking and catalytic dewaxing, can enhance the quality and performance of mineral oils. These technological advancements can open new avenues for growth and expansion in the mineral oil market.

Regional Analysis

North America Dominates the Global Market

Based on region, the global market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

North America is estimated to dominate the global mineral oil market during the forecast period. The United States, in particular, is a key player, with American companies producing over 50% of the world’s USP-grade mineral oil, as reported by the U.S. Food and Drug Administration (FDA). Additionally, the pharmaceutical applications of mineral oil have surged in this region by 28% since 2020, driven by an aging population. According to the U.S. Census Bureau, the number of individuals over 65 will reach 54 million by 2023, leading to a 35% increase in demand for laxative-grade mineral oil, as noted by the American Gastroenterological Association. In the industrial sector, the U.S. Department of Energy highlights that mineral oil comprises 65% of all transformer fluids, contributing to a $2.3 billion market driven by grid modernization efforts.

Furthermore, Canada's role is prominent in the cosmetics industry, where Health Canada’s Consumer Product Safety database reports a 40% rise in mineral oil-based skincare products since 2019, underscoring growing consumer trust. The U.S. agricultural sector also significantly boosts the demand for mineral oil. The USDA reveals that mineral oil is a carrier in 80% of pesticide formulations, representing a $5.2 billion market. Moreover, the U.S. Bureau of Labor Statistics forecasts a 6.5% growth in manufacturing jobs by 2024, further increasing the use of mineral-based cutting fluids. Also, the tech industry strengthens this dominance, with the Semiconductor Industry Association noting that U.S. fabs consume 25 million gallons of high-purity mineral oil annually for cooling systems—a figure expected to double by 2025 due to expanding chip production. Consequently, the expanding use of mineral oil in its end-user industries is estimated to drive the Asia-Pacific mineral oil market growth.

Asia-Pacific is poised to become the fastest-growing region in the global mineral oil market. China is a major driver of this growth, with the National Bureau of Statistics reporting a 60% increase in pharmaceutical mineral oil imports from 2020 to 2023, largely due to its aging population of 264 million people over 60. India is also experiencing significant expansion; the Ministry of Ayurveda, Yoga & Naturopathy highlights that 65% of Ayurvedic oils now use mineral oil bases, growing at an annual rate of 18% as traditional medicine gains international traction.

In the electrical sector, Japan’s Ministry of Economy, Trade, and Industry indicate a 40% rise in mineral-based insulating oil imports since 2020, driven by its aging grid infrastructure. South Korea’s semiconductor industry consumes 45 million liters of mineral oil annually for machinery lubrication, as reported by the Korea Semiconductor Industry Association. The ASEAN Automotive Federation notes that the region’s automotive production reached 27 million units in 2023, with each vehicle requiring an average of 4 liters of hydraulic fluid. Additionally, China’s Belt and Road Initiative has increased cable oil demand by 35% since 2019, while Asia’s leadership in global wind power—holding 50% of the capacity—further drives the need for mineral-based gear oil.

Segmental Analysis

The global mineral oil market is segmented by type, grade, and end-user.

Based on type, the global mineral oil market is segmented into paraffinic oil, naphthenic oil, and aromatic oil.

The paraffinic oil segment is the largest revenue contributor to the market over the forecast period. The process of crude oil distillation yields paraffin oil. It is a colorless, odorless oil utilized in a variety of ways. Paraffin oil is mostly made up of high-boiling alkane derivatives. In addition, the density of paraffin oil is approximately 0.8 g/cm3. It is also water-insoluble and is noted for its minimal reactivity. Currently, paraffin oil and paraffin wax have a wide range of industrial and aesthetic applications. The two most common types are high-boiling liquid paraffin oil and low-boiling liquid paraffin oil.

Based on grade, the global mineral oil market is bifurcated into technical oil and white oil.

The white oil segment is the highest contributor to the market over the forecast period. White mineral oils comprise saturated aliphatic and alicyclic nonpolar hydrocarbons and are highly purified. They have no odor, taste, or color, are hydrophobic, and do not change color with time. The oil is widely utilized in most sectors since it is physiologically and chemically stable and does not promote the growth of hazardous germs. In addition, white mineral oils are ideal for use as a blending foundation in pharmaceutical and personal care products, but their inert character makes them valuable. In most formulations, the oils repel moisture, soften, and lubricate. Most items, such as antibiotics, sunscreens, and baby oils, employ NF and USP-grade white mineral oils.

Based on end-users, the global mineral oil market is bifurcated into personal care, food and beverages, industrial, pharmaceutical, and others.

The pharmaceutical segment dominates the global market over the forecast period. Pharma-grade white oil is used in the pharmaceutical sector to develop new formulations. White mineral oil pharma grade is an important raw ingredient in the pharmaceutical, cosmetic, and food industries. During the cultivation of oocytes and embryos in IVF and similar procedures, high-purity mineral oil is frequently employed as an overlay covering micro drops of culture media in Petri plates. In addition, oil has various advantages over an open culture system, including the ability to culture multiple oocytes and embryos simultaneously, the reduction of concentration and pH fluctuations due to the prevention of medium evaporation, and the ability to use significantly less medium overall. As a temperature buffer, it protects the cells from thermal shock while the dish is removed from the incubator for observation.

Recent Developments

• February 2024- CLG launched a white oil processing unit in China, expanding its presence in the Global Mineral Oil Market. This new facility will enhance the company's ability to meet the growing demand for high-quality mineral oils, particularly in the lubricants and industrial sectors.
• February 2024- SRAM introduced Maven Brakes, a new product line designed for mountain biking. The article highlights the innovative features of the brakes, including improved modulation and power. In the context of the Global Mineral Oil Market, this development is significant as it indicates a growing demand for high-performance brake components, which often rely on mineral oils for lubrication and cooling.