Naphthenic Base Oil Market Report 2026

The naphthenic base oil market size has grown strongly in recent years. It will grow from $2.51 billion in 2025 to $2.64 billion in 2026 at a compound annual growth rate (CAGR) of 5.4%. The growth in the historic period can be attributed to expansion of industrial manufacturing activities, growth in metal fabrication operations, rising demand for process oils, increasing use in rubber processing, availability of naphthenic crude feedstocks.

The naphthenic base oil market size is expected to see strong growth in the next few years. It will grow to $3.28 billion in 2030 at a compound annual growth rate (CAGR) of 5.6%. The growth in the forecast period can be attributed to increasing demand for specialty lubricants, rising adoption in renewable energy equipment, expansion of electrical infrastructure investments, growing focus on high-performance base oils, increasing use in advanced industrial applications. Major trends in the forecast period include growing demand for high-solvency industrial oils, rising use in metalworking and process applications, expansion of specialty lubricant formulations, increasing adoption in electrical insulation oils, enhanced performance in low-temperature applications.

The growth of the construction industry is expected to drive the naphthenic base oil market going forward. The construction sector involves the planning, design, execution, and management of infrastructure, buildings, and related projects across residential, commercial, and civil engineering domains. Naphthenic base oil is used in construction for lubricating and enhancing the performance of machinery and equipment, including hydraulic systems and heavy-duty engines. For instance, in July 2024, according to the US Census Bureau, the value of construction operations increased from $2.01 trillion in May 2023 to $2.14 trillion in May 2024. Therefore, growth in construction is fueling demand for naphthenic base oil.

Major companies in the naphthenic base oil market are focusing on innovative solutions, such as high-viscosity, severely hydrotreated naphthenic base oil, to improve engine performance, thermal stability, and meet strict environmental and lubricant quality standards. High-viscosity, severely hydrotreated naphthenic base oil is a purified, thick oil treated to enhance thermal stability, oxidation resistance, and overall lubricant performance. For example, in November 2024, Ergon Asia, a Singapore-based petroleum company, launched HyGold L750 in the Thai market. This product addresses growing industrial demand for high-performance lubricants, enhances operational efficiency, and supports applications in metalworking, automotive, and process industries, strengthening Ergon Asia’s presence in Southeast Asia.

In December 2023, RaceTrac, Inc., a convenience store company based in the U.S., acquired Gulf Oil, LLC for an undisclosed sum. This acquisition is designed to bolster RaceTrac's geographic footprint, operational scale, and service quality for distributors and licensees, while continuing to provide excellent service at its current locations throughout the United States and Puerto Rico. Gulf Oil, LLC specializes in producing and distributing high-quality lubricants, automotive and industrial oils, and greases for a range of applications, in addition to providing naphthenic base oil.

Major companies operating in the naphthenic base oil market are Ergon, Nynas, Calumet Specialty Products, San Joaquin Refining, Apar Industries, H&R Group, Cross Oil, Gandhar Oil Refinery, NYCO, Repsol, ENI, Lukoil, Gazprom Neft, PetroChina, Sinopec, Petronas, Petrobras, Indian Oil Corporation, BP, TotalEnergies.

Asia-Pacific was the largest region in the naphthenic base oil market in 2025. It is expected to be the fastest-growing region in the global naphthenic base oil market during the forecast period. The regions covered in the naphthenic base oil market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the naphthenic base oil market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The naphthenic base oil market consists of sales of transformer oils, lubricating oils, and other Group V oils. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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