As the types and quantities of base oils available on the market continue to expand, lubricant suppliers are also making ongoing efforts to understand the differences among various base oil types, thereby gaining a better grasp of the relative performance advantages offered by each base oil. Giovanni Loizzo, Head of Base Oil Procurement at Lubrizol, highlighted some common base-oil-related questions frequently raised by lubricant formulation developers when creating engine oils.

Base oils are the primary components of lubricating oils, accounting for anywhere from 75% to 90% of the formulation in engine oils for passenger cars or heavy-duty vehicles. The properties of different base oils vary significantly from one another, which can greatly influence the performance of the lubricating oil. Additives are required to enhance the performance of base oils and to impart additional beneficial characteristics to the lubricating oil, such as wear resistance and detergency.

Names and characteristics of different base oils

Some of the first issues we’ll encounter are about how to distinguish between the names and characteristics of different base oils available on the market.

To ensure that switching between different base oils does not adversely affect the performance of engine oil products, the American Petroleum Institute (API) has categorized base oils into five major types.

Class I oils, Class II oils, and Class III oils—paraffinic base oils refined from crude oil; the sophistication of the processing technology increases progressively from Class I oils to Class II oils and then to Class III oils.

Class III oils—also include synthetic base oils, such as liquid hydrocarbons derived from gas-to-liquids (GTL), coal-to-liquids (CTL), or biomass-to-liquids (BTL).

Class IV oils—specifically, polyalphaolefins (PAOs) synthesized from ethylene derivatives (olefins C8/C10/C12).

Class V oils—including other base oils such as synthetic esters or polyalkylene glycols (PAGs) as well as cycloparaffins—are obtained from cycloparaffinic crude oil through conventional refining processes.

Based on other characteristics, such as kinematic viscosity at 100°C (KV100), viscosity index (VI), and processing technology, several other names are also used in the base oil market:

Kinematic viscosity at 100℃—used to distinguish between “light,” “heavy,” and “bright oils,” and correlated with base oil designations. For example, PAO 4 refers to a Class IV light oil with a kinematic viscosity of 4 centistokes at 100℃.

The meaning of SN—According to the processing technology, Class I base oils are distinguished by the symbol SN (neutral solvent). For example, SN150 indicates a Class I oil with a kinematic viscosity of 5 centistokes at 100℃.

‘Synthetic’—a synthetic concept used to distinguish synthetic base oils, such as GTL or PAO.

‘+’—Recently, base oils with high VI that fall outside the API definition range are marked with the ‘+’ symbol. For example, a Class II oil + indicates a VI greater than 110, while a Class III oil + indicates a VI greater than 130.

The key lubricating performance characteristics of base oils—such as antioxidant stability, volatility, friction, and low-temperature performance—improve as the oil grade increases from Group I to Group IV. The only exception is solvency, which decreases as the content of saturated hydrocarbons increases.

Blending and Use of Base Oils

Another set of questions we often hear concerns the blending and use of base oils. We’re frequently asked how the composition of blended base oils changes when formulating engine oils, and why base oil consumption varies from one region to another.

Performance is clearly the primary criterion to consider when selecting a base oil. For example, top-grade motor oils (such as SAE 0W-X oils) are required to deliver outstanding static and dynamic viscosity performance both at high and low temperatures. Such lubricants need to be formulated using high-quality base oils—for instance, Group III base oils plus PAO—used at least as corrective additives.

For lower-performance lubricating oils, there are numerous base oil options available on the market. In these applications, the selection of base oils is typically influenced by factors such as supply reliability and overall formulation costs, and these factors may vary from region to region. For example, over the past 10 years, in North America, lubricants of medium specifications and below have been formulated using Group II base oils, whereas in Europe, a blend of Group I and Group III base oils has been employed—this choice being largely determined by the availability of these base oils in different regions.

Based on API categories and end-use applications, rules for interchangeability among base oils—known as BOI—are provided. For example, lubricant blending plants have limited flexibility in interchanging Class III oils for on-vehicle applications certified by OEM automakers, whereas they enjoy greater flexibility when using Class I oils—for instance, in lubricant formulations designed for SAE 20W-X viscosity grades.

More environmentally friendly base oil

We’ve also observed a growing market interest in so-called “green and environmentally friendly” base oils—namely, recycled base oils and bio-based base oils. The feedstock for recycled base oils is waste oil, which is processed through a combination of physical and chemical methods to yield higher-value lubricant oils. The resulting products are typically classified as Group I and Group II oils. However, the continually improving quality of automotive lubricants is increasingly reflected in the quality of used oils, making recycling plants a potential new source of supply for Group III oils. There are examples of combinations involving Group III oils plus bio-based base oils—these bio-based base oils are usually produced by facilities that utilize sugarcane, soybeans, and other renewable agricultural, marine, and forestry materials.

The supply and demand for these base oils remain relatively small compared to those of conventional base oils. However, demand is expected to grow as the impact of sustainability-driven factors on the base oil market continues to increase.

Market Drivers and Trends

Finally, we also received several questions about the key drivers and trends affecting the base oil market.

The base oil market is influenced by demand factors—factors that are identical to those driving the development of the lubricants industry. In addition, it is also driven by supply factors, which largely depend on the dynamic conditions of facilities equipped with base oil units (such as refineries or chemical plants).

In terms of demand trends, the shift toward high-quality base oils is driven by increasingly stringent requirements regarding the fuel economy performance of lubricants, oil drain intervals (ODI), and environmental emission standards.

To some extent, Class I oils may phase out of the automotive sector, while demand for Class II and Class III oils is expected to continue growing.

In terms of sales trends, demand is driven by economic growth, particularly in Asia. At the same time, it is being offset by longer oil-change intervals (ODI) and the increasing adoption of electric vehicles (EVs) in the automotive industry. By the 2030s, electric vehicles could have an even greater impact than they do today.

In terms of supply trends, the expansion and rational distribution of base oil capacity are significantly influenced by interactions with fuel-processing units, since only 1% of each barrel of crude oil ultimately becomes base oil. For example, the new regulations on low-sulfur marine fuels (IMO 2020) are expected to intensify competition for feedstock between base oil producers and fuel-processing units. This could mean that Class I oil plants are more vulnerable to the effects of rationalized distribution, as, in general, Class I plants have lower profitability and less flexibility compared to Class II plants. However, the expansion of base oil capacity could also present opportunistic opportunities: for instance, when a refinery invests in a large-scale fuel catalytic cracking unit (FCC), it can acquire feedstock and technology that can be repurposed for new Class II/III oil plants.

These demand and supply trends have led to a short-term oversupply in the base oil market, although some variations remain across API grades and regions. On the one hand, some end-users are opting to use higher-quality base oils—even when it’s not technically necessary—perhaps in an effort to enhance performance or streamline logistics. On the other hand, refineries are shifting feedstocks, or even base oils themselves, toward fuel production, resulting in an increasingly fragmented quality landscape.

It is currently unclear how quickly or to what extent sustainability factors will affect the current supply and demand dynamics in the base oil industry.