Process Oils Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Process Oils Market Trends and Insights

Rising Polymer And Synthetic Rubber Capacity Additions

Evonik's new polybutadiene unit in Shanghai, which came online recently, has boosted the captive demand for low-viscosity process oils. Meanwhile, Dow's utilization rate indicates a tightening market, prompting debottlenecking efforts linked to multi-year supply contracts with integrated refiners. Naphthenic grades gain share as solution-polymerized rubber formulas need superior solvency, and Asian producers leverage co-located feedstock to secure margins. These dynamics enlarge the addressable base for the process oil market, reinforcing mid-term growth. Merchant refiners without captive base oil streams face thinner spreads, pushing them toward specialty niches or import strategies.

Elevated Demand From High-Performance Tire Formulations

China’s tire production has seen significant growth, with premium radial categories incorporating process oils per compound, signaling a strong demand. While premium segments embrace "green" tires, which utilize silica to reduce rolling resistance, these innovations hinge on treated distillate aromatic extract (TDAE) or bio-based substitutes. These substitutes must adhere to a PAH ceiling, a benchmark now adopted by global OEMs. Meanwhile, in South Asia and Africa, bias-ply and off-road tires continue to favor more affordable aromatic extracts. This choice not only highlights a geographic arbitrage but also bolsters legacy capacities in those regions. As tire formulations evolve, they introduce a broader spectrum of grade requirements, ensuring the process oil market remains closely tied to the automotive industry's rhythms.

Growth Of Naphthenic Oils In Metal-Working Fluids For EV Manufacturing

Electric-vehicle battery-pack machining requires fluids that maintain stable viscosity between 10-80 °C. Naphthenic oils not only meet this criterion but also come with inherently low levels of PAHs. A study published in the 2024 Journal of Cleaner Production highlighted that naphthenic-based blends boast an edge in cooling efficiency over their paraffinic counterparts. As global electric vehicle production is set to grow significantly by 2028, the demand for naphthenic fluids is expected to increase. The sensitivity of performance to these fluids overshadows fluctuations in feedstock prices, allowing for premium pricing and solidifying their specialty status in the larger process oil market.

Surging Personal-Care Formulations Using White Process Oils

As dermatology and baby-care brands eliminate trace aromatics, USP-grade white oils, compliant with FDA 21 CFR 178.3620(a), have become mainstream^{[1]U.S. FDA, “CFR Title 21 §178.3620,” fda.gov}. These highly refined grades see their market value uplifted even with modest volume gains. With middle-class consumers in China and India increasingly purchasing premium lotions, regional producers such as Idemitsu and H&R are responding by expanding their white-oil capacity. This shift not only underscores the growing demand but also broadens the market's reliance on process oils, moving beyond its traditional anchor in rubber.

Stringent PAH Limits On Aromatic Extracts In EU And North America

In response to REACH Annex XVII's ban on process oils containing benzo[a]pyrene and total PAHs above specified thresholds, tire companies have been forced to move away from conventional extracts^{[2]European Chemicals Agency, “REACH Annex XVII Entry 8,” echa.europa.eu}. Echoing these measures, North American regulators, via California statutes, set similar thresholds. This regulatory alignment, coupled with Shell's 2025 closure of its Pernis aromatics unit and ExxonMobil's 2023 exit from Beaumont, has led to a diminished supply of compliant TDAE. Consequently, spot TDAE prices increased, putting pressure on cost-sensitive compounders and stifling short-term growth in the process oil market.

Group I Base-Oil Refinery Shutdowns Tightening Feedstock Supply

Many Group I capacity vanished between 2023 and 2025 as Chevron, Phillips 66, Marathon, and HF Sinclair rationalized legacy units that failed modern lube specs. Because process oils are co-produced with Group I streams, Western supply tightened, and spot imports from South Korea or India attracted freight premiums. Integrated Asian refiners, flush with feedstock, expanded exports and widened their price lead, but long transit times expose buyers to volatility, tempering expansion of the process oil market in deficient regions.

Segment Analysis

By Type: Naphthenic Oils Capture Premium Applications

Naphthenic grades held 44.28% of the process oil market share in 2025 and are growing at a 6.03% CAGR, a rare blend of scale and velocity. Their cycloparaffinic structure delivers low-temperature fluidity and high solvency, making them indispensable in EV metal-working fluids and ultra-low-PAH tire treads. Paraffinic oils fill mid-range needs in rubber and polymers, while aromatic oils retain a foothold in bias-ply tires and asphalt in Asia-Pacific where enforcement is looser.  

Nynas, Ergon, and Calumet are investing in application labs to co-develop naphthenic solutions with tire makers, locking in long contracts that buffer them from crude swings. Abundant Group II and III paraffinic feedstock keeps paraffinic prices competitive, yet commoditization erodes margins. Should China and India adopt EU-equivalent PAH norms later this decade, significant aromatic demand could vanish, stranding assets in South Korea and Thailand. These cross-currents keep the process oil market fluid, rewarding flexible producers.

Note: Segment shares of all individual segments available upon report purchase

By Application: Rubber Dominates, Personal Care Accelerates

Rubber consumed 59.94% of volume in 2025, reflecting tires’ heavy reliance on extender oils to improve processability and flex-fatigue. Tire cycles remain tied to auto demand, so that macro softness can ripple through the process oil market size. Personal care posts a 4.92% CAGR as brands reformulate lotions and baby oils with FDA-certified white oils that eliminate allergenic residues. 

Polymers benefit from polyolefin additions in the Middle East, though PVC plasticizers face migration scrutiny that trims oil usage per ton of resin. Textile lubricants are sliding in Europe and North America as apparel shifts to Asia, but integrated mills in China source low-cost oils from Sinopec, maintaining baseline volumes. Together, these sub-sectors diversify the process oil market, dampening over-reliance on any single end use.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Asia-Pacific held 66.06% of the process oil market size in 2025 and is poised for a 2.94% CAGR through 2031. Integrated complexes at Maoming, Dalian, and Jinling co-produce base oils and process oils, giving Sinopec and PetroChina a delivered-cost edge. China's tire production consumes a significant amount of oil. Indian demand is rising as commercial fleets upsize, while South Korea and Japan export premium white oils for electronics and pharma niches. The region’s feedstock security and scale suggest its share could even inch higher, cementing leadership in the global process oil market.

After Group I closures at Beaumont, El Segundo, and San Francisco reduced annual capacity, North America grapples with structural shortages. While Calumet, HF Sinclair, and Ergon operate near full capacity, spot shortfalls have driven TDAE prices up. Although imports from South Korea help fill the void, they come with a hefty freight cost, squeezing buyer margins. With Canada boasting a smaller base-oil slate, its reliance on imports is set to continue, curbing volume growth in the process oil market.

Europe mirrors this pattern: Shell’s Pernis shutdown and Total’s Gonfreville conversion tightened supply even as tire demand from Michelin and Continental stayed firm. Compliance with REACH PAH limits has accelerated the move to hydro-treated paraffinic and naphthenic grades, lifting average unit values. South America and the Middle-East and Africa remain slender but rising outlets, thanks to Chinese tire manufacturers establishing plants in Brazil and South Africa. Freight economics make localized supply attractive, inviting investments by Petrobras and Sasol to capture regional slices of the process oil market.