Saudi Arabia Lubricants Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS (2025 - 2030)

Saudi Arabia Lubricants Market Trends

Rising Automotive Population in the Country

The automotive industry in Saudi Arabia has emerged as one of the fastest-growing sectors both domestically and within the Middle East region, driven by the government's Saudi Vision 2030 initiative. The country witnessed remarkable growth in vehicle sales across various segments in 2022, with passenger car sales increasing by 9.2% and commercial vehicle sales surging by 20.2% compared to 2021. The overall automotive sales in the country reached 616,491 units in 2022, representing a substantial increase of approximately 10.8% from the previous year. This growth has been further supported by transformative policies, such as the 2018 law allowing women to drive, which has significantly expanded the potential customer base for automotive sales as more women register for driving licenses.

The Saudi government has implemented various strategic initiatives to boost the local automotive population and manufacturing capabilities. In January 2023, the Saudi Ministry of Industry and Mineral Resources signed a memorandum of understanding with Hyundai Motor Company to promote the automotive industry in the Kingdom. Additionally, the government has established Special Economic Zones (SEZs) with attractive incentives, such as in King Abdullah Economic City, Makkah, where automobile setups receive a 5% corporate income tax for up to 20 years, 0% withholding tax and customs duties for goods inside the SEZ, and 0% VAT. Further strengthening this commitment, in July 2023, Saudi Arabia signed MoUs with Rigel and Clevon to develop automotive manufacturing and autonomous vehicle technology, while in June 2023, the Ministry of Investment partnered with Chinese autonomous driving technologies manufacturer Human Horizons to establish a joint venture for local automotive research, development, manufacturing, and sales. The increasing number of vehicles also boosts the demand for engine oil and transmission fluid, essential for maintaining vehicle performance.

Increasing Demand for Turbine Oil & Greases in the Power Generation Sector

Saudi Arabia is experiencing a significant transformation in its energy sector, marked by substantial investments and expansion initiatives in power generation infrastructure. The government, as part of Saudi Vision 2023, has outlined plans to invest approximately USD 270 billion in the power sector, focusing on boosting and expanding clean energy generation capacity across the country. This massive investment drive is complemented by specific project developments, such as the planned development of ten renewable energy projects with a total power capacity of 7 GW announced in December 2022. Additionally, in May 2023, through the Public Investment Fund (PIF) and ACWA Power, the government invested USD 3.25 billion in three solar projects, which are expected to have a combined capacity of around 4.55 GW, capable of powering nearly 750,000 households in the country.

The power generation sector's expansion is further evidenced by significant infrastructure investments and partnerships with global industry leaders. In June 2023, Saudi Electricity Co. committed to investing USD 373 million in three projects aimed at boosting the power grid and maximizing network efficiency in the region. The sector has also attracted major international players, with Mitsubishi Power having delivered 11 gas turbine plants to Saudi Aramco, with plans for further expansion of the region's power generation capacity. Additionally, in June 2023, a collaborative initiative between General Electric, Saudi Electricity Company (SEC), and Aramco was announced to enhance existing power generation assets' efficiency, flexibility, reliability, availability, and lifespan. These developments and investments in expanding the power generation sector are driving the demand for industrial lubricants, particularly industrial oil, grease, and turbine oil in the country.

Segment Analysis: By End User

Automotive Segment in Saudi Arabia Lubricants Market

The automotive segment continues to dominate the Saudi Arabia lubricants market, holding approximately 60% market share in 2024. This significant market position is primarily driven by the country's expanding automotive sector and increasing vehicle population. The segment's growth is further supported by Saudi Arabia's Vision 2030 initiatives, which have led to various automotive manufacturing projects in the country. In 2024, Toyota maintained its leadership position in the Saudi automotive market, while other major manufacturers like Hyundai and Nissan also contributed significantly to the lubricant demand. The introduction of new automotive manufacturing facilities, including Lucid Motors' assembly plant in King Abdullah Economic City (KAEC) and the Saudi government's commitment to purchase up to 100,000 vehicles over ten years, has further strengthened the automotive lubricants segment's market position.

Industrial Segment in Saudi Arabia Lubricants Market

The industrial segment in the Saudi Arabia lubricants market is projected to experience robust growth during 2024-2029, driven by increasing investments in power generation, heavy equipment, and metallurgy sectors. The segment's growth is particularly supported by Saudi Arabia's ambitious plans to invest nearly USD 270 billion in the power sector, aiming to boost and expand clean energy generation capacity. The development of ten renewable energy projects with a total power capacity of 7 GW and significant investments through the Public Investment Fund (PIF) and ACWA Power in solar projects are creating substantial demand for industrial lubricants. Additionally, the expansion of industrial activities in metallurgy, manufacturing, and construction sectors is further propelling the demand for specialized industrial lubricants, including hydraulic fluids, turbine oils, and metalworking fluids.

Segment Analysis: By Product Type

Engine Oils Segment in Saudi Arabia Lubricants Market

Engine oils dominate the Saudi Arabia lubricants market, accounting for approximately 64% of the total market volume in 2024. This segment's prominence is driven by the growing automotive sector in Saudi Arabia, particularly the increasing vehicle population and the government's initiatives to boost domestic automotive manufacturing. The segment offers various types of engine oils including mineral oils, semi-synthetic oils, and fully synthetic oils, each serving different vehicle specifications and performance requirements. The demand is further supported by the country's expanding transportation sector and the need for regular oil changes in the existing vehicle fleet. Engine oils in Saudi Arabia are primarily used in passenger vehicles, commercial vehicles, and industrial equipment, with major players like Shell, ExxonMobil, and Saudi Aramco offering specialized products for different applications.

Transmission & Gear Oils Segment in Saudi Arabia Lubricants Market

The transmission and gear oils segment is projected to experience the fastest growth in the Saudi Arabia lubricants market during 2024-2029, with an expected growth rate of approximately 5%. This growth is primarily attributed to the increasing demand from both automotive and industrial sectors, where these oils play a crucial role in ensuring smooth operation of transmission systems and gearboxes. The segment's growth is further supported by the rising adoption of advanced transmission systems in modern vehicles and industrial machinery. The increasing focus on preventive maintenance practices in industrial operations and the growing awareness about the importance of using high-quality transmission fluids for vehicle performance and longevity are also contributing to the segment's expansion.

Remaining Segments in Product Type Segmentation

The other segments in the Saudi Arabia lubricants market include hydraulic fluids, metalworking fluids, greases, and other specialty products. Hydraulic fluids represent a significant portion of the market, driven by their extensive use in industrial machinery and construction equipment. Metalworking fluids, though smaller in volume, play a crucial role in manufacturing and metalworking operations. Greases serve various applications across automotive and industrial sectors, particularly in bearing applications and heavy machinery. The other specialty products category includes various application-specific lubricants such as process oils, turbine oils, and transformer oils, each serving specific industrial needs and contributing to the overall market diversity.

Segment Analysis: By Distribution Channel

Distributors Segment in Saudi Arabia Lubricants Market

The distributors segment dominates the Saudi Arabia lubricants market, accounting for approximately 98% of the total market volume in 2024. This segment encompasses various distribution channels including OEM-owned service shops, retailers, and petrol pumps/fuel stations. Retailers hold the largest share within the distributor segment, followed by petrol pumps/fuel stations and OEM-owned service shops. The strong presence of distributors is supported by well-established networks of authorized distributors maintained by major manufacturing firms like Shell Plc, Exxon Mobil Corporation, and others. These distributors supply lubricants to retailers, who then offer products to mechanics shops and end-use customers. Most retailers in Saudi Arabia maintain partnerships with lubricant manufacturers and undergo extensive training about product specifications and benefits. The segment's dominance is further reinforced by the Saudi government's focus on supporting mini and micro enterprises, creating substantial growth opportunities for lubricant sales through retail distribution.

Online Distribution Segment in Saudi Arabia Lubricants Market

The online distribution segment is emerging as the fastest-growing channel in the Saudi Arabia lubricants market, driven by increasing adoption of e-commerce platforms and digital marketplaces. This growth is attributed to the low operational costs involved in marketing and sales through online channels, making it an attractive option for manufacturers. Companies like EPCCO Lubricants have partnered with regional digital marketplaces like noon.com to offer their range of Caltex and ENOC automotive and industrial lubricants products. Petromin Corporation has been a pioneer in online lubricant sales in the country, operating through its B2B e-commerce platform Petstore.Petromin.com since 2016. The segment's growth is primarily driven by industrial consumers, though individual consumers still largely rely on local distributors. The relatively low volume of DIY enthusiasts in the country currently contributes to the slower adoption of online lubricant sales in the retail sector, but this is expected to change with increasing digital transformation initiatives in the kingdom.