StefanoZehnder, Vice President of ICISConsulting, expressed that as the demand transferred to the base oil products of class II and class III, competition of global base oil market will be more and more intense, and base oil supply will exceed demand in the 24th ICIS World Conference on Base Oil and Lubricating Oil held recently in London.

Zehnder showed it is predicted that the newly increased capacity would be 50% more than new demand for class II and III base oils by 2025. At the same time, the capacity reduction of class I base oil will be less than the reduction of class I base oil demand caused by the market share grab of class II and III base oil. Class II base oils will lead the growth, especially in Asia where the new base oil demand is mainly class II base oils.

ICIS predicted that global utilization of class I base oil capacity would decline by 15%, while class II and III base oil capacity utilization were likely to hold the line. European class I base oil installations are most at risk, while Asian class I base oil installations are likely to operate at lower operating rates.

ICIS estimated that demand for oil was expected to peak in the 2030s, with the bulk of future global demand coming from basic petrochemicals - alkenes and aromatic hydrocarbons. Demand for petrochemicals is expected to grow by an annual average of 2.8%, while demand for petroleum products is expected to grow by only an annual average of 0.6%.

Looking ahead to 2025, the US will remain the main supplier of class II base oil, while Europe and Asia will increasingly become self-sufficient. Europe's class I base oil capacity will fall sharply because it is the main source of the global oversupply of class I base oil. Global trade routes for basic oil will also change with production capacity and demand trends. US exports of class II base oil to Europe will decrease but those to Latin America will increase.