Ege Kaan Soysal
The global energy industry is undergoing a multilayered transformation as it seeks to maintain the security of oil and natural gas supplies while refining technologies, industrial efficiency and sustainable production models are being reshaped. At the centre of this transformation are not only the production and trade of crude oil, but also the creation of greater added value from hydrocarbon resources, advanced refining technologies, high-performance base oils and the strategic role of industrial lubrication systems.
In the traditional energy economy, the main determinants of competitiveness were the size of reserves, production capacity and international transport infrastructure. Today, these are joined by refinery flexibility, product quality, supply-chain resilience, carbon intensity and technological expertise. As a result, assessing the future of the oil industry solely through daily production volumes or Brent prices is insufficient to explain the structural transformation underway in the sector.
The International Energy Agency’s (IEA) Oil 2025 report projects that global oil demand could level off at around 105.5 million barrels per day by 2030. The same report indicates that, from 2026 onward, the petrochemical sector will become the main source of growth in oil demand. These projections suggest that oil’s economic value should increasingly be assessed not only in terms of fuel consumption, but also through industrial feedstocks and high-value product chains. [1]
From this perspective, base oils and industrial lubricants are not secondary products of the global energy transition; they are critical technological components for energy efficiency, equipment reliability and industrial competitiveness.
From Geopolitical Risks to Industrial Costs: New Dynamics in Oil Pricing
Global oil prices are influenced not only by supply-and-demand balances, but also by geopolitical risks, strategic maritime chokepoints, sanctions regimes, refinery capacity and international trade flows. In particular, security risks along the Strait of Hormuz and Red Sea routes put pressure not only on crude oil prices, but also on freight, insurance, product availability and delivery times. According to the IEA’s Oil Market Report dated 14 October 2026, the average price of North Sea Dated crude rose to USD 116.89 per barrel in September 2026. At the time the report was published, the price was approximately USD 134. The same report projected that global refinery throughput would average 81.7 million barrels per day in 2026, a decrease of 2.3 million barrels per day compared with the previous year. [2]
These figures show that geopolitical volatility in the oil market is reflected not only in raw-material prices, but also in refining economics and the international trade of refined products.
However, an important technical distinction must be made from the perspective of the lubricants industry: changes in crude oil prices are not reflected in base oil prices at the same rate or on the same timeline. Base oil pricing is jointly determined by the availability of suitable feedstock streams, refinery configuration, product group, hydrogen and energy costs, production capacity, regional supply-and-demand balances and logistics conditions.
For this reason, industrial purchasing and supply strategies cannot rely solely on oil price indices. Particularly for long-term industrial projects, base oil quality, producer continuity, delivery reliability and total cost of use should be assessed together.
Geopolitical uncertainty in energy markets calls for a new management approach to industrial lubricants: securing the lowest purchase price matters, but so does obtaining the right product with the correct technical specifications through a predictable supply model.
A New Competitive Arena in Refining: From Volume to Added Value
The transformation of the global refining industry is one of the developments that deserves close attention when considering the future of the lubricants sector. According to the IEA’s Oil 2025 projections, 4.2 million barrels per day of new refining capacity are expected to come online worldwide by 2030, while 1.6 million barrels per day of capacity are expected to close. The same study projects that demand for refined products will peak at approximately 86.3 million barrels per day in 2027. [1]
These developments indicate that refinery investments will increasingly depend not only on capacity, but also on product portfolios, process efficiency and the ability to manufacture higher-value products.
Base oil production is an important part of this transformation. Traditional solvent refining, hydroprocessing and advanced hydrocracking technologies make it possible to produce base oils with different properties. However, a refinery’s technical success should be assessed not only by the volume of base oil it produces, but also by how it manages energy consumption, hydrogen use, product losses and operating costs while achieving the targeted quality grade.
In the base oil classification used by the American Petroleum Institute (API), Groups I, II and III are distinguished by key parameters such as saturated hydrocarbon content, sulphur content and viscosity index. Group IV covers polyalphaolefins (PAOs), while Group V includes other types of base oils. API 1509 also recognises that base oils can be produced using different methods, including solvent refining, hydrotreating and re-refining. [3]
This technical classification matters not only for product nomenclature, but also for suitability for industrial applications and expected performance.
For example, with appropriate formulations, Group II and III base oils can offer advantages in applications requiring high oxidation stability and enhanced performance, while Group I base oils remain important in certain industrial formulations because of their solvency characteristics and application requirements. Technological progress therefore does not mean that all applications should move towards a single base oil group.
The real competitive advantage lies not in using the most advanced technology under all circumstances, but in matching the right base oil chemistry with the right additive technology and industrial application.
This approach is also important when assessing refining efficiency. Achieving a higher quality grade alone does not prove that production is more sustainable. Energy intensity, the source of the hydrogen used, process efficiency, product service life and environmental impacts across the life cycle must all be analysed together.
Technical Performance and Asset Management in Industrial Lubricants
Assessing the economic value of industrial lubricants solely on the basis of purchase price is inconsistent with the requirements of modern plant management. Lubricants used in hydraulic systems, compressors, turbines, gearboxes and heavy industrial equipment play critical roles in friction control, heat transfer, wear reduction and system reliability.
In these systems, lubricant performance is the combined result of base oil quality, additive chemistry, operating temperature, load conditions, contamination levels and maintenance practices.
Two parameters are particularly fundamental to industrial lubricant selection: viscosity behaviour and oxidation stability.
Viscosity is one of the key parameters in forming a suitable oil film between moving surfaces. ASTM D445 specifies methods for measuring the kinematic viscosity of petroleum products and demonstrates the importance of selecting the correct viscosity for equipment operation. [4]
Oxidation stability is especially important in systems operating at high temperatures or over extended service intervals. Oxidative degradation of oil can lead to the formation of acidic compounds, deposits and other degradation products that may adversely affect performance. However, service life does not depend solely on the oxidation resistance of the base oil; additive-package durability, water and particulate contamination, and actual operating conditions must also be considered.
At this point, oil analysis becomes more than a supporting maintenance activity: it becomes part of the decision-making process in asset management. Regular sampling, monitoring viscosity changes, assessing particulate and water contamination, and analysing wear metals where appropriate all help track equipment health.
The life-cycle-oriented asset management approach set out in ISO 55000:2024 is consistent with this assessment. The standard focuses on the systematic management of physical assets in line with organisational objectives and on creating value throughout their life cycles. [5]
Consequently, in modern industrial facilities, lubrication strategy should be treated not merely as an operational responsibility of the maintenance department, but as a management decision affecting business continuity, energy efficiency and total cost of ownership.
Circular Economy and Re-Refining: The Technical Dimension of Sustainability
One area gaining increasing importance on the lubricants industry’s sustainability agenda is the re-refining of used oils and their reuse in the production of high-quality base oils.
Appropriate collection, pretreatment and advanced refining of used oils make it possible to return valuable hydrocarbon components to the economic cycle.
The U.S. Department of Energy’s December 2020 report, Used Oil Management and Beneficial Reuse Options, indicates that re-refining used oils can help conserve natural resources, reduce environmental risks associated with improper disposal of waste oils and, under certain conditions, save energy. [6]
The technical performance of re-refined base oils should not be judged solely by their source. When produced through suitable processes and able to meet the required quality criteria, re-refined base oils can be assessed against the same industrial performance requirements as virgin base oils. Nevertheless, the suitability of the finished lubricant must be verified not only by the base oil group, but also through relevant performance tests on the complete formulation and compliance with equipment manufacturer requirements.
The same technical discipline is required when evaluating sustainability. The environmental advantage of a re-refined product should not automatically be assumed to be the same under all conditions. Variables such as collection distances, process energy consumption, product yield, waste management and energy sources must be included in a life-cycle assessment.
In this context, the circular economy is not simply about reusing waste; it is about managing material efficiency, industrial resource security and production technologies in an integrated way.
Energy Efficiency and Industrial Competitiveness
According to the IEA’s Energy Efficiency 2025 report, industry accounted for approximately 40% of global final energy consumption in 2024. The report notes that process optimisation, material efficiency, improvements to motor systems and digital technologies offer significant opportunities to improve energy efficiency in industry. [7]
Within this broader transformation, the contribution of industrial lubrication technologies should be assessed in light of the technical characteristics of each application. Selecting the right lubricant, using an appropriate viscosity and applying effective maintenance practices can help limit friction-related losses in some mechanical systems. However, the scale of this contribution varies according to equipment type and operating conditions; stating a general energy-saving percentage without measurement is not technically sound.
The strategic importance of industrial lubricants becomes clear here. Energy efficiency, equipment reliability and maintenance costs should not be assessed in isolation. Solutions that enable longer maintenance intervals, lower failure risk and more stable operational performance in production facilities create genuine economic value only when their technical suitability is confirmed by field data.
This approach is particularly important for large-scale infrastructure, energy and industrial investments, where assessment must extend beyond initial capital expenditure. Coordinating procurement decisions with engineering, operations and maintenance teams, preparing performance-based technical specifications and taking life-cycle costs into account are all important to organisational efficiency.
References
- International Energy Agency (IEA), Oil 2025 – Analysis and Forecast to 2030, 17 June 2025. https://www.iea.org/reports/oil-2025
- International Energy Agency (IEA), Oil Market Report – October 2026, 14 October 2026. https://www.iea.org/reports/oil-market-report-october-2026
- American Petroleum Institute (API), API 1509 – Engine Oil Licensing and Certification System, 24th Edition, July 2026, September 2026 amendment. https://www.api.org/products-and-services/engine-oil/documents/api-1509-documents
- ASTM International, ASTM D445-26 – Standard Test Method for Kinematic Viscosity of Transparent and Opaque Liquids, 2026. https://store.astm.org/standards/d445
- International Organization for Standardization (ISO), ISO 55000:2024 – Asset Management: Vocabulary, Overview and Principles, 2024. https://www.iso.org/standard/83053.html
- U.S. Department of Energy, Used Oil Management and Beneficial Reuse Options to Address Section 1: Energy Savings from Lubricating Oil, December 2020. https://www.energy.gov/articles/department-energy-issues-report-management-and-beneficial-reuse-used-lubricating-oil
- International Energy Agency (IEA), Energy Efficiency 2025 – Industry, 2025. https://www.iea.org/reports/energy-efficiency-2025/industry
