Transformer Oil Market Size Expected to Witness a Healthy Growth at a CAGR of 8.0% by 2032

The global transformer oil market share is anticipated to witness a robust CAGR of 8.0% throughout the forecast period from 2022 to 2032. The global market reached a valuation of US$ 4,021.7 Million in 2022 to surpass a valuation of US$ 8,703.2 Million by 2032. As per the historical analysis conducted by Future Market Insights, the global transformer oil market witnessed robust growth at a CAGR of 6.4% between 2017 and 2021. A substantial increase in global power consumption is expected to boost the demand for transformer oil over the assessment period.

Augmenting demand for continuous power supply from diverse industries and its increasing adoption is likely to offer fault-free operations of power transformers. These factors are anticipated to accelerate the demand for transformer oil in the near future. The growth in the market is underpinned by an increasing number of power generation and distribution projects across the globe. The market is expected to witness high growth owing to expansion in the power sector, and the development of electric grids across emerging economies such as India. China, and others.

According to Future Market Insights (FMI), the East Asian region is anticipated to dominate the global transformer oil market. This is owing to significant growth in the manufacturing and industrial sector, rising consumption of electricity, and an increasing number of power generation and distribution projects. Based on these factors, the global demand for transformer oil is expected to account for about 3.2% of the specialty oil business.

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Report Highlights

One of the most preferred transformer oils is naphthenic mineral oil due to its high efficiency, easy availability, and its useful chemical properties such as good pour point at low temperatures and exceptional thermal cooling capacity. The adoption of paraffinic mineral oil had gained traction over the years, owing to its excellent oxidation stability.

Owing to the rising shift toward sustainable energy resources and strict rules laid down by the governments concerning environmental issues, several leading players in the transformer oil industry are focusing on making eco-friendly products, aiding the growth of the market.

Recent Developments

Both paraffinic and naphthenic variants of the mineral oil are produced of highly refined, purified, and processed petroleum, thus being highly non-biodegradable. The mineral oil is characterized by biodegradability ranging from 0 – 40% and is sourced from a non-renewable resource.

Various developed and developing economies such as India, China, and the U.S. among others are making a transition towards adopting green and environmentally friendly technologies. This transition might hinder the adoption of mineral-based transformer oils over the upcoming decade, and become a restraint to the mineral oil market over the long run.

The demand for bio-based transformer oil is anticipated to propel as it is produced from vegetable feedstocks and is considered a brilliant replacement for mineral oil-based products. Bio-based transformer oil is also bio-degradable and does not contain silicone, petroleum hydrocarbons, and halogens.

Since it is one of the best suitable options with eco-friendly properties and superior performance, therefore, industry operators that produce bio-oil are anticipated to gain prominence in the transformer oil market over the forecast period.

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Competitive Landscape

Key players operating in the global transformer oils market are focusing on acquisition to expand their consumer base. Further, they are also adopting strategies including, capacity expansions, and geographical expansions in emerging economies to strengthen their foothold in the market. Key players are also investing in research and innovations for product development and also the introduction of sustainable products to minimize the carbon footprint.

• In May 2022, Nynas AB partnered with KONCAR, Croatia’s leading manufacturer of instrument transformers to conduct a test of its NYTRO® BIO 300X on KONCAR’s instrument transformers.
• In May 2022, Saudi Aramco Base Oil Company – Luberef signed a Memorandum of Understanding (MOU) with APAR Industries Limited to build a Transformer Oil/White.

Transformer Oil Market Segmentation

By Oil Type:

• Mineral Oil
  • Paraffinic
  • Naphthenic
• Silicone Oil
• Bio-based Oil

By Application:

• Transformer
• Switchgear
• Reactor

By End Use Industry:

• Transmission & Distribution
• Power Generation
• Railways & Metros

By Region:

• North America
• Latin America
• Europe
• East Asia
• SAPeI
• Middle East & Africa
• India

More Insights into the Transformer Oil Market

China is expected to dominate the global transformer oil market over the projection period. The growth of the nation is attributed to the rising applications in diverse industries, including power generation. China is expected to witness growth at an impressive rate of about 8.9% CAGR between 2022 and 2032.

India is expected to remain one of the fastest-growing markets for the consumption of transformer oil all across the globe. The country is expected to be the third largest consumer of electricity.