Transformer Oil Market

Market Definition

The global Transformer Oil Market was valued at USD 3.39 billion in 2023 and is predicted to reach USD 5.99 billion by 2030 with a CAGR of 8.50% from 2024 to 2030.

Transformer oil, also known as insulating oil is stable at high temperatures and possesses excellent properties of electrical insulation. It is a cooling oil derived from crude petroleum and its primary functions are to insulate and cool a transformer. Therefore, the oil possesses high dielectric strength, thermal conductivity, and chemical stability. It is widely used in oil-filled transformers of high-voltage capacitors, fluorescent lamp ballasts, and in high-voltage switches & circuit breakers 

Market Dynamics and Trends

The market is witnessing a surge in demand due to the rising demand for transmission and distribution of electricity across industrial, commercial, and residential sectors as transformer oil is used to insulate transformers, capacitors, switches, and circuit breakers. Also, the growing electrification of railways and the surging construction of metros in urban areas are expected to support the transformer oil market growth. In addition, various governments across the world are taking initiatives to implant electricity facilities in rural areas, which is expected to further propel the growth of the global industry during the forecast period.

For instance, in April 2022, the Government of India announced its plans to provide 24x7 power supply to all rural households and industrial & commercial consumers with the help of its different schemes including Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS). The rising demand for dry transformers and environmental concerns associated with the usage of high-density polyethylene during their production and degradation process are expected to restrain the growth of the transformer oil market. On the contrary, increasing cross-border electricity trade is expected to create ample growth opportunities for the market in the coming years.

Market Segmentations and Scope of the Study

The transformer oil market report is classified on the basis of oil type, application, end-user, and geography. On the basis of oil type, the market is segmented into mineral, bio-based, and silicone. The mineral is sub-segmented into naphthenic and paraffinic. On the basis of application, the market is bifurcated into transformer, switchgear, and reactor.  On the basis of end-user, the market is divided into transmission & distribution, power generation, railways & metros, and others. Geographic breakdown and analysis of each of the aforesaid segments include regions comprising North America, Europe, Asia-Pacific, and Row.

Geographical analysis

Asia-Pacific held the predominant share of the transformer oil market in 2021 and is expected to continue its dominance during the forecast period.  The presence of high electrical power-consuming countries such as China, Japan, and India is expected to boost the growth of the market. According to NS ENERGY, as of 2020, China tops the world’s list in electricity consumption, using more than 6.3 trillion kilowatts of energy per hour annually. Moreover, the presence of a wide range of industries in the region leads to the consumption of electricity which will in turn propel the market growth.

North America is expected to show steady growth in the market during the forecast period, due to the presence of a large number of nuclear power plants in countries including the U.S. and Canada.  For instance, in April 2022, U.S. Energy Information Administration announced that at the end of 2021, the United States had 93 operating commercial nuclear reactors at 55 nuclear power plants in 28 states. In addition, the growing transmission and distribution (T&D) investments in the region are further expected to propel the demand for transformer oil in this region.

For instance, in May 2022, the U.S. government planned a $2.5bn fund to modernize and expand the capacity of the country’s power grid under the Transmission Facilitation Program (TFP). As per this program, the U.S. Department of Energy (DOE) was allowed to borrow up to $2.5bn to help the construction of new and upgraded high-capacity transmission lines via three financing tools. These include loans from the department, DOE’s participation in public-private partnerships, and capacity contracts with eligible transmission projects in which it will serve as an anchor customer. Such initiatives are projected to further drive the growth of the North American market.

Competitive Landscape

The transformer oil industry comprises various market players such as Calumet Inc.,Cargill Incorporated,NYNAS AB,Ergon Inc.,Eden Transformer Oil Ltd,Hydrodec Group Plc,PetroChina Company Limited,San Joaquin Refining Co. Inc.,China Petroleum & Chemical Corporation,Valvoline Global Operations. These market players are adopting various business strategies including product launches and partnerships across various regions to maintain their dominance in the global market.

For instance, in October 2021, Nynas launched a new range of naphthenic specialty oils for sealant formulators. The oil offers cost-effective replacements for silicone fluids while reducing problems related to microbial growth and maintaining the right balance between viscosity, volatility, and color stability. In addition, in May 2021, Calumet Specialty Products Partners, L.P. and Aevitas Inc announced a partnership to bring improved access to premier transformer oil products in the Canadian market.

Key Benefits

• The transformer oil market report provides a quantitative analysis of the current market and estimations through 2022-2030 that assists in identifying the prevailing market opportunities to capitalize on.

• The study comprises a deep dive analysis of the global market trend including the current and future trends for depicting the prevalent investment pockets in the market.

• The information related to key drivers, restraints, and opportunities and their impact on the market is provided in the report.

• The competitive analysis of the market players along with their market share in the transformer oil market.

• The SWOT analysis and Porter’s Five Forces model are elaborated in the study.

• Value chain analysis in the market study provides a clear picture of the stakeholders’ roles.

Transformer Oil Market Key Segments

By Oil Type

• Mineral

  • Naphthenic

  • Paraffinic

• Biobased

• Silicone

By Application

• Transformer 

• Switchgear 

• Reactor

By End-user

• Transmission & Distribution

• Power Generation

• Railways & Metros

• Others

By Geography

• North America

  • U.S.

  • Canada

  • Mexico

• Europe

  • UK

  • Italy

  • Germany

  • Spain

  • Netherlands

  • Rest of Europe

• Asia-Pacific

  • China

  • Japan

  • India

  • Australia

  • South Korea

  • Taiwan

  • Vietnam

  • Rest of Asia Pacific

• RoW

  • Latin America

  • Middle East 

  • Africa

Report Scope and Segmentation

Parameters	Details
Analysis Period	2023–2030
Base Year Considered	2023
Forecast Period	2024–2030
Market Size Estimation	Billion (USD)
Market Segmentation	By Oil Type (Mineral, Biobased, Silicone) By Application (Transformer, Switchgear, Reactor), By End-User (Transmission & Distribution, Power Generation, Railways & Metros, Others)
Geographical Segmentation	North America (U.S., Canada, Mexico) Europe (Germany, UK, Spain, Italy, Netherlands, Rest of Europe), Asia-Pacific (Australia, China, India, Japan, South Korea, Vietnam, Taiwan, Rest of Asia-Pacific), Rest of the World (Latin America, Middle East, Africa)
Companies Profiled	Calumet Specialty Products Partners, L.P., Cargill, Incorporated, Nynas AB, Ergon, Inc, Eden Transformer Oil Ltd, Hydrodec Group plc, PetroChina Company Limited, San Joaquin Refining Co. Inc., Sinopec, Valvoline, Engen Petroleum Ltd.

Key Players

• Calumet Inc.

• Cargill Incorporated

• NYNAS AB

• Ergon Inc.

• Eden Transformer Oil Ltd

• Hydrodec Group Plc

• PetroChina Company Limited

• San Joaquin Refining Co. Inc.

• China Petroleum & Chemical Corporation

• Valvoline Global Operations