Global refrigeration oil market is slated to witness an upward growth trend over the next few years. The product demand will be primarily driven by the increased application in frozen food and pharmaceutical sectors. Rapid growth in the urban population and the shift in eating habits has augmented the consumption of packaged and ready-to-eat food products, which are perishable and need lower temperatures for storage. As a result, the adoption of refrigerators across homes, retails stores, supermarkets, and restaurants is surging. Pharmaceutical products also require low temperatures for storage and transportation, which is further driving the demand for refrigeration systems.
The refrigeration oil industry will benefit from the increasing demand for air conditioning systems in household settings, commercial buildings, as well as vehicles. Refrigeration oils are important for the correct functioning of the compressor. They act as lubricants for the compressor and reduce friction, wear and tear, and form a seal between the high- and low-pressure sides. High-quality of refrigeration oils is important as it is closely related to the long lifetime of refrigeration systems.
The demand for oils with suitable miscibility properties, flow characteristics, high thermal and chemical stability, and superior aging resistance will propel the refrigeration oil market forward over 2021-2027. Oils that are compatible with the refrigerant and can withstand extreme temperature differences will continue to witness demand in industrial, residential, and commercial environments.
By application, the air conditioner segment is expected to capture a notable share of the refrigeration oil industry. The adoption of energy-efficient air conditioners in household settings and commercial buildings is increasing owing to the changing climate and rising levels of temperature and humidity in many regions. With the growing trend of smart homes, the popularity of smart, connected air conditioning systems is also growing. The ongoing technological advances and the launch of sustainable AC systems will create a healthy product demand in the future.
Considering the end-users, the refrigeration oil market is projected to see substantial growth across the residential sector through 2027. This is owing to the increased disposable incomes of consumers in developing regions which has amplified the adoption of consumer household appliances such as refrigerators and air conditioners. The growth in urban population and the resulting residential expansion will continue to create promising opportunities for the market players.
In terms of region, North America refrigeration oil industry share is likely to grow at a notable pace over the next few years. Continuous developments and increasing R&D across the pharmaceutical sector is increasing the demand for refrigeration systems in laboratories. Additionally, these systems play a crucial role in prolonging drugs, vaccines, and other supplies. The ongoing COVID-19 pandemic has also created new opportunities for the regional manufacturers due to the rise in research activities for the development of vaccines.
The refrigeration oil industry is competitive with established companies including BASF SE, Chevron Corporation, ExxonMobil, PETRONAS, Royal Dutch Shell, Johnson Controls, TotalEnergies SE, Sinopec Group (China Petrochemical Corporation), Petro-Canada Lubricants Inc (HollyFrontier), Behr Hella Service GmbH, National Refrigerants, Inc., Indian Oil Corporation Ltd., Cosmo Oil Lubricants Co., Ltd., and FUCHS, CAMCO Lubricants to name a few.
How has COVID-19 pandemic impacted refrigeration oil industry outlook?
The COVID-19 pandemic has created numerous challenges for the refrigeration oil market due to the global economic slowdown, supply chain uncertainty, and lockdown restrictions. However, growing R&D in the pharmaceutical sector for the development, transportation, and storage of COVID-19 vaccines, raw materials, and intermediates has augmented the use of refrigeration systems. Improving the availability of COVID-19 vaccines is critical to overcoming the pandemic situation. To make vaccines more accessible to American citizens, the U.S. FDA in May 2021 had authorized the storage of undiluted, thawed COVID-19 vaccine vials in refrigerators for up to a month. This would enable vaccine providers such as hospitals and clinics to receive, store, and administer the vaccine more efficiently.