Transformer Oil Market by Oil Type (Mineral (Naphthenic, Paraffinic), Silicone, Bio-based), Application (Transformer, Switchgear, Reactor), End-User (Transmission & Distribution, Power Generation, Railways & Metros), Region - Global Forecast to 2030

Transformer Oil Market by Oil Type (Mineral (Naphthenic, Paraffinic), Silicone, Bio-based), Application (Transformer, Switchgear, Reactor), End-User (Transmission & Distribution, Power Generation, Railways & Metros), Region - Global Forecast to 2030

The global transformer oil market is estimated to grow from USD 2.0 Billion in 2023 to USD 3.0 Billion by 2030; it is expected to record a CAGR of 5.9% during the forecast period. The growth of the transformer oil market is attributed to the strengthing of electric grids in developing economies along with the modernization of electric grids in developed economies due to growing industrialization and urbanization.

“Mineral Oil: The largest segment of the transformer oil market, by oil type “

Based on oil type, the transformer oil market has been split into three types: mineral oil, silicone oil, and bio-based oil. Mineral oil is further segmented into naphthenic and paraffinic oil. The growth for mineral oil is owed to its convenient cost and easy availability compared to other transformer oils. Majority of the existing and new transformers manufactured utilizes mineral oil as an insulation fluid which eventually boosts the growth of mineral oil segment in transformer oil market. In addition, mineral oil has good cooling properties which help dissipate heat from tranformers core and prevents overheating which drives the growth of the mineral oil segment.

“Transformer segment is expected to be the largest segment based on application”

By application, the transformer oil market has been segmented into transformer, switchgear, and reactor. The increasing number of substations due to increased demand for power generation in developing countries is one the primary factors driving the growth of the transformer segment. Transformers cater to various industries such as power generation, railways & metros, power utilities, and others to provide a consistent and reliable power supply, boosting the growth of the segment in the transformer oil market. During the forecast period, Asia Pacific is estimated to lead the transformer oil market within the transformer application segment.

“By end-user, the transmission and distribution segment is expected to lead the market during the forecast period.”

Based on end-user, the transformer oil market is segmented into transmission and distribution, power generation, railways & metros, and others during the forecast period. The transmission and distribution segment is expected to lead the transformer oil market during the forecast period owing to the significant investment in expanding and modernizing the transmission and distribution network to accommodate the growing electricity demand. Expanding the T&D network would create demand for transformer oils as they would be integrated into the power transformers for cooling and insulations, eventually propelling the market growth for transformer oils.

North America is expected to be the second-largest region in the transformer oil market

North America is expected to be the second-largest transformer oil market during the forecast period. Growing demand for reliable power and investments in the T&D sector for upgrading the aging infrastructure will enhance the requirement for transformers, which is expected to boost the demand for transformer oil in North America. Moreover, the expansion of Canada’s transmission network plays a crucial role in the growth of transformer oil market. Hence, increasing investments toward expanding and upgrading power grid infrastructure is expected to provide ample opportunities for the providers of transformer oils in the region.

Breakdown of Primaries:

In-depth interviews have been conducted with various key industry participants, subject-matter experts, C-level executives of key market players, and industry consultants, among other experts, to obtain and verify critical qualitative and quantitative information and assess future market prospects. The distribution of primary interviews is as follows:

By Company Type: Tier 1- 55%, Tier 2- 25%, and Tier 3- 20%

By Designation: C-Level- 35%, Director Levels- 30%, and Others- 35%

By Region: Europe- 35%, North America- 25%, Asia-Pacific 25%, RoW-15%

Note: Others include sales managers, engineers, and regional managers.

Note: The tiers of the companies are defined on the basis of their total revenues as of 2022. Tier 1: > USD 1 billion, Tier 2: From USD 500 million to USD 1 billion, and Tier 3: < USD 500 million

The transformer oil market is dominated by a few major players that have a wide regional presence. The leading players in the transformer oil market are Nynas AB (Sweden), Ergon, Inc. (US), PetroChina Company Limited (China), Shell (UK), APAR Industries Limited (India), and Calumet Specialty Products Partners, L.P. (US). The major strategy adopted by the players includes new product launches and, investments & expansions.

Research Coverage:

The report defines, describes, and forecasts the global transformer oil market by oil type, end-user, application, and region. It also offers a detailed qualitative and quantitative analysis of the market. The report comprehensively reviews the major market drivers, restraints, opportunities, and challenges. It also covers various important aspects of the market. These include an analysis of the competitive landscape, market dynamics, market estimates in terms of value, and future trends in the transformer oil market.

Key Benefits of Buying the Report

Increasing investments in the modernization of power grid projects owing to increasing demand for electricity is the main factor driving the transformer oil market. Environmental concerns associated with adopting mineral oil due to its non-biodegradable characteristics in transformer oils still restrain the market. The replacement of aging grid infrastructure and increased demand for bio-based transformer oil due to growing environmental concerns, especially in the Asia Pacific, provides opportunities for the transformer oil market to grow. However, transformer oil is the refined and processed product of crude oil, and fluctuations in crude oil prices pose major challenges in the transformer oil market.

Product Development/ Innovation: The transformer oil market is witnessing significant product development and innovation, driven by the growing demand for renewable energy. Companies are investing in developing advanced transformer oils such as bio-based oil specifically designed to reduce the carbon emissions from grid infrastructure and promote renewable energy sources. These oils are bio-degradable and are majorly composed of vegetable oils and antioxidant additives to enhance the operational efficiency of transformers and reduce environmental impact.

Market Development: Renewable energy sources are becoming increasingly important in the power grid infrastructure. Renewables include sources such as solar, wind, hydro, geothermal, and biomass, among others. This has led to the development of solar energy and wind turbine transformers, usually biodegradable oil-filled transformers.

Market Diversification: Ergon, Inc. introduced HyVolt C50A, an Arctic grade transformer oil designed to withstand extreme cold weather conditions. The HyVolt C50A offers oxidation stability, high dielectric strength, and cooling properties.

Competitive Assessment: In-depth assessment of market shares, growth strategies, and service offerings of leading players, like include Nynas AB (Sweden), Ergon, Inc. (US), PetroChina Company Limited (China), Shell (UK), APAR Industries Limited (India), and Calumet Specialty Products Partners, L.P. (US) among others in the transformer oil market.