Transformer Oil Market Size, Share, Opportunities, And Trends By Type (Paraffin-Based Transformer Oil, Naphthenic Based Transformer Oil), By Transformer Type (Distribution Transformer, Utility Transformer, Power Transformer, Others), By Application (Industrial, Oil & Gas, Power & Energy, Mining, Others), And By Geography - Forecasts From 2024 To 2029

The global transformer oil market is expected to register a CAGR of 7.88% between 2024 and 2029.

Transformer oil or insulating oil is used in fluorescent light ballasts, high-voltage capacitors, switches, circuit breakers, transformers and other electrical appliances for electrical insulation, heat absorbing and release, and cooling. Transformer oils primarily come in two varieties: paraffin and naphthalene-based. The transformer oils have the right electrical qualities, including low viscosity, high insulation resistance, flash point, and specific heat capacity for improved heat conductivity that doesn't interfere with a transformer's cooling. The main factor increasing the transformer oil market's size annually is industrialization's development.

Transformer Oil Market Drivers

• Rapid industrialization is bolstering the transformer oil market growth.

Bilateral international relations indicate that progressive industrialisation and urbanisation in the global south significantly affects energy consumption and structures development. They have grown in size and with that the demand for electricity has risen and hence have called for the placement of new transformers to enhance distribution. Hence, high installation of transformers tends to boost the demand for transformer oil, which plays crucial roles like insulation and cooling of transformers. The International Energy Agency predicts that India's urban population will increase dramatically by 2040, adding an estimated 270 million new residents.

Transformer oil consumption is rising due to the world's increasing need for power, particularly with implementing hybrid grid systems and impending renewable energy initiatives. According to the specific estimates of Enerdata, the ‘total electric end-use energy’ of the global world has risen, only, by 3 percentage from the years 2010 to 2022. Currently, China and India are the biggest electricity consumers with the later growing at well over 7 percent per year. Transformer oil demand is expected to increase during the projected period due to the expanding need for power and the launch of new renewable energy projects.

Transformer Oil Market Segment Analysis

• The growing oil & gas sector is expanding the transformer oil market size.

The market for transformer oil is mainly influenced by the oil and exploration industry since transformers are vital for many procedures in the industry such as drilling, transportation, exploration, and refining. That is why transformer oil provides the insulation and the cooling that transformers require. More specifically, transformer oil consumption increases resulting from new transformer installations prompted by the world’s increasing demand for gas and oil. According to the International Trade Administration, government-owned enterprises have played a significant role in India's oil and gas industry. These businesses are responsible for over 80% of the country's total oil and gas output, and they have nearly 70% of its refining capacity.

• The rise in mining activities

Large equipment commonly used in mining include excavators, haul trucks and crushers among others. The industrial units tend to use these types of transformers most often to distribute power within those units and to modulate voltage. This transformer oil helps to maintain the insulation as well as the cooling of such transformers and given the fact that with increasing mining activity comes increased demand for transformers, there is a correlated and proportional demand for transformer oil.

• The European region is expected to dominate the transformer oil market.

Due to Europe’s enormous electrical infrastructure, well-established and expanding industrial sector, and significant emphasis on integrating renewable energy sources, it is regarded as the global leader for transformer oil. According to the Federal Ministry for Economic Affairs and Climate Action, the European Commission increased real industrial GDP share to EU 20/20 in other words, the industrial share of the EU GDP to 20% by 2020. Shows the achieved goals, policy and strategy of the Commission of EU for supporting and further development of industrial sector.

• Rising dry-type transformer usage is restraining the transformer oil market growth.

The dry-type version, seemingly on its way to wide acceptance in the transformer business, is one that simply uses solid insulating materials instead of liquid transformer oil. Some of the considerations driving this move include perceived benefits of dry-type transformers with increased safety, lesser maintenance requirements, and environmental advantages. Dry-type transformers are better at some applications since they eliminate possible oil leaks, fire hazards, and the requirement for oil containment systems. This growing trend of dry-type transformers reduces demand for traditional transformer oil, ultimately changing market dynamics in the transformer oil sector.

Transformer Oil Market Key Developments

• June 2024: BBGI engaged with SCGC QTC and declared successful bio transformed oil trial in its “Development and Production of Bio Based Transformer Oil from Palm Oil.” This oil is of international quality standard and has been used on real transformers to avoid its risky use. Its early life consumers were sourced from the Rayong Province.
• August 2022: Nynas AB which is a key naphthenic oil manufacturer launched the circular transformer fluid known as NYTRO RR 900X. This novel product is created applying state-of-art and very effective re-refining process to create the transformer fluid with excellent performance characteristics.
• October 2021: Belgian company Royal SMIT, which is a part of the SGB-SMIT Group, bought the Transformer Oil Laboratory of DNV. This particular strategy enables the SGB-SMIT Group to expand its scope in insulation oil analysis and consolidate its specialization in servicing and maintaining highly advanced transformers.
• September 2021: SGB-SMIT Group made an announcement that it is to partner with Zhuzhou Electric. Such a relationship possesses the idea of using the individual capabilities of both firms in oil-immersed transformers. The intention of the two companies’ partnership is to integrate their strength, knowledge, and skills in the advancement and manufacturing of superior oil-immersed transformers.

Transformer Oil Market Players and Products

• Phillips 66 Transformer Oil: Refined electrical insulator – Philips 66. Specifically, it is characterized by the presence of components meeting the needs of various electrical equipment applications to demonstrate optimal performance. They remain committed to the highest standards as set by the ANSI/ASTM D3487-09 to warrant the product’s conformity to the Type II inhibited oils mentioned by equipment manufacturers.
• POWEROIL:  This transformer oil offered by APAR Industries conforms to the category of transformer oil according to the Bureau of Indian Standard: IS 335-1993 and is used in oil-immersed transformers, capacitors, tap-changers and circuit breakers.

Transformer Oil Market Scope:

Segmentation

• By Type
  • Paraffin-Based Transformer Oil
  • Naphthenic Based Transformer Oil
• By Transformer Type
  • Distribution Transformer
  • Utility Transformer
  • Power Transformer
  • Others
• By Application
  • Industrial
  • Oil & Gas
  • Power & Energy
  • Mining
  • Others
• By Geography
  • North America
    • USA
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • Germany
    • UK
    • France
    • Spain
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Others
  • Asia Pacific
    • China
    • Japan
    • South Korea
    • India
    • Australia
    • Other