USA White Oil Market Outlook to 2030

USA White Oil Market Overview

• The USA White Oil Market was valued at USD 537 million, growing steadily due to its increasing application in personal care, pharmaceuticals, and industrial lubricants. White oil's low viscosity, chemical stability, and non-toxic properties make it highly sought after in various industries, particularly for consumer goods and healthcare applications.

• Major players in the market, including ExxonMobil, Sonneborn, Calumet Specialty Products Partners, Royal Dutch Shell, and Chevron Corporation. These companies have secured a substantial market share by investing in research and development to produce high-quality white oils that meet stringent regulatory standards.
• In December 2022, ExxonMobil launched a new polypropylene unit at its Baton Rouge refinery, doubling production capacity to 450,000 tonnes/year. This $500 million investment aims to meet rising demand for high-performance plastics in the automotive sector, supporting fuel efficiency and emission reduction efforts.
• Texas dominates the market, due to its well-established petrochemical infrastructure and proximity to major refineries that produce white oil. Additionally, Texas is home to end-user industries like personal care and pharmaceuticals, contributing to the high demand for white oil in the state.

USA White Oil Market Segmentation

The market is segmented into various factors like product, application, and region.

By Product: The market is segmented by product into pharmaceutical grade, cosmetic grade, and technical grade. Pharmaceutical grade white oil held a dominant market share due to the stringent regulatory requirements in the pharmaceutical sector, driving the demand for high-purity, non-toxic white oil.

By Application: The market is segmented by application into personal care, pharmaceuticals, food packaging, and industrial lubricants. The personal care segment led the market with the increasing demand for white oil in skincare, baby care, and haircare products.

By Region: The market is segmented by region into North, South, East, and West. The South led the market due to its strong petrochemical industry. The South's dominance is largely attributed to the presence of several key refineries and major pharmaceutical and cosmetics companies that drive demand for white oil.

USA White Oil Market Competitive Landscape

• Chevron Corporation: Chevron Lummus Global (CLG) recently commissioned the world's largest white oil hydroprocessing unit in Weifang, China. This facility has a capacity of 500,000 metric tons per annum for industrial-grade white oil and 200,000 metric tons for food-grade white oil, enhancing production capabilities.
• Calumet Specialty Products Partners: In October 2023, Montana Renewables initiated an early turnaround at its Great Falls biorefinery, advancing planned maintenance to replace a steam drum in its hydrogen plant. The refinery expects to process 12,000 barrels per day (b/d) of untreated feedstock by December 2023, following the completion of repairs and debottlenecking efforts.

USA White Oil Market Analysis

Market Growth Drivers

• Rising Demand for White Oil in the Personal Care Industry: The growth of the market is driven by increasing demand in personal care and pharmaceutical sectors, which together account for over 25% of total white oil consumption. The trend towards clean-label products and eco-friendly formulations is also significant, as manufacturers seek non-toxic, biodegradable alternatives to enhance product safety and sustainability.
• Expanding Application in the Food Packaging Industry: The food packaging industrys need for non-reactive and safe lubricants has driven white oil usage. In 2023, the market recorded 5 million gallons of white oil consumption for food-grade packaging, particularly in food machinery. This application is expanding due to stricter FDA regulations on food safety and packaging materials, further boosting demand.
• Growth in Industrial Lubricants for Machinery: In 2023, the U.S. industrial sector saw increased demand for machinery lubricants, with white oil usage exceeding 7 million gallons. As more manufacturers prioritize non-toxic, stable lubricants, white oil consumption will continue to rise, driven by industrial machinery's operational needs.

Market Challenges

• Supply Chain Disruptions: In 2023, disruptions in the global supply chain, particularly from geopolitical tensions, affected raw material availability for white oil producers, leading to shipment delays and increased costs. These disruptions are a major operational challenge and are likely to persist into 2024.
• Volatility in Crude Oil Prices: Crude oil, a critical raw material for white oil production, saw price volatility in 2023, leading to cost increases in white oil production. Average crude oil prices exceeded USD 80 per barrel, creating uncertainty for producers who depend on stable costs for profitability.

Government Initiatives

• Grant Program for Infrastructure Upgrades: In 2023, U.S. refinery capacity grew by 400,000 barrels per calendar day, largely due to expansions at ExxonMobils Beaumont refinery and Valeros Port Arthur facility. These upgrades enable increased production of high-value products like gasoline and diesel, aligning with the U.S. government's push for energy security and self-sufficiency in fuel production.
• Support for Domestic Manufacturing: In 2023, the U.S. government allocated $5 billion to enhance domestic manufacturing, particularly benefiting white oil producers. This initiative aims to meet the rising demand for locally sourced specialty oils in the pharmaceutical and personal care sectors, driven by a growing focus on supply chain resilience and sustainability.

USA White Oil Market Future Outlook

Future trends include the adoption of eco-friendly refining technologies, increased demand from the personal care industry, and growth in the pharmaceutical sector's use of white oils.

Future Market Trends

• Growth in the Personal Care Industry: By 2028, the personal care industry will continue to lead in white oil consumption. This growth will be driven by the increasing consumer demand for safe, non-toxic ingredients in personal care formulations, particularly in products aimed at sensitive skin.
• Technological Innovations in Refining: Over the next five years, innovations in refining technology will allow for the production of higher-purity white oils at lower costs. Companies are expected to invest over USD 50 million in technologies such as hydrocracking and catalytic refining, which will increase efficiency and reduce environmental impact while meeting stricter FDA regulations.