Transformer Oil Market Report 2026

The transformer oil market size has grown strongly in recent years. It will grow from $2.5 billion in 2025 to $2.67 billion in 2026 at a compound annual growth rate (CAGR) of 7%. The growth in the historic period can be attributed to expansion of power transmission networks, growth in electricity demand, transformer replacement cycles, industrial electrification, fossil-based oil availability.

The transformer oil market size is expected to see strong growth in the next few years. It will grow to $3.56 billion in 2030 at a compound annual growth rate (CAGR) of 7.4%. The growth in the forecast period can be attributed to renewable energy grid integration, smart grid deployment, demand for eco-friendly insulating fluids, power infrastructure investments, aging transformer upgrades. Major trends in the forecast period include high-performance insulating oils, shift toward bio-based transformer oils, enhanced thermal stability requirements, fire-resistant oil adoption, extended equipment life solutions.

Increasing adoption of renewable energy sources is expected to drive the growth of the transformer oil market in the coming years. Renewable energy sources - such as sunlight, wind, and biofuels - replenish naturally faster than they are consumed. The rise in renewable energy adoption is fueled by factors including depletion of natural resources, rising fuel prices, increasing pollution, and higher carbon emissions. Transformer oils support renewable energy integration by providing essential insulation and cooling for transformers, ensuring reliable and efficient operation while enhancing longevity and performance. For example, in June 2025, the U.S. Energy Information Administration reported that U.S. biofuel production - including ethanol, renewable diesel, biodiesel, and other biofuels such as sustainable aviation fuel (SAF) - reached a record 1.4 million barrels per day in 2024, a 6% increase over 2023. Additionally, U.S. solar and wind energy production grew by 25% and 8%, respectively, in 2024. Consequently, increasing adoption of renewable energy sources is fueling the growth of the transformer oil market.

Leading companies in the transformer oil market are forming partnerships to enhance their market presence. A strategic business partnership refers to a structured relationship between two or more commercial entities, typically established through one or more business agreements or contracts. For instance, in March 2023, BBGI, a biofuel energy and products company based in Thailand, collaborated with SCG Chemicals and QTC Energy. This partnership aims to jointly develop and manufacture bio transformer oil for production trials for the first time in Thailand. SCG Chemicals is a petrochemical company also based in Thailand, while QTC Energy is a transformer manufacturing company in the country.

In January 2024, Shell plc, a UK-based energy company specializing in production, distribution, and petrochemical services, acquired MIDEL and MIVOLT from M&I Materials Ltd. for an undisclosed amount. Through this acquisition, Shell aimed to strengthen its global lubricants portfolio by incorporating synthetic and natural ester-based transformer fluids. M&I Materials Technology Ltd. is a UK-based company focused on developing and supplying advanced materials, including transformer fluids and other industrial solutions.

Major companies operating in the transformer oil market are Royal Dutch Shell PLC, Exxon Mobil Corporation, Repsol SA, Ergon Inc., Nynas AB, PetroChina Company Limited, Apar Industries Limited, Calumet Specialty Products Partners L.P., China Petroleum & Chemical Corporation (Sinopec), San Joaquin Refining Co. Inc., Gandhar Oil Refinery Limited, Savita Oil Technologies Limited, Hydrodec Group PLC, Engen Petroleum Limited, Castrol Limited, Chevron Corporation, TotalEnergies SE, Fuchs Petrolub SE, Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited, Gulf Oil Corporation Limited, Petroliam Nasional Berhad, CNOOC Oil & Petrochemicals Co. Ltd., SK Lubricants Co. Ltd., GS Caltex Corporation.

Asia-Pacific was the largest region in the transformer oil market share in 2025. North America was the second-largest region in the transformer oil market analysis. The regions covered in the transformer oil market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the transformer oil market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The transformer oil market consists of sales of alkanes, cycloalkanes and aromatic hydrocarbons. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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