Originally Posted By: NateDN10
Motor oils are made up of the base oil plus various additives.
The base oil is what's referred to as synthetic or conventional, and in the industry is categorized into groups:
-Group I, II & II+ are conventional, going from lower to higher quality.
-Group III is allowed to be called synthetic, because it can be made to have similar performance to real synthetics, but actually it's just further refined conventional oil.
-Group IV is a true synthetic, made of PAO, or polyalphaolefins.
-Group V is also a true synthetic, made of POE, or polyol esters.
In many cases, what actually determines the performance of a finished motor oil is which additives are present in what quantities.
-Viscosity index improvers are polymers that adjust the way the oil reacts to heat & cold, reducing the change in viscosity over temperature.
-Detergents clean the junk from combustion out of the engine.
-Dispersants keep soot & other junk suspended in the oil instead of dropping out and clogging things.
-Antiwear additives protect surfaces where metal-to-metal contact is part of normal operation, such as cam lobes.
That's the 60-second summary.
This a really good summary; but I also want to point out that when looking at API groupings of base oil, the actual purpose of this system is to control consistency when dealing with multiple base oil suppliers (in the industry we call it base oil interchange)
A good chart for understanding can be found
here
As you see in the chart, Sulfur content, Saturate content and Viscosity Index are what determines the category. Oil manufacturers can work change the base oil to a different supplier within the same group without notifying the API or their consumers. There is also some leeway when making changes if the base oils are close enough (example Group II+ to lower Viscosity Indexed Group III).
Many in the BITOG community make the mistake of saying that Group III is better than Group II, and Group V is better than Group IV. That's just not the case, they are different and are chosen for finished oil products for a variety of reasons, including production cost.
There are benefits to the higher VI and other properties of Group III and Group IV base oils (both are used in synthetic oils) which formulators take into account. Interestingly all PAO is considered Gr IV even if it has a lower viscosity index than a group III. And the official description of Group V is anything not in the other groups - which as you indicated is primarily ester based, but they're not always better.
The competitive difference and what accounts for the differing performance comes down to additives. This is why additive formulations are closely guarded trade secrets.