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"How does a Group III engine oil compare to a Group IV oil in its cleaning ability? I have read and understood the potential problems of switching a higher mileage engine from a conventional oil to a synthetic polyalphaolefin (PAO), but is there less inherent risk with switching to a Group III oil? From my understanding, esters act more like solvents (more aggressive, I assume) and detergents, while dispersants more or less attach themselves to sludge and other contaminants, and carry them away in that form. Is this correct?"
Most engine oils are now formulated with Group II (hydrotreated) or a mixture of Group I (conventional mineral oil) and Group II base oils to meet the latest API gasoline and diesel performance designations.
Because Group III and Group IV (PAO) base oils are both considered synthetics (since 1999), any oil labeled as a full synthetic would contain either Group III or PAO, or both. Any oil that is labeled as a partial synthetic, semi-synthetic or synthetic blend would contain Group I or Group II (mineral oil) plus some amount of Group III oil or PAO (synthetic). Keep in mind that there is no minimum quantity of synthetic base oil required in order to call a blend a semi-synthetic lubricant.
There are also no designations for end users to know what specific base oils the oil formulator has used, so your question is a bit academic in nature. We would never be able to tell if we were purchasing a Group III engine oil vs. a Group IV (PAO) engine oil.
However, from an academic point of view, I would expect the cleaning ability of a Group III and a PAO to be similar (generally poor). Again, academically, I would expect less risk of seal issues, etc., when switching from a Group III oil (as opposed to a Group I oil) to a PAO, as the Group III oil and PAO are chemically similar.
Ester synthetics have a higher degree of solvency than Group II, III or PAO base oils. This means they will dissolve additives and deposits more readily and may cause some seals to swell slightly. They also can remove some paints. These characteristics (other than paint removal) can be beneficial, so some oil formulators will add small amounts of ester base oils into their synthetic (Group III and PAO) formulations to improve these properties.