Does lubricants reduce friction by replacing sliding friction with fluid friction?

Some lubricants would have the effect of replacing static friction with dynamic, if only because their bulk kept the solids offset from the static case. The general answer is no, however; the lubricant will present a new set of possible surface geometries in which the wetting energy is reduced, reactions to force changed, and of course the sliding friction case reactions reduced or changed as well.

Lubricants are characterized by their useful range for work; for example high-poly grease (2 million -mer where glycerin soap might be 30-250 -mer (i.e. that many carbons (on the case) in a chain)) is great for bicycle bearings and general machine use up to 5 meters per second; when trains need to go faster than that, you get to change wheel designs to run on oil (and different bearings, shifting the grease to duty on the suspension guide pins) so the lubricant isn't destroyed in seconds, in a manner very like a wool sweater on a drag-race wheel.1 Oil and powder lubricants degrade quickly at the common low-speed or high-load cases, though additives can help.

1- See Michael Kruger's (curator) 1990 issue of _Science_ magazine, concerning the practice of high pressure physics and observation of perovskites.