The crude oil transportation market is estimated to be valued at US$ 21.58 Bn in 2023 and is expected to exhibit a CAGR of 6.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Crude oil transportation involves the movement of unrefined petroleum from oil extraction sites to refineries or storage terminals using pipelines, oil tankers, rail tank cars and tank trucks. Increased offshore exploration activities have led to a rise in seaborne transportation of crude oil. Pipelines remain the preferred mode for long distance bulk transfers on land.
Market Dynamics:
Rising offshore exploration activities: Global oil companies are increasingly investing in offshore oil fields to meet growing energy needs. This has boosted transportation of crude oil via oil tankers, driving market growth. For instance, major oil companies such as ExxonMobil plan to invest over US$ 15 Bn in offshore Guyana projects by 2027.
Rise in US tight oil production: Growing production of tight oil from shale reserves in the US has increased demand for crude transportation via railways and pipelines to move it from remote production sites to refineries. According to EIA, US tight oil production is expected to rise from 5.5 million bpd in 2020 to over 6.7 million bpd by 2023.
SWOT Analysis
Strength: ExxonMobil Corporation, Royal Dutch Shell, Chevron Corporation are the major players in crude transportation with extensive infrastructure and logistics networks globally. Crude transportation through pipelines is a cost effective option. Growing investments in infrastructure development of pipelines and ports are helping in expanding the transportation capacity.
Weakness: Fluctuations in crude oil prices poses challenges to earnings and cash flows of companies. Pipeline shutdowns due to maintenance or accidents can disrupt supply. Growing focus on renewable energy and electric vehicles pose threat to long term demand for crude oil.
Opportunity: Growing energy needs of emerging economies of Asia Pacific provides major opportunities. Companies are investing in expansions of existing pipelines and developing new routes to cater growing supply from USA, Canada and Middle East. Acquisitions and partnerships help companies to expand their footprint and access new markets.
Threats: Strict government regulations pertaining to environment and safety are increasing compliance costs. Geopolitical uncertainties and regional conflicts pose disruption risks to transportation infrastructure and supply routes. Shift towards low carbon fuels is a long term threat.
Key Takeaways
The Global Crude Transportation Market is expected to witness high growth, exhibiting CAGR of 6.0% over the forecast period, due to increasing investments in pipeline infrastructure development globally. The market size for 2023 is US$ 21.58 Bn.
Regional analysis: North America dominated the market in 2023 with over 45% share backed by extensive pipeline network and growing production in USA and Canada. Asia Pacific is expected to be the fastest growing region, expanding at over 7% CAGR owing to rising energy needs of China, India and other emerging economies. Investments in new pipelines are connecting Middle East and Central Asian countries to major Asian markets.
Key players operating in the crude transportation market are ExxonMobil Corporation, Royal Dutch Shell, Chevron Corporation, BP plc, TotalEnergies SE, ConocoPhillips, China National Petroleum Corporation, Saudi Aramco, Rosneft Oil Company, Valero Energy Corporation, Phillips 66, Marathon Petroleum Corporation, PetroChina Company Limited, Kinder Morgan Inc., Enbridge Inc. Major players are focusing on capacity expansions and developing new routes for crude transportation to capture opportunities arising from evolving supply-demand scenarios globally.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
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