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Crude oil is one of the most crucial commodities facilitating the functioning of economies and industries across the world. The crude transportation market comprises pipelines, tankers, railroad tank cars and oil trucks that ensure the safe and efficient movement of crude oil from production sites to refineries. Crude transportation via pipelines remain the most preferred option due to advantages like mass conveyance of oil over long distances in a cost-effective manner while maintaining stringent safety and environmental protection standards. Growing energy consumption owing to rapid industrialization and urbanization globally has triggered higher oil extraction activities, emphasizing the need for a well-established crude transportation infrastructure.
The global crude 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 key trends:
One of the major trends spurring growth in the crude transportation market is the increasing offshore production of crude oil. According to estimates, about 30% of oil production today comes from offshore fields. Transportation of crude from offshore installations to onshore refineries via pipelines, tankers and shuttle tankers is an integral part of the value chain. Growing investments by oil majors in deep water and ultra-deep water exploration and production projects are expected to further catalyze demand for offshore to onshore crude transportation infrastructure and services. Sustained demand for crude oil in Asia Pacific nations is also driving longer haul transportation of crude via large ocean going tankers from the Middle East and America. Introduction of clean fuel standards and strict environmental regulations in various countries have prompted pipeline operators and shipping companies to increasingly adopt IoT based monitoring solutions to ensure operational efficiency while adhering to safety and emission reduction goals.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as the crude transportation industry requires high capital investment for infrastructure like pipelines, tankers, and storage facilities. However, the high growth prospects attract new players.
Bargaining power of buyers: The bargaining power of buyers is moderate to high as major oil companies and traders have significant influence in the global oil market. Buyers can negotiate on pricing and contracts.
Bargaining power of suppliers: The bargaining power of suppliers is low to moderate as a few countries produce large volumes of crude oil globally. However, new oil discoveries are increasing the number of supplier countries.
Threat of new substitutes: The threat of new substitutes is low as crude oil has no close substitute and established infrastructure for its transportation. Alternative fuels are in nascent stages.
Competitive rivalry: The competition is high among existing players to gain market share and benefit from economies of scale. Players compete on pricing, contract terms, and logistics & transportation capabilities.
Key Takeaways
The global crude transportation market is expected to witness high growth. The increasing oil production and consumption across regions is driving investments in pipelines, rail, and waterborne vessels for transportation of crude oil.
Regional analysis: North America dominates the global crude transportation market currently led by the US. Large shale oil production has led to increased pipeline network and oil movements in the region. Asia Pacific is expected to grow the fastest during the forecast period led by China and India owing to rising energy demand.
Key players: 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 expanding their footprint through strategic partnerships and capacity additions.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
