April 20, 2024

Crude Oil Transportation is Set to Experience Significant Growth Fueled by Increasing Offshore Exploration Activities

The crude oil transportation market involves the massive logistical challenge of transporting crude oil produced in one location to refineries where it can be processed into usable petroleum products like gasoline and jet fuel. Crude oil is predominantly transported via pipelines, rail tank cars, oil tankers and crude carrier vessels depending on the origin of production and destination of refineries. Transporting crude oil is crucial as oil needs to be moved swiftly and efficiently to meet global energy demands.

Global Crude Transportation Market is estimated to be valued at US$ 21.58 Bn in 2024 and is expected to exhibit a CAGR of 6.0% over the forecast period 2023 to 2030. Rising investments in offshore oil exploration projects have amplified the need for cross-country and overseas transportation of crude via pipelines, railcars and tankers to link new production outposts to refining hubs.

Key Takeaways

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. These companies collectively account for a majority share of the global crude oil trade.

The crude transportation market provides opportunities for operators in sectors like pipeline construction, marine transport through ownership of crude tankers and railroads through dedicated oil tanker railcars. Entry of private players is helping augment existing infrastructure networks to handle rising seaborne trade volumes.

Major crude producers are investing heavily in offshore production facilities in remote locations like the Arctic and ultra-deep waters which is increasing dependence on long-haul maritime routes. This is promoting capacity increases of Very Large Crude Carriers (VLCC) and Ultra Large Crude Carriers (ULCC) to capitalize on the economies of scale.

Market drivers
One of the key drivers for the crude oil transportation market is the rising offshore exploration and production activities. Continued discoveries of sizable offshore oilfields such as those in the US Gulf of Mexico and Brazil that require transportation have boosted demand for shipping and pipeline infrastructure. This has prompted pipeline operators and vessel companies to order new-build ships and expand pipeline diameters/capacity.

Key Takeaways
The crude transportation market provides opportunities for operators in sectors like pipeline construction, marine transport through ownership of crude tankers and railroads through dedicated oil tanker railcars. Entry of private players is helping augment existing infrastructure networks to handle rising seaborne trade volumes.

Major crude producers are investing heavily in offshore production facilities in remote locations like the Arctic and ultra-deep waters which is increasing dependence on long-haul maritime routes. This is promoting capacity increases of Very Large Crude Carriers (VLCC) and Ultra Large Crude Carriers (ULCC) to capitalize on the economies of scale.

Market drivers
One of the key drivers for the crude oil transportation market is the rising offshore exploration and production activities. Continued discoveries of sizable offshore oilfields such as those in the US Gulf of Mexico and Brazil that require transportation have boosted demand for shipping and pipeline infrastructure. This has prompted pipeline operators and vessel companies to order new-build ships and expand pipeline diameters/capacity.

PEST Analysis
Political: Regulations and policies related to oil and gas exploration impact the market. Changes in environmental laws can affect investments and operations.
Economic: Global economic growth influences demand trends. Volatility in crude oil prices affects revenue and profitability of players.
Social: Growing awareness about environmental protection puts pressure on industry to reduce emissions and adopt clean technologies.
Technological: Adopting technologies like pipeline monitoring systems and leakage detection solutions help improve efficiencies. Advancements in transportation systems aid in cost reduction.

The market is concentrated in the Asia Pacific and North America regions in terms of value. Asia Pacific accounts for over 40% share due to high consumption countries like China and India driving demand. North America is another major region supported by the large shale oil reserves and investments in pipelines in the US.

The Crude Transportation Market Middle East and Africa region is projected to witness the fastest growth during the forecast period supported by large crude oil reserves. Countries like Saudi Arabia, UAE, Iraq are boosting exploration and production activities to meet rising global energy needs. Investments in pipelines are expanding transportation infrastructure to cater to both regional demand and for export markets.

*Note:

  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it