Oil Storage Market Growth, Trends, Absolute Opportunity and Value Chain 2020-2030
Surge in Stock Levels and Focus on Discovering Alternative Oil Storage Solutions to Aid Market Growth
The oil & gas sector has expanded at an impressive rate over the past couple of decades, owing to increasing demand from an array of end-use industries. As the demand for different types of oil, including gasoline, aviation fuel, middle distillates, and crude oil continues to grow at an impressive rate, oil storage has emerged as an important requirement. Players operating in the oil storage market are increasingly investing resources in new technologies, production of oil storage products, and oil storage techniques to establish a solid foothold in the current market landscape.
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Oil & gas is primarily transported over long distances around the world due to which, oil storage is a critical aspect of the overall oil supply chain– a factor that is projected to drive innovations and new development across the oil storage market during the forecast period. Large storage systems are a prerequisite for maritime transport, especially at export-import terminals due to which, the focus on oil storage has remained relatively high– a factor that is anticipated to contribute to the growth of the global oil storage market during the assessment period. Over the few decades, the demand for oil storage to hold strategic reserves to ensure the supply of oil during a crisis period has witnessed a consistent growth.
At the back of these factors, along with increasing focus on quality control, the global oil storage market is on the course to attain a market value of US$ 24 Bn by the end of 2030. At present, open top tanks, floating roof tanks, fixed roof tanks, and cylindrical tanks are some of the most extensively deployed oil storage types.
Several Countries Explore Possibility of Building New Oil Storage Systems to Cater to Demand
The energy sector around the world has witnessed major developments over the past few years. The increasing demand for crude oil, particularly from developing nations has played an imperative role in influencing the growth of the global oil storage market. Several major nations, including the U.S. and India are increasingly exploring the possibility of increasing the oil storage capacity due to considerable rise in stock levels. The energy department across North America are increasingly focusing on building new oil storage tanks to cater to a surge in the stock levels. Stakeholders involved in the current oil storage market including midstream companies, traders, and oil producers are focusing on the development of different storage alternatives. Some of the concepts that are in contention include conversion of tanks and storage wells into crude storage by primarily utilizing floating storage and more.
While the players in the North American energy sector are considering various expansion strategies, several nations are findings innovative oil storage techniques. For instance, in India, as the storage capacity in pipelines, inland depots, and refineries are nearly full, the policy makers in the country are devising unique ways to store oil. The price war between Russia and Saudi Arabia coupled with dwindling consumption of crude oil and increasing dumping of fuel into the spot market in India are some of the major factors expected to have a strong influence on the overall growth of the oil storage market in India.
Market Growth to Remain Steady amid COVID-19 Pandemic
The ongoing COVID-19 pandemic is expected to have a moderate impact on the global oil storage market. As onshore tanks and storage alternatives in several major nations, including the U.S. and India are nearly full, market players are increasingly eyeing opportunities in these regions to cater to the demand for new oil storage alternatives. Traders and refiners are increasingly exploring new alternatives such as floating storage to fulfil the growing demand for oil storage alternatives. As the lockdown restrictions around the world continue to ease out, the supply chain across the oil storage market is showing signs of recovery.
Oil Storage Market: Overview
- According to Transparency Market Research’s latest research report on the global oil storage market for the forecast period 2020–2030, demand for oil storage facilities is rising across the globe to ensure supply of oil in case of emergencies. Growth in demand for refined petroleum products in various end-use industries is estimated to boost the global oil storage market over the next few years.
- In terms of revenue, the global oil storage market is estimated to reach US$ 24 Bn by 2030, expanding at a CAGR of 4% during the forecast period
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Mismatch Between Demand and Supply of Refined Products: Key Driver of Oil Storage Market
- Production of crude oil has increased significantly over the last few years, due to the revolution in shale oil production in the U.S. and ongoing investments in exploration and production of oil reserves across several countries such as Saudi Arabia. This oversupply of crude oil has created a gap between demand and supply. In turn, this is projected to drive investment in the construction of oil storage facilities, thereby boosting the global oil storage market.
- The coronavirus pandemic prompted governments of various countries to enforce nationwide lockdowns as part of measures to limit the spread of the pandemic. Several restrictions were placed on movement of individuals during the lockdown. Economic activities have come to a halt, barring activities related to essential goods and services. This hampered the demand for refined petroleum products.
- Demand for crude oil is directly linked to the demand for petroleum products, as crude oil is used as a raw material in the production of refined products. Decline in utilization of refined products has negatively impacted the demand for crude oil. According to the IEA, global demand for oil fell by 16.4 mb/d year-on-year in Q2 2020, as lockdowns were imposed to combat the COVID-19 pandemic. This, in turn, raised the volume of oil storage, subsequently increasing the need for storage facilities for crude oil. Thus, a mismatch between demand and supply of crude oil is anticipated to offer lucrative opportunities for the global oil storage market during the forecast period
Increase in Demand for Oil Storage in Oil & Gas Sector
- Demand for oil & gas products is rising across the globe owing to increase in population and growth in industrialization
- Supply of oil has been disrupted due to the COVID-19 pandemic. Development of oil storage facilities is expected to play a major role in energy security policy, as oil is used for a variety of purposes and is difficult to substitute with another commodities.
- There are two types of oil storage facilities: commercial reserves and strategic petroleum reserves (SPR). Commercial reserves are reserves stored for commercial purposes by various refineries and petroleum companies. Strategic petroleum reserve refers to the reserves made by the government body of a particular country to safeguard the economy and help maintain national security during an energy crisis.
- In Asia Pacific, China is a prominent importer of crude oil. The country imports 40% of its crude oil from the Middle East. This is boosting the demand for oil storage facilities in the country.
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