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The oil and gas downstream market size is forecast to increase by USD 179.09 billion, at a CAGR of 2.93% between 2023 and 2028. The report includes historic market data from 2018-2022. The market is witnessing a growing demand for rising adoption of digitalization and automation, a focus on energy transition and sustainability in the energy sector, and rising investment in refining capacity upgrades.
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The rising adoption of digitalization and automation is an emerging trend shaping market growth. Digitalization involves the use of sensors and Internet of Things (IoT) devices to collect real-time data from equipment and assets. The demand for advanced sensor technology has grown as operators seek to monitor the performance and condition of equipment remotely. Automation and digitalization enable the collection and analysis of vast amounts of data from oil and gas downstream operations. Data analytics and machine learning algorithms are used to predict equipment failures, schedule maintenance proactively, and optimize production processes.
Moreover, the possibility of cybersecurity risks rises in tandem with digitization and automation. Protecting critical infrastructure from cyberattacks becomes a priority, leading to investments in cybersecurity solutions and equipment. Automation technologies are integrated into drilling rigs, allowing for autonomous drilling operations and precise wellbore placement. Smart drilling rigs can adapt to changing downhole conditions in real time. Thus, the rising adoption of digitalization and automation will enhance the growth of the market during the forecast period.
The refineries segment is estimated to witness significant growth during the forecast period. Refineries are pivotal components of the oil and gas downstream sector, responsible for transforming crude oil into various valuable products, such as diesel, gasoline, LPG, and others. There are several types of refineries, each specializing in different processes to produce specific end products.
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Further, another type is the complex, or integrated refinery, which incorporates additional secondary processes beyond basic distillation to maximize the yield of high-value products and minimize waste. These secondary processes include catalytic cracking, hydrocracking, reforming, and alkylation, among others, which enable the production of a broader range of products, such as petrochemical feedstocks, lubricants, and specialty fuels. Complex refineries are essential for meeting diverse product demands and maintaining competitiveness in the downstream oil and gas industry. Together, these refinery types play a critical role in converting crude petroleum into a multitude of products that power economies and support various industries worldwide, such as transportation and energy. Therefore, such factors will drive the segment during the forecast period.
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APAC is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Rising populations and economic growth in APAC countries are driving an increased demand for energy, including oil and gas. This necessitates investments in downstream exploration and production. The potential for discovering new hydrocarbon reserves in the APAC region, particularly in offshore areas, attracts investments in exploration and drilling equipment. The APAC region has extensive offshore reserves, and advancements in offshore drilling technology make it economically viable to tap into these reserves. This drives demand for offshore equipment.
Moreover, as the region explores renewable energy sources, oil and gas downstream operations may integrate with renewable projects, such as offshore wind farms, further driving demand for equipment. APAC countries seek to enhance energy security by developing domestic hydrocarbon resources and reducing reliance on imported oil and gas. Such factors are expected to drive the regional market growth during the forecast period.
Rising global energy demand is notably driving market growth. The growing global energy demand necessitates increased exploration and production of oil and gas resources to meet the needs of industries, transportation, and residential consumption. This drives investments in oil and gas downstream such as distillation towers and reactors, storage tanks for crude oil and refined products and pumps and compressors for transportation. Meeting rising energy demand requires the development and expansion of infrastructure, including pipelines, refineries, and processing facilities.
Moreover, as the global energy mix evolves, there is a need for equipment and infrastructure to integrate renewable energy sources, such as solar and wind, with conventional oil and gas operations. Energy security and access to reliable energy sources are often linked to geopolitical stability. This can lead to investments in oil and gas downstream in regions with favorable geopolitical conditions. Thus, the rising global energy demand will drive the market during the forecast period.
Uncertainties associated with low crude oil prices are a significant challenge hindering the market. Any fluctuation in crude oil prices affects the performance of a majority of the downstream sector companies. In the last couple of years, the trend of low crude prices has put financial pressure on petroleum and gas service companies. Companies involved in the downstream of oil and gas were initially forced to halt their exploration and drilling initiatives due to uncertain events such as COVID-19. Maintaining a presence in the market was challenging due to the low revenue generated by the remaining ongoing projects.
However, as several oil and gas projects were put on hold, many oil rigs remained unutilized. Also, such oil rigs require regular maintenance so that the quality of rigs is not hampered. This uncertainty in commodity prices affects investments, which will negatively impact the growth of the market during the forecast period.
The market research report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
BP Plc - The company offers oil and gas downstream, which provides fuels, lubricants, and petrochemicals.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028
The Oil & Gas Downstream Market experiences notable developments, particularly in developing countries, driven by the rising demand for fuel-efficient and electric vehicles. Efforts in modernization impact the refining and petrochemical sectors, with a focus on reducing refining costs and minimizing process losses. The market is influenced by the availability of petroleum crude oil and raw natural gas, particularly in response to the dynamics of the transportation sector.
Factors such as the crack spread and geopolitical events like the Russian-Ukrainian war shape oil refinery capacity and operations, exemplified by facilities like Reficar oil refinery in Cartagena. Addressing environmental concerns, the industry emphasizes reducing sulfur content levels, leading to the production of ultra-low sulfur diesel and other cleaner middle distillates, impacting overall fuel prices
Oil and Gas Downstream Market Scope |
|
Report Coverage |
Details |
Page number |
159 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 2.93% |
Market Growth 2024-2028 |
USD 179.09 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
2.45 |
Regional analysis |
APAC, North America, Middle East and Africa, Europe, and South America |
Performing market contribution |
APAC at 39% |
Key countries |
US, Saudi Arabia, China, India, and Russia |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Bharat Petroleum Corp. Ltd., BP Plc, Chevron Corp., China National Petroleum Corp., Dow Chemical Co., Emirates National Oil Co. Ltd. LLC., ENEOS Holdings Inc, Exxon Mobil Corp., Hindustan Petroleum Corp. Ltd., Indian Oil Corp. Ltd., Kuwait Petroleum Corp., Marathon Petroleum Corp., Nayara Energy Ltd., Phillips 66, Reliance Industries Ltd., Rosneft Oil Co., Saudi Arabian Oil Co., Shell plc, TotalEnergies SE, and Valero Energy Corp. |
Market dynamics |
Parent market growth analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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