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Crude oil is a complex mixture of hydrocarbons that is refined into various petroleum products such as gasoline, diesel, jet fuel, heating oil, lubricants, and petrochemicals. The increasing globalization and free trade have increased demand for petroleum products worldwide leading to increased production of crude oil. In order to efficiently transport crude oil from producing regions to refineries located globally, various modes of transportation such as oil tankers, pipelines, rail tank cars, and oil tank trucks are used. Pipelines remain the most cost effective way to transport massive volumes of crude oil over land. However, tankers remain indispensable for international shipments of crude oil as well as domestic shipments along coastal regions. The 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 2024-2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends in the crude transportation market is the expansion of existing pipeline infrastructure as well as development of new pipelines. For instance, in December 2021, Enbridge Inc. completed the US$0.5 billion expansion of Line 3, one of the largest crude oil pipelines in the world carrying crude from Alberta to refineries in the Midwestern United States and Ontario. Similarly, key players are investing in pipeline projects connecting crude producing regions to coastal regions for loading onto tankers. For example, Saudi Aramco is developing the USD 10 billion East-West crude oil pipeline that will link the Persian Gulf coast to the Red Sea thereby connecting key export terminals. Such pipeline projects are helping meet the growing demand for transportation of crude oil in a cost effective manner.
Porter’s Analysis
Threat of new entrants: The crude transportation market requires high capital investment for pipeline construction and tanker fleet which acts as a barrier for new entrants.
Bargaining power of buyers: Large oil companies have significant bargaining power over independent pipeline and shipping companies due to their dominant market position and ability to transport crude through multiple options.
Bargaining power of suppliers: A few dominant national and international oil companies control global crude oil production which gives them strong bargaining power over transportation service providers.
Threat of new substitutes: Limited substitution possibilities exist for crude oil transportation given pipelines and tankers are specialized means of transportation over long distances.
Competitive rivalry: Intense competition exists among major pipeline operators and tanker companies to transport crude for integrated oil majors and trading companies.
Key Takeaways
The global crude transportation market is expected to witness high growth over the forecast period supported by rising crude trade volumes.
Regional analysis: The Asia Pacific region is expected to grow at a fastest pace in crude transportation during the forecast period. Countries like China, India and Japan are major importers of crude oil in the region with increasing consumption. This is expected to drive demand for transportation of crude oil to Asia Pacific nations through tankers.
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., and Enbridge Inc.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
