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The crude transportation market involves the transportation of crude oil from production to refining locations through various modes such as pipelines, rail tank cars, oil tankers and trucks. Crude oil transportation via pipelines is the most preferred mode due to its cost effectiveness and bulk transportation capacity. The growing global crude oil trade has significantly increased the demand for transportation of crude oil across 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 of 2023 to 2030. The rising energy demand coupled with increasing crude oil production has amplified the need for reliable crude transportation infrastructure and facilities on a global level. Pipelines remain the primary mode for inland transportation, while seaborne trade relies on oil tankers.
Key Takeaways
Key players operating in the crude transportation market include 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. These companies have huge pipelines and oil tanker fleet that cater to majority of global crude oil trade.
The growing energy demand from developing countries of Asia Pacific and Africa open lucrative opportunities for crude transportation service providers and infrastructure developers to invest in new export-import corridor development. Countries like India and China have increased their reliance on imported crude oil manifolds, driving the need for establishment of new marine crude transportation routes.
The increasing shale production from United States has encouraged American companies to expand their global footprint by acquiring oil assets and marketing rights overseas. This has generated demand for long-haul crude transportation via VLCC and Suezmax tankers. Midstream companies are also eyeing opportunities in new markets by collaborating with national oil companies on strategic pipeline projects.
Market Drivers
Rising global energy demand: Growing population and industrial activity have amplified the worldwide energy consumption manifold over the past few decades. This has significantly driven the production and trade of crude oil across regions, necessitating the expansion of transportation infrastructure and services.
Increasing long-haul seaborne trade: The shale revolution has transformed the United States into a key global oil exporter. Also, West Africa and Middle East continue to pump more volumes for import-driven Asian markets. This has augmented the volume of crude oil transported through long-haul marine routes via VLCC and Suezmax tankers.
Market Restrain
Climate change policies: Regulations around the world to transition to greener fuels and reduce dependence on fossil fuels may act as a headwind for future growth of the crude oil transportation industry. Carbon taxation and renewable energy mandates would impact the demand prospects of oil over the long run.
Alternate transportation fuels: The proliferation of alternate fuels like LNG, hydrogen, and electric may slowly substitute the usage of crude-oil based fuels across various sectors including shipping. This poses a long-term challenge for the sustainability of crude transportation infrastructure.
Segment Analysis
The crude oil transportation market is dominated by the pipeline sub-segment owing to its cost effectiveness for transporting bulk quantities of crude oil over long distances on land. Pipelines allow the mass transfer of crude oil from production facilities and refineries in a safe, reliable and cost-effective manner. They have significantly higher throughput when compared to rail and roadways. For bulk crude transportation over 500 miles, pipelines are the most economical option with maximum throughput.
Global Analysis
Regionally, Crude Transportation Market North America holds the largest share in the crude transportation market currently due to the ongoing oil and gas exploration and production activities in the US and Canada. Countries like the US, Canada and Mexico have an extensive pipeline network to transport crude oil from the major production centers to the refineries. Additionally, the region is a net exporter of crude oil. The Asia Pacific region is expected to witness the highest growth during the forecast period owing to the rising energy demands from the developing economies of China and India. Countries in the Middle East are focusing on expanding their pipeline networks and build strategic transportation corridors to connect oilfields with international markets.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
