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The crude transportation market comprises infrastructure facilities such as pipelines, railcars, and oil tankers that are used to transport crude oil from production sites to refineries and export terminals. Pipelines remain the dominant mode of transportation for crude oil over long distances worldwide, despite increasing usage of railcars and oil tankers in certain geographies. Pipelines offer a cost-effective means of transporting crude oil in bulk quantities over land, while tankers and railcars help fill gaps in pipeline infrastructure providing connectivity to ports and refineries.
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 2023 to 2030. This growth can be attributed to the steady recovery in global oil demand following the Covid-19 pandemic, driving higher volumes of crude trade worldwide.
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. Crude pipelines facilitate bulk transportation of crude oil at low unit costs, which continues to give pipelines a competitive edge over tankers and railcars for long-haul onshore crude shipments. However, increasing utilization of railcars in geographies like North America is helping address pipeline capacity bottlenecks. With recovering global oil demand and expanding crude trade between regions such as Mideast-to-Asia, infrastructure players are making large pipeline and port expansion investments to capture opportunities. Rail terminal building is also accelerating to connect new US shale oil basins to coastal ports. Similarly, international marine terminals in countries/regions like UAE, China and Latin America are ramping up capabilities for both inbound and outbound crude trade over the long term.
Market Drivers
Recovery in global oil demand following Covid-19 is driving higher trade volumes of crude oil globally via all modes of transportation like pipelines, railcars and tankers. Majority of demand rebound has been in Asian countries like China and India, necessitating more Mideast crude shipments to the region through expanded infrastructure capacity. Similarly, growing US shale oil production has increased connectivity needs between shale basins and ports served by both pipeline expansions as well as increased use of railcars. Globalization of oil trade and inter-regional arbitrage opportunities is another factor that aids the development of new, international crude pipelines as well as increasing crude tanker traffic on key trade routes.
Market Restrain
Adoption of renewable energy sources and initiatives towards energy transition pose a long term challenge for continued dependence on crude oil. Policies encouraging electrification of road transport and subsidy cuts for fossil fuels could impact future demand trends for crude oil and its transportation needs. Environmental issues around construction of new pipelines due to land use impact and disruptions during maintenance also hamper capacity expansion plans of pipeline companies. Geopolitical tensions in oil producing regions remain a key non-commercial risk associated with global crude transportation infrastructure.
Segment Analysis
The crude transportation market can be segmented by mode of transportation which includes pipeline, tankers, and others. Among these, the pipeline segment dominated the market in 2023 and is projected to continue its dominance during the forecast period. Pipelines are the safest and most economic mode of transporting crude oil over land. They offer bulk transportation of crude oil over long distances from production areas to refineries or storage terminals.
The tankers segment is the fastest growing segment in the crude transportation market. Tankers are used to transport crude oil across seas as they offer flexibility to transfer crude between countries depending on demand dynamics. Tankers move 45% of the total volume of transported crude oil globally. Tanker transportation is expected to increase significantly during the forecast period due to rising offshore oil production and increasing seaborne trade of crude oil.
Global Analysis
North America dominated the global crude transportation market in 2023 followed by Asia Pacific and Europe. In North America, the dominance of the pipeline mode of transportation and increasing oil production from shale reserves like Bakken and Permian basin drove the regional market growth.
Asia Pacific is projected to witness the highest growth during the forecast period owing to rapid growth in crude oil imports in countries such as China, India and other southeast Asian nations. Rising energy demand from industrialization and lack of domestic oil reserves in the region are key drivers for market growth. China and India also continue to strengthen their strategic petroleum reserves which will drive higher seaborne trade of crude oil and therefore increase tanker transportation activities in Asia Pacific during the forecast period.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
