Demulsifier Market Size, Share & COVID-19 Impact Analysis, By Type (Oil-soluble and Water-soluble), By Application (Crude Oil, Sludge Oil Treatment, Petroleum Refining, Lubricants, and Others), and Regional Forecast, 2021-2028

The global demulsifier market size was USD 2,150.0 million in 2020. The global impact of COVID-19 has been unprecedented and staggering, with the product witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 0.52% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 2,236.4 million in 2021 to USD 2,949.4 million in 2028 at a CAGR of 4.0% during the 2021-2028 period. The sudden decline in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The demulsifier market is expected to show significant growth owing to the increasing demand for petroleum and petroleum products. These, also known as emulsion breakers, are chemicals used to break the emulsions produced during crude oil manufacturing. The rapidly increasing extraction activities of crude oil is one of the prime factors driving the market growth.

COVID-19 Pandemic: Halt in Production Activities to Hamper Market Growth

The COVID-19 pandemic has resulted in heavy disruptions of economic conditions of various sectors all over the globe. Oil exporting countries have been experiencing a double blow of the pandemic, as well as oil price shock, especially when there is a structural decline in the fossil fuel industry. The nationwide lockdown had a negative impact on the crude oil production and petroleum refining industries, which hold more than 50% of the share in the market.

Halt in production activities as preventive measures suggested by organizations, such as the World Health Organization, and their implementation by governments in countries resulted in the decline in the supply. Oil and gas exploration projects are highly dependent on foreign merchants for the supply of machinery and equipment. The outbreak of COVID-19 and the obligation of global restrictions disrupted the supply chain for such machinery, which further resulted in the halt in project implementation.

Containment measures and the disrupted economic stability after the outbreak of COVID-19 have led to a slowdown in production and mobility across the world, which resulted in a sudden drop in the demand for oil. It subsequently affected the market. In April 2020, the International Energy Agency (IEA) estimated that the demand for oil was down by 30% compared to the previous year. However, the development of vaccines, coupled with the permission for production activities with a limited workforce and certain protocols, shall aid in the rebound.

LATEST TRENDS

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Development of Green Demulsifier to Offer More Opportunities

Due to the negative effects of chemical products on the environment, governments have banned the use of certain chemicals that are used in this product. Considering this as an opportunity, various companies have started conducting research for developing green, biodegradable, and environment-friendly products. These green emulsion breakers can be developed from plant extracts and vegetable oils.

According to research carried out by the Japan Petroleum Institute, two compositions of plant extracts that are able to break the emulsions are green tea extracts and vegetable oils, such as coconut oil and olive oil. These extracts can be further employed in developing green, non-toxic, and eco-friendly demulsifier. Additionally, another research conducted by the University of Malaysia suggests the use of silicone derivatives E4 and E7 for the development of green emulsion breakers for oil production. Extensive research in developing such green demulsifier supported by the stringent regulations on the usage of chemical products shall serve as an opportunity.

DRIVING FACTORS

Increasing Crude Oil Exploration Activities to Propel Market Growth

Demulsifiers are specialty chemicals that are intended to break the emulsions and separate them into oil and water. They are highly employed in crude oil processing, which occurs in the form of stable emulsions. The formation of emulsion significantly affects production facilities and oil recovery operations. Emulsion breakers are employed to separate the saline water from the extracted crude oil. The increasing demand for crude oil across the world is expected to drive the product’s demand. For instance, the U.S. Energy Information of America estimated that the average consumption of liquid fuel in 2021 will be 97.7 million b/d and will further rise to 101.3 million b/d in 2022. The high demand for petroleum and crude oil-derived fuels shall significantly boost the market growth.

Moreover, discoveries of new oil fields and oil reserves shall serve as an opportunity for the market. Crude oil production is directly proportional to market growth. In December 2020, Saudi Arabia’s Aramco announced the discovery of four new oil and gas fields. This shall add up to the production capacity of crude oil, which shall further drive the demand.

Rising Demand for Chemical Demulsifier to Drive the Market

Petroleum refining is one of the major application segments. The high demand for petroleum products, such as fuel oil, kerosene, butane, diesel, liquefied petroleum gas, and others from various end-sectors shall influence the market growth. The increasing adoption of chemical products intended to break the emulsions extracted during oil explorations and process them to petroleum products shall positively affect the market. The high efficiency of chemical emulsion breakers due to the strong affinity towards the water-oil interface is another factor driving the growth of the market. They include polyether, biodegradable polymeric surfactants, dendrimers, and others. Copolymers with high content of hydrophiles and molecular weight are efficient products. This shall drive the market for emulsion breakers.

RESTRAINING FACTORS

Stringent Regulations Imposed by Governments May Hamper Market Growth

Traditionally used chemical demulsifiers are effective in performing W/O emulsions, but on the other hand, they are restricted by governments due to the negative effect they have on the environment. These chemicals are toxic in nature and can severely cause damage to the environment during water disposal. Commercially available polymer surfactants that include polypropylene and polyoxyethylene contain methylbenzene. The separated water, after demulsification, is discharged into the sea, which causes contamination of the environment. Government authorities have imposed heavy restrictions on the usage of certain toxic chemicals. This is expected to hinder market growth.

SEGMENTATION

By Type Analysis

Oil-soluble Segment to Generate Major Share Due to Higher Efficiency

Based on type, the market is segmented into oil-soluble and water-soluble. The oil-soluble segment held the major share of the market in 2020. Oil-soluble emulsion breakers are comparatively more effective than water-soluble demulsifier attributed to the higher hydrophilicity. They are employed in stabilizing and breaking the water-in-oil emulsions. The oil-soluble demulsifier helps in improving the burning characteristics of fuel and is also required in lower dosages.

Water-soluble is another segment significantly contributing to the market. They are used in separating the oil in water emulsions. These are comparatively lower in cost than their oil-soluble counterparts, which makes them an economical choice. The increasing research regarding the use of water-soluble polymer demulsifier would considerably contribute to the market growth.

By Application Analysis

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Crude Oil Segment to Hold Significant Share Due to High Demand from Exploration Industry

The market is segmented into crude oil, sludge oil treatment, petroleum refining, lubricants, and others in terms of application. The crude oil segment constituted the leading demulsifier market share of almost 30% in 2020. The growing demand from the crude oil exploration industry is further driving the demand. Besides, discoveries of new oilfields and crude oil reserves shall significantly contribute to the market growth. For example, in November 2020, an estimated 22 million barrels of conventional and recoverable crude oil were discovered in Abu Dhabi. The Supreme Petroleum Council of Abu Dhabi stated that the country’s conventional oil reserves could be increased by 2 billion barrels.

Petroleum refining is one of the prominent segments contributing to the market growth. The high demand for petroleum products, such as kerosene, gasoline, diesel, and others, shall drive the segment’s growth. Demulsifiers are employed in lubricants to avoid corrosion and damage from impurities in the fuel. The increasing adoption of these chemicals in lubricant manufacturing shall aid growth.

REGIONAL INSIGHTS

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The market size in North America stood at USD 636.4 million in 2020. The region dominated the market and is anticipated to maintain its position during the forecast period. It holds the key share in the global demulsifier market attributed to the high demand from the massive oil production base. The U.S. is the leading oil-producing country attributed to the presence of large oil reserves. Additionally, the large manufacturing base is likely to boost the regional market growth.

The Middle East & Africa is expected to hold a prominent share in the market attributed to the large oil and gas reserves present in countries such as Kuwait, Iran, Iraq, Saudi Arabia, UAE, and others. The high-end petroleum and oil extraction activities in the region shall also substantially drive the demand for the product. Additionally, discoveries of new oil reserves in Saudi Arabia and Abu Dhabi shall significantly impact the market growth.

Asia Pacific is expected to hold a significant share attributed to the presence of many end-user industries. China holds almost a 5% share in terms of global oil production. Besides, India has the largest petroleum refinery with a capacity of 1.27 million barrels per day, which subsequently employs emulsion breakers in a large amount. This is expected to drive regional market growth.

Europe is expected to show considerable growth attributed to the presence of an ample number of manufacturers, namely, Baker Hughes Incorporated, Croda International, Ecolab Inc., Clariant, Schlumberger Limited, BASF SE, Clariant, and others. Moreover, the high demand from lubricant manufacturing companies shall positively impact the market growth.

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South America is experiencing a boost in the economic and industrial sector attributed to the rapid industrialization and development in countries such as Brazil, Mexico, Argentina, and others. The increasing demand for crude oil from various sectors shall, in turn, uplift the regional demand.

KEY INDUSTRY PLAYERS

Key Companies Focus on Adopting Various Strategies to Broaden their Market Presence

With a few global players capturing a significant share, the market is concentrated in nature. Baker Hughes Incorporated, Croda International (US), Ecolab Inc. (US) Clariant (US), Schlumberger Limited (US), BASF SE (Germany), Nouryon (Netherlands), Momentive Performance Materials (US), Innospec Inc. (US), Dorf Ketal (India), Chemiphase Ltd. (UK), MCC Chemicals Inc. (US), Rimpro India (India), Oil Technics Holdings (UK), Roemex Limited (India), and Reda Oilfield (UK) are some of the market's key players.

Market players operate principally based on the product's price and performance. To boost the company’s market position and achieve a competitive advantage, several major players are engaged in numerous planned product launches and research to promote their brand and sales. For instance, Ecolab acquired Champion Technologies and Corsicana Technologies and further set up a new business unit under the name of Nalco Champion to strengthen the demulsifier business.

LIST OF KEY COMPANIES PROFILED:

• Baker Hughes Incorporated (Texas, US)


• Croda International (Snaith, UK)


• Ecolab Inc. (Minnesota, US)


• Clariant (Muttenz, Switzerland)


• Schlumberger Limited (Texas, US)


• BASF SE (Ludwigshafen, Germany)


• Nova Star LP (Texas, US)


• Nouryon (Amsterdam, Netherlands)


• SI Group (New York, US)


• Innospec Inc. (Colorado, US)


• Dorf Ketal (Mumbai, India)


• Chemiphase Ltd. (Lancashire, UK)


• Dow Chemical Company (Michigan, U.S.)


• Rimpro India (Mehsana, India)


• Oil Technics Holdings (UK)


• Other Key Players

KEY INDUSTRY DEVELOPMENTS:

• October 2019 – Nouryon introduced Witbreak NEO, a new and sustainable range of emulsion breakers for oil producers to separate crude oil from natural gas and water.


• August 2019 – Nouryon planned to double the surfactant capacity in Sweden to support the growing innovation pipelines for the oil & gas market. The innovative technologies and chemicals include biodegradable demulsifier.

REPORT COVERAGE

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The global market research report provides a detailed analysis of the industry and focuses on crucial aspects, such as leading companies, products, and raw materials. In addition, it offers insights into market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors contributing to the market's growth in recent years.

This report includes historical data and forecasts revenue growth at global, regional, and country levels. It also analyzes the industry's latest market dynamics and opportunities.

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