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The global oil storage terminal market size was USD 29.32 billion in 2020. The market is projected to grow from USD 30.16 billion in 2021 to USD 41.50 billion by 2028 at a CAGR of 4.7% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with oil storage terminals witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a significant growth of 7.0% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s growth and demand, returning to pre-pandemic levels once the pandemic is over.
Oil storage tank terminals are the most critical parts of the oil and gas supply chain across the globe. These terminals are the heart of the oil and gas trading between countries. The nations majorly dependent on their oil imports and nations producing oil in surplus amounts all have the presence of these terminals. The storage of crude oil and its products is done for strategic reserve purposes or commercial purposes. There are different types of storage tanks that are used for storing crude oil. A floating roof and fixed roof are the types that are majorly being used.
Fluctuating International Crude Oil Prices along with Supply & Demand Trends amid COVID-19 Pandemic May Alter the Market Growth
The COVID-19 pandemic has heavily impacted the global oil and gas industry, which has further led to a shortage of storage capacities. The oil-producing nations and major exporters are the worst affected by the blockade of the oil and gas supply chain. This situation has compelled major oil and gas companies to revise their expenditures for the current year. Projected investments have declined, and thus, the oil storage terminal market growth is expected to have a slow recovery rate in the coming years.
The decrease in demand for oil and oil products has halted the production processes at both offshore and onshore locations. Therefore, the oil storage tank terminal construction and up-gradation projects are expected to be pushed further due to the slowdown in the industry. This factor will undoubtedly impact the yearly investments in the market growth for a specified period.
Asia Pacific, which includes China and India, will witness a shutdown of about 250,000 b/d of oil production in the coming months owing to the global pandemic. In the post–lockdown period, these countries are set to witness a rise in demand and will focus on carrying out the projects which would help in fulfilling the demand for oil products in their country. Similarly, the U.S., which is also one of the leading oil refining countries, will witness a short-term backlog for the exportation of its refined products.
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Expansion of the Application Sector for Various Crude Oil Products Will Drive the Market Development
Crude oil is used as a raw material in many of the products that are manufactured and used worldwide. The automobile industry has risen at an exponential rate in recent years, and new products such as liquefied natural gas are increasingly used in this field. The adoption of liquefied petroleum gas was in a very small percentage in the last decade. Still, the utilization of the same has increased at a very healthy rate in developing nations. Therefore, the demand for storage terminals at high-pressure conditions has also increased.
Rising Investments for SPR and Increasing Oil Trade between Countries to Aid Market Growth
The requirement of the strategic petroleum reserves (SPR) has compelled countries to prioritize their storage capacity expansion to suffice the oil demand in case of import failure or crisis. For instance, every country under the European Union is obliged to have a strategic petroleum reserve equal to 90 days of average domestic consumption. Also, the oil trade between countries is expected to increase in the forecast period, which will certainly require countries to invest more in storage terminals.
Growing Demand for Energy Will Surge the Growth of the Market
The increasing demand for energy owing to the rising population and rapid urbanization is a primary reason that has influenced the construction of new terminals. According to a report by the United Nations (UN) Department of Economic and Social Affairs in June 2017, the world population is expected to be approximately 9.8 billion in 2050 and 11.2 billion in 2100. This will surely drive the construction of these terminals by countries to suffice the country’s demand for oil or generating revenue by commercial use of the same.
Increasing Demand for Various End Products of Crude Oil to Drive Market Growth
The various products obtained from crude oil include diesel, petrol, aviation fuel, kerosene, and others. In recent years the automobile industry has expanded rapidly; the marine operations have also increased. The aviation sector has gained pace with growing air traffic, and the chemical industry has also grown by introducing new products. These growth factors have increased the demand for diesel, petrol, lubricants, and others, which directly drive the need for more crude oil and, therefore, the construction of these terminals.
Rising Adoption of Renewable Energy Poses Threat to Oil and Gas Industry
One of the key market restraints for the oil storage terminals market is the rising adoption of renewable sources for power generation. This has resulted in the shutting down of many industries that used fossil fuels and were considered major contributors to the cause of global warming. Also, green energy targets are being set up by countries and unions across the globe to have maximum power using green energy sources. The other factor hampering the market growth is the high cost required for the construction of the terminal and the required maintenance during its lifetime.
Increasing Oil Trade Will Surge the Demand for Commercial Terminals
Based on type, the oil storage terminal market is segmented into strategic reserve and commercial reserve. The commercial reserves have dominated the market over the past few years as a significant portion of the constructed terminals are designed for the commercial use of crude oil. The strategic reserves of a country are only kept to suffice the energy demand for a nation in case of emergency or import failures. Therefore, the capacity of these terminals is limited, and on the other hand, commercial storage expansions take place regularly with fluctuating demand for energy and imports.
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Floating Roof Tanks Will Dominate the Market Owing to Their Operational Advantages
Based on tank type, the global oil storage terminals market is segmented into floating roof, fixed roof, spherical tanks, and bullet tanks. Currently, the fixed-roof tanks segment dominates the market, but with the introduction of new technology and with certain advantages, floating roof tanks are expected to boost the market growth during the upcoming years. The no-gap space between the floating roof deck and oil level helps in reducing the evaporation losses of the stored crude oil. The floating roof also helps to maintain a better quality of the stored liquids.
Application of Diesel Across Various Sectors Will Lead to Its Domination in The Market
In terms of product, the market is segmented into diesel, petrol, aviation fuel, kerosene, crude oil, and others. Diesel is expected to lead the market as it is widely used in the automotive sector, marine fuels, and in the manufacturing of aviation fuel. The majority of the heavy load vehicles today are still running on diesel. Petrol and aviation fuel will also have healthy growth with increasing automobiles being run on petrol and increasing air traffic.
Asia Pacific Oil Storage Terminal Market Size, 2020 (USD Billion)
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The oil storage terminal market size in the Asia Pacific stood at USD 9.90 billion in 2020. The demand for energy and petroleum products has increased in countries like China and India. A major portion of the power and energy supply in these countries is still being done by crude oil. South Korea and Singapore are a hub for oil storage in this region. Additionally, divestments activities by several companies in the region are likely to trigger new expansion plans and propel the industry outlook. For example, in December 2020, Brightoil Petroleum has sold around 90% of the shares in its Hong Kong-based division, which also includes the Zhoushan oil storage and terminal facilities to Yantian Group. The total capacity of the Brightoil Zhoushan oil storage facility is 3.16 million m3, with a capacity of 1.94 million m3 in phase 1 and 1.22 million m3 in phase 2.
In Europe, the market for oil storage terminals is expected to witness healthy CAGR owing to increasing production capacities from several key players. Many countries in the region are dependent on oil imports for fulfilling their energy demands. And following the increase in demand for energy, the storage capacity expansion is expected to be carried out. In addition, the increasing efforts by the key players to experience organic and inorganic expansions are projected to boost the regional landscape.
For instance, in November 2020, CLH Group has secured the acquisition of 15 Inter liquid product storage terminal facilities in Ireland, Germany, the Netherlands, and the UK from Inter Pipeline. After this acquisition, the total capacity of CLH will increase by 18 million bbl, and the cost of the project is EUR 457 million or around USD 400.78 million. By strategy of diversification linked to climate change and international expansion, CLH is now one of the major liquid terminal companies in the region, having operations in eight countries.
Besides, across North America, the recently started export of oil products holds numerous growth opportunities for storage terminals construction. Additionally, merger activities in the region are expected to positively enhance market growth. For instance, in July 2020, BW Terminals, a US-based liquid storage provider completed their merger with Contanda and will be known as BWC Terminals. The joint venture now owns 17 sites with around 10 million bbl of storage capacity. A new Jacintoport facility based at the Port of Houston is currently being built by the company, which will increase the capacity by 3 million bbl. Latin America and the Middle East and Africa being the major oil-exporting nations, the presence of these terminals in these regions are limited.
Royal Vopak and Oil Tanking GmbH are Among the Leading Players in the Market
The competitive landscape of the market depicts a market dominated by Royal Vopak and Oiltanking Gmbh. These companies hold a major portion of the market covered with storage terminals spread across Europe, North America, and the Asia Pacific. The market also has the presence of local players such as HMT Tanks, Containment Solutions, Superior Tank, and others that have storage terminals in their active regions. The widespread customer reach in various parts of the world, along with higher brand value as compared to other players, has been the prominent factor for companies like Royal Vopak to establish a strong footprint in the global market.
An Infographic Representation of Oil Storage Terminal Market
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The global oil storage terminal market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD Billion)
By Type, By Tank Type, By Product, and By Region
By Tank Type
Fortune Business Insights says that the global market size was USD 29.32 billion in 2020 and is projected to reach USD 41.50 billion by 2028.
In 2020, the market value stood at USD 29.32 billion.
Growing at a CAGR of 4.7%, the market will exhibit healthy growth rate during the forecast period (2021-2028).
Floating roof tanks are expected to be the leading segment in this market during the forecast period.
Increasing demand for crude oil products is fueling the demand for oil storage terminals, due to the rising consumption of crude oil products across aviation, automobile, and chemical, among other industry verticals to directly drive the requirement for crude oil and will lead to the construction coupled with the expansion of these terminals.
Royal Vopak, Oiltanking GmbH, Vitol, LF Manufacturing, CST Industries, and Red Ewald are among the leading players in the global market.
Asia Pacific dominated the market share in 2020.
Wide-scale utilization of products & by-products of crude oil distillation as a raw material to manufacture goods across many application sectors will drive the market growth.
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