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The global refined petroleum products market size was USD 586.27 billion in 2020. The market is projected to grow from USD 611.94 billion in 2021 to USD 863.19 billion in 2028 at a CAGR of 5.0% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with refined petroleum products witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of -12.4% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s growth and demand, returning to pre-pandemic levels once the pandemic is over.
The market comprises sales of refined petroleum products by organizations (partnerships or sole traders) that transform crude petroleum into refined products such as diesel fuel, gasoline, liquefied petroleum gas, naphtha, and others. Petroleum refineries are huge industrial complexes containing extensive pipeline networks carrying refined products and crude oils between sub-processing units. The market segmentation includes products such as gasoline, diesel, fuel oils, kerosene, and other products.
Global Fluctuations in Crude Oil Prices and Supply Chain Disruptions to Affect Market Dynamics
COVID-19 pandemic has severely affected the global oil & gas sector, which has resulted in lack of storage capacity. Countries with major share in global extraction and production of crude oil and exporters have been hit hardest by the blockage in supply chains of the oil & gas industry. This condition has forced major oil & gas private producers to reorganize their operations to revise their year-to-date spending. A notable decline in projected investments was observed, leading to slowed market growth during the pandemic. Countries around the world are taking restrictive containment measures that include physical or social distancing measures to overcome the pandemic situation that used to lead to restrictive processes. On the other hand, social distancing practices of remote work are being carried out in several developed and underdeveloped regions to achieve their pending goals.
Countries which are net exporters of oil have experienced an unprecedented double blow with contraction of global economy driven by the COVID-19 pandemic and an oil market collapse with the West Texas Intermediate, the benchmark price for the United States crude oil, briefly going negative for the first time in history (in April 2020).
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Increasing Utilization of Various Refined Petroleum Products in End-Users Will augment the Market
Refined petroleum products find application as a raw material in various products manufactured and utilized around the world. The automotive industry has grown rapidly over the past few years and products such as Autogas (Liquefied Petroleum Gas used for transport) are increasingly being used. Global consumption of autogas has increased tremendously over the last two decades and reached a new level of 27.1 million tonnes in 2019. The upheaval caused by the Covid-19 crisis economically resulted in a significant fall in the consumption of autogas with other transport fuels in 2020. The introduction of motor gasoline in the automotive industry has increased significantly in recent years. The use of the Liquefied PG has been increasing at a tremendous rate in developing countries, driving the market for these products. In addition, countries around the world are increasingly using carbon capture techniques to control CO2 emissions in their region.
Growing Investments for Strategic Petroleum Reserves and Increase in approval of Oil Trade Agreements between Countries will Compliment Market Outlook
Global strategic petroleum reserves (GSPR) are the raw petroleum inventories held by the public authority of a specific country, as well as private industry, to protect the economy and assist with keeping up with national security during an energy crisis. Strategic reserve is expected to be utilized to cover momentary stockpile interruptions. To meet the demand for oil in case of import crisis or failure, the necessity of the strategic petroleum reserves (SPR) has compelled countries to prioritize their refinery capacities. For example, all 27 European Union (EU) countries are required to have a strategic petroleum reserve that can fuel at least 90 days of domestic usage.
Increasing Utilization of Autogas in transportation as an alternative fuel
Autogas is the alternative name for automotive LPG. Autogas is the most widely utilized non-blended alternative to conventional oil-based transport fuels, gasoline, and diesel, in terms of its fleet size. Several countries have well-developed autogas markets. Consumption of autogas globally has increased steadily over the last two decades, reaching a new level of 27.1 million tonnes in 2019 with an increase of 1% over the previous year. Demand has nonetheless slowed in recent years, partly because of improvements in fuel economy and a contraction of the autogas fleet in some major markets. These all factors are expected to augment the market during the forecast period.
Rising Demand for Refined Petroleum End Products to Propel Growth
Different products derived from refined oil incorporate diesel, gasoline, kerosene, aviation fuel, and others. Lately, the automotive sector has developed dramatically and marine tasks have likewise expanded. The aviation business has gotten a move on with the increment in air traffic along with the LPG used as a petrochemical feedstock in chemical sector has likewise developed with the introduction of new products. Such factors have expanded interest for diesel, gasoline, lubricants and others, which straightforwardly drives the possibilities for refined oil based products further helping the development of new treatment facilities.
Growing Renewables Expansion to Hamper Oil & gas Industry Trends
The expanding adoption of renewable power resources is a key factor affecting the market growth. This has brought about the closure of different industrial sectors that use petroleum products and were viewed as significant contributors to global warming. Plus, ambitious renewable energy goals have been set by several countries and associations globally to increase the share of renewables in the overall energy mix. The market growth also hampered by the emission of carbon-based gases and generation of hazardous waste from petroleum refineries and treatment facilities. To overcome this scenario, a few nations across the globe are setting focuses to control CO2 outflow via carbon catch and capacity strategy. Likewise, barricades in the oil & gas industry during the pandemic have brought about functional difficulties for various key players.
Diesel to Experience Robust Demand Backed by Growing Usage in Several End-use Sectors
Based on product type, the market is classified into gasoline, diesel, fuel oils, kerosene, and others.
It is estimated that diesel is the market leader as it is used extensively in marine fuels, in the automotive sector and in the manufacture of aviation fuel. The majority of heavy-duty vehicles today still run on diesel. Gasoline and heating oils will also see healthy growth with increase in more gasoline-powered cars and air travel.
Fuel Application Segment to Dominate Led by Increasing Automotive Fleet Size
Based on application, the global refined petroleum products market share is split into fuel, chemical, and others.
Fuel is expected to lead the market owing to its wide-scale application in the automobile and industrial sectors. Based on its applications, fuel is further classified into automobile and power generation segments. According to EIA, in 2020, the U.S.’ 66% of refined crude oil products are consumed by the transportation sector, 28% by industrial, 3% by residential, and 2% by the commercial sector. On the other hand, these products have application in the petrochemical industry as they are used to produce petrochemicals, including fertilizers, plastic, synthetic rubber, latex paints, explosives, and drugs.
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Middle Distillates Will Boost the Market Outlook
Based on fraction, the market share is broken down into light distillates, middle distillates, and heavy oils.
Middle distillates have dominated the market over the past few years as they comprise a significant portion of these products. Products in middle distillates are kerosene, jet fuels, diesel, and others. Light distillates include products such as gasoline, LPG, naphtha, and others. Light distillates are expected to grow due to the increasing automotive sector in developed as well as undeveloped regions. Heavy fuel oil (HFO) is a prime marine fuel majorly in the West Africa region, which is estimated to rise significantly due to the presence of power industries in the region.
Asia Pacific Refined Petroleum Products Market Size, 2020 (USD Billion)
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The market size for refined petroleum products in Asia Pacific was USD 187.74 billion in 2020. Energy consumption and demand for refined petroleum products has surged significantly across India and China. A large part of the electricity supply in APAC countries is still provided by oil. In addition, refineries in the Asia Pacific region have increased production rates as demand in the region increases. For example, in November 2021, Indian Oil Corp, the country's largest state-owned refiner, operated its nine refineries at about 90% utilization in October. In September, IOC recorded an average run rate of about 82% for its nine refineries, compared to 83% a year earlier.
The market in Europe will record notable growth due to production capacity expansion by several major players. Several European countries depend on oil imports to meet their energy needs. The refinery expansion is to be carried out in accordance with the energy demand.
In the North American region, the recent surge in oil product exports creates a tremendous growth opportunity for the production of refined crude oil products. In addition, merger activity in the region strengthen the regional outlook. For example, in August 2021, Holly Energy Partners LP in a $758 million deal and HollyFrontier Corp. secured definitive agreements in which they will acquire Sinclair Transportation Co. and Sinclair Oil Corp. in a deal valued at $1.8 billion.
Royal Dutch Shell and Exxon Mobil Corporation are Some of the Major Market Players
Royal Dutch Shell and Exxon Mobil Corporation are the market leaders in the industry. These players hold a large chunk of the market occupied with refined petroleum products spread across North America, Europe, and Asia-Pacific. Also present in the market are other big players such as Sinopec Limited, BP, and Valero Energy that have refineries in their active regions. High brand value along with an extensive global customer reach compared to other companies has empowered Royal Dutch Shell to develop a strong presence in the global petroleum products market.
An Infographic Representation of Refined Petroleum Products Market
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The global market research report provides a detailed refined petroleum products industry analysis 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 Product Type, By Application, By Fraction, and By Region
By Product Type
Fortune Business Insights says that the global refined petroleum products market size was USD 586.27 billion in 2020 and is projected to reach USD 863.19 billion by 2028.
In 2020, the refined petroleum products market value stood at USD 586.27 billion.
Growing at a CAGR of 5.0%, the refined petroleum products market will exhibit healthy growth during the forecast period (2021-2028).
Middle distillates are expected to be the leading segment in this refined petroleum products market during the forecast period.
Increasing demand for refined petroleum products is driving the refined petroleum products market, owing to rising consumption of these products across aviation, automobile, chemical, and other industry verticals to directly drive the requirement for refined crude oil products and will lead to the refining activities of these products.
Exxon Mobil Corporation, Royal Dutch Shell, BP Plc, Chevron, Saudi Aramco, and Valero Energy are among the leading players in the global market.
Asia Pacific dominated the refined petroleum products market share in 2020.
Rising adoption of renewable sources for power generation, green energy targets set up by several countries, emission of carbon, and generation of hazardous waste from petroleum refineries will hamper the refined petroleum products market growth.
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