United Kingdom, London, Nov. 12, 2024 (GLOBE NEWSWIRE) -- Oil and gas fields and the upsurge in oil and gas exploration and production activities are likely to fuel the market growth. The growing demand for the contract logistic service owing to their advanced technologies and more specialized service are expected to impel the market growth in the coming years.
Introspective Market Research is excited to announce the launch of its latest publication, the "Oil and Gas Logistics Market" report. This in-depth examination shows that the worldwide Oil and Gas Logistics Market, valued at USD 15.6 Billion in 2023, is anticipated to increase substantially and reach USD 21.26 Billion by 2032. This strong growth translates to a solid compound annual growth rate (CAGR) of 3.5% from 2024 to 2032.
The Logistics of Oil, Gas and Petroleum Products involves the movement and storage of these valuable commodities from production sites to refineries, storage facilities, and end-users. Logistics is a critical component of the oil and gas industry, as it ensures that products are transported safely, efficiently, and cost-effectively. The transportation modes used in the oil and gas industry include pipeline transportation, maritime shipping, trucking, and rail transport. Each mode has its advantages and disadvantages, and the choice of transportation mode depends on factors such as the location of production sites, the distance to markets, and the quantity of products to be transported.
In addition to transportation, petroleum terminals play a key role in the logistics of oil, gas, and petroleum products. These terminals are used for storage, blending, and distribution of products, and they are typically located near major transportation routes. Environmental considerations are also important in the Logistics of Oil, Gas and Petroleum Products. Regulations are in place to ensure that products are transported and stored safely, and to mitigate the environmental impact of the industry.
Technology plays a crucial role in optimising oil and gas logistics operations. The integration of advanced technologies such as GPS tracking systems, real-time data analytics, and automated inventory management systems can significantly improve efficiency and accuracy in logistics processes.
For example, GPS tracking systems allow companies to monitor the location and movement of their tanker trucks and ships in real-time. This enables better route planning and optimization, leading to reduced transportation costs and improved delivery times. Real-time data analytics provide valuable insights into various aspects of logistics operations, such as inventory levels, demand forecasting, and driver performance. This data can be used to identify inefficiencies and bottlenecks in the supply chain, allowing for proactive decision-making and process improvements.
Automated inventory management systems help streamline the tracking and management of oil and gas products. These systems can automatically monitor inventory levels, generate purchase orders, and track product movement, reducing the risk of stockouts or overstocking. Overall, technology integration in oil and gas logistics can enhance visibility, efficiency, and safety throughout the supply chain.
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Prominent Drivers of the Oil and Gas Logistics Market
Growing Energy Demand:
The surge in global energy needs, especially in fast-developing regions like Asia-Pacific, Latin America, and parts of Africa, is a primary driver for the oil and gas logistics market. With population growth and urbanization, these regions are seeing increased industrial and domestic demand for energy, largely met by oil and gas resources. This demand not only boosts production but also places pressure on the logistics infrastructure to ensure the efficient movement of oil and gas from exploration sites to refineries and ultimately to end-users. Furthermore, as nations strive to meet their energy needs while maintaining supply stability, companies are expanding their logistics capabilities to ensure reliable distribution. Efficient logistics are essential to prevent delays and minimize operational costs, helping meet the urgent energy requirements of these growing economies. Thus, oil and gas logistics play a crucial role in maintaining global energy security and in supporting the continuous flow of resources to satisfy increasing consumption.
Expansion of Offshore and Unconventional Exploration:
As easily accessible oil and gas reserves become depleted, companies are exploring harder-to-reach sources, such as offshore deepwater reserves and unconventional resources like shale gas and oil sands. These remote and challenging sites require advanced logistics to transport specialized equipment, drilling materials, and skilled personnel. For instance, offshore drilling requires a complex supply chain to manage the flow of heavy machinery, fuel, and materials from onshore bases to rigs located far from the coastline. Similarly, unconventional sites like shale fields often need high volumes of water, sand, and chemicals, creating demand for reliable transport solutions. This expansion into challenging environments not only fuels demand for logistics expertise but also calls for safety-conscious and environmentally compliant operations. Therefore, the growth of exploration in these remote areas is a significant driver, pushing logistics providers to adapt to the unique demands of supporting offshore and unconventional projects.
Technological Advancements:
Technology plays a transformative role in the oil and gas logistics market, significantly enhancing efficiency, safety, and cost-effectiveness. Innovations such as real-time tracking, automated systems, and data analytics allow for better monitoring of logistics processes, from supply chain management to last-mile delivery. For example, GPS tracking systems provide real-time data on fleet location, enabling more efficient route planning and reducing transportation costs. Automation technologies in warehouses and storage facilities speed up loading and unloading, while data analytics help optimize inventory and reduce waste. Furthermore, advances in remote monitoring and predictive maintenance minimize downtime by identifying potential equipment issues before they escalate. These technologies also contribute to enhanced safety by enabling companies to detect risks earlier and implement quick responses. As the oil and gas sector embraces digital transformation, the logistics market benefits from streamlined operations, lower costs, and improved reliability, making technology a crucial driver of market growth.
Environmental Regulations and Sustainability Goals:
The global shift toward sustainability and stricter environmental regulations is shaping the oil and gas logistics market, pushing companies to reduce their carbon footprint and adopt eco-friendly practices. Many governments and international organizations are enforcing emission limits and sustainability standards that directly impact logistics operations. To comply, companies are adopting greener transportation modes, optimizing routes to cut fuel usage, and investing in alternative energy sources. For instance, the use of liquefied natural gas (LNG) as a fuel for trucks and ships is on the rise in an effort to reduce greenhouse gas emissions. Additionally, efficient waste management practices are increasingly prioritized to address environmental concerns. This focus on sustainability not only aligns with regulatory requirements but also enhances corporate reputation, as consumers and investors are placing greater emphasis on environmental responsibility. As a result, the need to meet these regulatory and sustainability demands drives innovations and investments in green logistics solutions in the oil and gas sector.
How can logistics providers in the oil and gas industry leverage digitalization and automation to improve supply chain efficiency?
An opportunity in the Oil and Gas Logistics Market lies in the growing demand for digitalization and automation to enhance supply chain efficiency and safety. As the industry faces increasing pressure to optimize operations and reduce costs, logistics providers that invest in cutting-edge technology like IoT, AI-driven analytics, and automated tracking systems can offer significant value to oil and gas companies.
For example, by adopting real-time tracking and predictive analytics, logistics providers can proactively manage fleet movements, improve scheduling, and minimize downtime due to equipment failures or supply chain delays. Automation within warehouses and ports also offers potential to streamline loading and unloading processes, reducing manual labor and increasing speed and accuracy.
Digitalization enables better data management and reporting, which is particularly valuable as companies face stricter compliance and environmental reporting requirements. Enhanced transparency and operational insights appeal to companies aiming to reduce emissions, manage safety more effectively, and achieve sustainability goals. This demand for digital transformation creates a strong growth opportunity for logistics firms willing to innovate, setting them apart from competitors and positioning them as leaders in the evolving oil and gas supply chain landscape.
What are the key challenges faced by the oil and gas logistics industry in managing long-distance transportation, and fluctuating market conditions?
Oil and gas logistics face several challenges in their operations. One of the main challenges is the transportation of large quantities of oil and gas over long distances. This requires specialised equipment such as tanker trucks and ships, which can be expensive to maintain and operate. Another challenge is the volatility of the oil and gas market. Prices can fluctuate significantly, making it difficult to plan and budget for transportation costs. Additionally, geopolitical factors and regulatory changes can impact the logistics operations of oil and gas companies.
Safety is a major concern in oil and gas logistics. The transportation of hazardous materials requires strict adherence to safety protocols and regulations to prevent accidents and minimise the risk of spills or leaks. The logistics of oil and gas operations are often complex due to the involvement of multiple stakeholders, including suppliers, distributors, and customers. Coordinating the movement of resources and ensuring timely delivery can be a logistical challenge.
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Key Manufacturers
Market key players and organizations within a specific industry or market that significantly influence its dynamics. Identifying these key players is essential for understanding competitive positioning, market trends, and strategic opportunities.
- Agility Logistics (Kuwait)
- Bolloré Logistics (France)
- C.H. Robinson (United States)
- CEVA Logistics (Switzerland)
- DB Schenker (Germany)
- DHL Global Forwarding (Germany)
- Expeditors International of Washington (United States)
- J.B. Hunt Transport Services (United States)
- Kuehne + Nagel (Switzerland)
- Mitsubishi Logistics Corporation (Japan)
- Panalpina World Transport (Switzerland)
- Penske Logistics (United States)
- Ryder System, Inc. (United States)
- Schneider Electric (France)
- XPO Logistics (United States), and Others Key Player
Recent Development
In October 2024, Agility, a global leader in supply chain services, infrastructure and innovation, announced plans for the final phase of expansion at the Agility Logistics Parks (ALP) warehousing complex in Riyadh. The expansion project represents an investment of 250 million SAR and will add 100,000 SQM of Class A warehousing to the complex, taking the total available 551,368 SQM. The first phase of the expansion will be ready and operating in Q1 2025. It is expected to create 300 new jobs for Saudis.
In February 2023, The Bolloré Group and the CMA CGM Group announce the completion of the sale of 100 % of Bolloré Logistics to CMA CGM, it being specified that the transfer of Bolloré Logistics Sweden AB to theCMA CGM Group remains subject to the latter obtaining foreign investment clearance in Sweden. The purchase price is 4.850 billion euros, on the basis of the estimated debt and cash on the completion date.
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Key Segments of Market Report
By Type:
The pipeline segment dominates the Oil and Gas Logistics Market primarily due to its efficiency, cost-effectiveness, and capacity for high-volume, long-distance transport. Transportation modes such as trucks, ships, and railways, pipelines offer continuous, uninterrupted flow, making them particularly suited for transporting large volumes of crude oil, natural gas, and refined petroleum products across extensive distances. This method ensures a steady supply chain that is less vulnerable to disruptions, which is critical in maintaining consistent production and delivery timelines in the oil and gas industry.
One of the main advantages of pipelines is their cost efficiency, especially over long distances. Although initial capital investment for pipeline infrastructure is significant, operating costs are lower compared to alternative logistics methods. Once installed, pipelines incur minimal labor and energy expenses, offering a much lower per-unit cost of transportation over time. This is crucial in the oil and gas sector, where large volumes must be moved consistently to meet high demand, especially in regions that are highly dependent on fossil fuels for energy production and industrial applications.
For instance, long-haul oil and gas pipelines are also more economical and environmentally friendly than other modes of transport like rail or trucking (pipelines create 61 to 77% less greenhouse gas emissions than rail when moving crude over long distances), they also have a safe delivery rate of greater than 99.999%.
Pipelines are also considered safer and more environmentally friendly for transporting oil and gas than road and rail. They reduce the risks associated with tanker accidents and spills, minimizing the potential for environmental damage. Additionally, pipelines have lower greenhouse gas emissions compared to trucking or rail transport because they rely on pumps, which consume less fuel than fleets of diesel-powered vehicles. As environmental regulations become stricter and companies are pressured to reduce their carbon footprint, the pipeline option becomes even more attractive, contributing to its market dominance.
By Application:
The onshore section of the oil and gas logistics sector is poised to continue being a market leader because of several significant reasons. Onshore logistics solutions are essential in vast onshore areas for the transportation, storage, and distribution of crude oil, industrial products, and natural gas. A dedicated pipeline transportation system, along with terminals and storage facilities, has been established for this sector, resulting in reduced transportation expenses.
It is simpler to remove the bureaucratic obstacles in onshore logistics than to navigate the complexities of offshore logistics, which contributes to the swift delivery of products to the market. Due to the continuous rise in global energy consumption and the emergence of new areas for development, particularly in unconventional oil and gas sectors, the onshore segment continues to be crucial in meeting supply chain requirements as they arise. Furthermore, advancements in technology and logistics management systems are enhancing the efficiency of onshore facilities and boosting their carrying capacity, which creates difficulties for other segments to catch up. This positions this segment as the leader in the oil and gas logistics market.
By Region
The Asia-Pacific (APAC) region is experiencing rapid growth in the oil and gas transportation market due to a combination of high energy demand, economic expansion, infrastructural investments, and increasing import reliance. APAC includes some of the world’s fastest-growing economies, such as China, India, and Southeast Asian countries, which are experiencing rising energy demands driven by urbanization, industrialization, and population growth. This growth increases the need for a stable supply of oil and gas to power industries, transportation, and residential energy needs. As the demand for energy grows, the transportation infrastructure supporting the oil and gas supply chain also expands.
Rapid industrialization across APAC is intensifying the region’s need for petroleum products for manufacturing, transportation, and electricity generation. Countries like China and India are expanding their manufacturing sectors and developing new industrial zones, which require large quantities of oil and gas. This industrial expansion drives investments in transportation and logistics infrastructure to support the reliable and efficient movement of oil and gas products.
Many APAC nations have limited domestic oil and gas resources and therefore rely heavily on imports from oil-producing regions like the Middle East, Africa, and North America. This dependence requires an extensive and efficient logistics network, including pipelines, rail, shipping, and storage facilities, to transport these imports from ports to inland distribution centers and industrial areas. Increased import volumes are pushing APAC countries to improve and expand their oil and gas transportation networks.
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Comprehensive Offerings:
- Historical Market Size and Competitive Analysis (2017–2023): Detailed assessment of market size and competitive landscape over the past years.
- Historical Pricing Trends and Regional Price Curve (2017–2023): Analysis of historical pricing data and price trends across different regions.
- Market Size, Share, and Forecast by Segment (2024–2032): Projections and detailed insights into market size, share, and future growth by segment.
- Market Dynamics: In-depth analysis of growth drivers, restraints, opportunities, and key trends, with a focus on regional variations.
- Market Trend Analysis: Evaluation of emerging trends that are shaping the market landscape.
- Import and Export Analysis: Examination of trade patterns and their impact on market dynamics.
- Market Segmentation: Comprehensive analysis of market segments and sub-segments, with a regional breakdown.
- Competitive Landscape: Strategic profiles of key players across regions, including competitive benchmarking.
- PESTLE Analysis: Evaluation of the market through Political, Economic, Social, Technological, Legal, and Environmental factors.
- PORTER’s Five Forces Analysis: Assessment of competitive forces influencing the market.
- Industry Value Chain Analysis: Examination of the value chain to identify key stages and contributors.
- Legal and Regulatory Environment by Region: Analysis of the legal landscape and its implications for business operations.
- Strategic Opportunities and SWOT Analysis: Identification of lucrative business opportunities, coupled with a SWOT analysis.
- Conclusion and Strategic Recommendations: Final insights and actionable recommendations for stakeholders.
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