In 2022 & 2023, market players expected to sail in rough waters; might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain. Further, U.S. economy is expected to grow merely by 3% in 2022. Purchasing power in the country is expected to fell nearly by 2.5%.
On the other hand, European countries to see the worst coming in the form of energy crisis especially in upcoming winters!! Right after COVID-19, inflation has started gripping the economies across the globe. Higher than anticipated inflation, especially in western world had raised concerns for national banks and financial institutions to control the economic loss and safeguard the interest of the businesses. Increased interest rates, strong USD inflated oil prices, looming prices for gas and energy resources due to Ukraine-Russia conflict, China economic slowdown (~4% in 2022) disrupting the production and global supply chain and other factors would impact each industry negatively.
Oilfield chemicals are specialty chemicals employed to enhance certain properties and functionalities of oil wells or reservoirs. Oilfield chemicals are the chemicals intended for specific functions in the production of crude oil. Several services performed on oilfields depends on specialty fluids and additives. Oilfield chemicals play a vital role in the life cycle of an oil well. They are used in upstream, midstream and downstream operations of the oil industry. Manufacture of oilfield chemicals needs many raw materials that are easily available. Production of oilfield chemicals requires moderate investments.
The global oilfield chemicals market is anticipated to record a CAGR of around 5% over the forecast period i.e. 2019-2027. The growth of such chemicals market is often attributed to the increased demand for oilfield chemicals within the production, well stimulation, drilling fluids, workover & completion, Enhanced Oil Recovery (EOR), and cementing applications across the globe. The consumption of oilfield chemicals can be directly related to the production of crude oil and drilling of new oil & gas wells across the globe. In U.S. total crude oil production is estimated to increase from 8.83 million barrels per day in 2017 to 12.36 in 2019.
The global oilfield market is segmented based on product and application. On the basis of product oilfield chemical market is segmented into biocides, corrosion & scale inhibitors, demulsifiers, surfactants, polymers, gellants & viscosifiers, and others. Out of which demulsifiers is expected to hold major share on account of its increasing application in crude oil and petrol refinery activities. Furthermore, demulsifiers are widely used to separate oil from water, thus increasing the export value of crude oil produced, which is expected to drive the oilfield chemical market.
Based on application oilfield chemical market is segmented into drilling fluids, cementing, enhanced oil recovery, production chemicals, well stimulation, and workover & completion. Out of which drilling fluids is anticipated to witness fast growth attributed to increasing deep and ultra-deep drilling activities.
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Increase in crude oil production has driven oilfield operations such as drilling, cementing, production, workover and completion, and well stimulation. Thus, the demand for drilling fluids, cementing fluids, production chemicals, workover and completion chemicals, and well stimulation chemicals is anticipated to increase with rise in crude oil production. Rise in the development of unconventional oilfields across the world is likely to drive the global market for oilfield chemicals.
Oilfield chemicals contaminate the surface water, groundwater, and soil if they are inappropriately disposed. They release potentially hazardous materials such as acids and solvents, affecting the human health as well as environment. A wide variety of chemicals are utilized in treating oil, gas, and the water collected from reservoirs. This is another major factor driving the growth of oilfield chemicals market.
Increasing deep drilling and ultra-deep drilling activities for oil and gas have been driving the market over the forecast period. This market is driven by several micro factors, such as increasing shale gas exploration and production. The opening of new horizons, attributed to deep-water drilling operations, is likely to act as key major opportunities for the oilfield chemicals market.
Increase in environmental concerns and crude oil price fluctuations are expected to hamper the market growth during the forecast period. Chemicals used in oilfields are harmful for environment thus various government regulations are hampering the oilfield chemical market. A wide variety of chemicals are utilized in treating oil, gas, and the water collected from reservoirs. This treated water contains several chemicals that can cause serious damage to flora and fauna on disposal. These environment-related concerns are likely to restrict the global oilfield chemicals market during the forecast period.
Our-in depth analysis of the global oilfield chemicals market includes the following segments:
On the basis of region, the market is segmented into five major regions i.e North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.
North America oilfield chemicals market is anticipated to witness fastest growth over the forecast period. The growth in this region is attributed to the increased emphasis on shale gas production and exploration in the region. The United States accounts for the major share in North America, mainly attributed to the boom in the shale gas industry, advancements in technologies, and increasing oil exports. This growing production of shale gas in North America, in turn, is projected to increase the demand for oilfield chemicals over the forecast period.
Asia Pacific market is estimated to witness significant growth on account of the increase in cementing, drilling, and stimulation activities. In addition, large investment in the energy sector by China and India, attributed to the rise in demand for petroleum & crude oil is expected to increase the demand for oilfield chemicals in this region.
Global oilfield chemicals market is further classified on the basis of region as follows: