Oil Storage Market : Technological Advancements to Play Important Role in Market Growth

Global Oil Storage Market: Snapshot

Key oil product storage types include those meant for crude oil, gasoline, aviation fuel, as well as middle distillates such as diesel, fuel oil, marine bunker fuels, naphtha, kerosene, gas oil, and petrol. Oil storage provides a greater level of constancy in costs of these products through the removal of fluctuations in the short term supply market for crude and all its derivatives. The Middle East is expected to continue being a primary target region for manufacturers of oil product storage units, due to the continued lead taken by the region in the production of crude.

Leakage of oil products is one of the leading causes of product wastage and traders and manufacturers are aware of the investments that are required into developing superior alternatives in storage that can help avoid these losses. This also includes diverting manual labor and manufacturing capabilities towards expanding the manufacture of these storage units. Carbon steel and stainless steel are the two key materials currently being used to manufacture oil storage units. Carbon steel has been a staple in the market primarily due to its lower cost, but provides several disadvantages that stainless steel can mitigate. It is very likely for more players to shift towards stainless steel storage units over the coming years.

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Global Oil Storage Market: Overview

Oil storage products are mainly comprised of gasoline, crude oil, aviation fuel, and middle distillates such as fuel oil, diesel, naphtha, marine bunker fuels, kerosene, petrol, and gas oil. Oil storage brings about stability in pricing by eliminating short term supply fluctuations of crude and its derivatives. On account of different stringent norms to thwart leakage, vendors of storage equipment have invested heavily in manpower and in building steel tanks. There are two types of material used in this process, namely, carbon steel and stainless steel. Although carbon steel is low priced, stainless steel will likely see significant demand in locations of high air salinity and open storage facilities. Further, the chromium content enhances resilience against strong chemicals, resulting in its higher demand in the global market.

Global Oil Storage Market: Key Trends

With the global glut in oil on account of the Middle East countries showing little signs of reducing production and the U.S. production of shale in massive quantities, supply has outpaced demand. This has necessitated the effective storage thereby resulting in a major growth in the global market for oil storage. Suppliers worldwide have augmented their inventories and infrastructure to store massive quantities of crude oil. Another factor fuelling an uptick in demand is the governments’ endeavors to increase oil reserves to avert an economic crisis.

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A noticeable trend in the market is the stockpiling initiatives undertaken by nations such as the U.S., China, and India to cushion the price volatility and achieve consistent supply to the end-use sector.

Global Oil Storage Market: Market Potential

With the global oil supply not showing much signs of letting up, the future for the global oil storage market looks promising. These tanks are used mainly for gasoline, aviation fuel, crude oil, and middle distillates. Storage demand for crude oil is predicted to cross 1 billion cubic meters by 2025. However, capacity expansions and high demand for diesels and fuels for power and transportation sectors are expected to up demand for gasoline, aviation fuel, and other petrochemical derivatives in the next couple of years.

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A major concern, however, is the increasing inventory due to lessened consumption. This results in economic losses to suppliers. Besides, strict rules pertaining to stockpiling of oil in above and below-ground tank installations is another factor hobbling the market. Control of Pollution (England) Regulations 2001 and the Water Environment (Scotland) Regulations 2006 are some of the primary legislations that industry participants in Western Europe need to comply with.

Global Oil Storage Market: Regional Outlook

From a geographical perspective, the Middle East spearheads the global oil storage market on account of the increasing oil production and rising refinery throughput. Robust requirement for distillates, petroleum, and fuel in different industrial and commercial segments has significantly upped tank demand in the region. Nations such as Kuwait, Saudi Arabia, and the UAE are at the forefront of driving growth in the region. Crude oil storage demand in Saudi Arabia is anticipated to reach 67.4 million cubic meters by 2025.

North America too contributes significantly to oil stockpiling demand. Asia Pacific oil storage market is also predicted to see a turnaround in petrochemical demand in the years ahead.

Global Oil Storage Market: Competitive Analysis

Some of the prominent players in the global oil storage market are Marquard & Bahls AG,  ZCL Composites, Zepnotek Storage TanksLF Manufacturing, Columbian Steel Tank, Belco, and Palmer. Among them, Marquard & Bahls provides a wide array of tank designs to store crude oil, biodiesel, bioethanol, vegetable fats, and middle distillates.

Global Oil Storage Market Driven by Increased Investment on Exploration Activities

San Francisco, California, December 07, 2017: A recent business and commerce study by TMR Research has reported that the demand in the global oil storage market will continue to multiply at a notable CAGR during the forecast period of 2017 to 2025, gaining strong traction from continued fluctuations in crude prices, which is enticing major fuel consumers such as the aviation industry to invest and store oil and ensure energy security. The analysts of the report highlight that crude oil prices have fallen from three figure mark in 2012 to just over 50 in the recent years, which is primarily a reflection of doubled domestic production in the U.S. in past couple of years and this decreased fuel prices is promoting various industries to reserve for the future.

In addition to that, there as numerous exploration activities currently underway across the world, and technology has improved radically to detect every fruitful oil resource and extract it efficiently. This scenario once again makes for the need for proper storage facilities. Increasing demand for other petroleum products such as lubricants and gasoline, changing consumer preference for alternative fuels that are ecofriendly and emergence of liquefied natural gas (LNG) that can power marine containers are some of the other factors aiding to the prosperity of the global oil storage market. On the other hand, strict government regulations regarding the usage of fossil fuels, restrictions pertaining to exploration and production activities, and gradual shift of the automotive industry towards the electric options are a few factors obstructing the prosperity of the global oil storage market. Nevertheless, the vendors of the global oil storage market are expected to gain new opportunities from solidified natural gas technology for natural gas storage, growing usage of satellite imagery to quantify storage tanks, and emergence of alternate fuels for greener shipping.

Based on the type of storage, the global oil storage market can be segmented into fixed roof tanks, open top tanks, floating roof tanks, and other storage facilities, whereas product-wise, the market can be bifurcated into crude oil, aviation fuel, gasoline, and middle distillates. On the basis of reserve type, the market for oil storage can be categorized into strategic petroleum reserve and commercial petroleum reserve. Currently, the segment of strategic petroleum reserves constitutes for the maximum share of demand, owing to steadily increasing investment for these reserves from governments across various countries. On the other hand, the segment of commercial petroleum reserves is also projected to have a fruitful future for its vendors as the capacity expansion helps in planning of future oil usage.

Geographically, the region of the Middle East and Africa continues to be most prominent and is expected to retain its dominant position, with strong traction coming from countries such as Iran, Saudi Arabia, UAE, Qatar, Oman, and Nigeria, wherein oil production is surging and hence the prices of oil is decreasing. At the second position is North America, driven by the developed countries of the U.S. and Canada. In the U.S., the production of oil has seen tremendous growth in the past decade owing to high investments for exploration and extraction activities. Asia Pacific is another lucrative region, driven by countries such as China, Japan, Singapore, and South Korea.

As far as the competitive landscape is concerned, the global oil storage market is pretty much consolidated among a handful of players such as Buckeye Partners L.P., NuStar Energy L.P., Oiltanking GmbH, Royal Vopak N.V., and Kinder Morgan Inc. The threat of new players is moderate to low in this market as the market leaders will continue to strengthen their position via collaborations and joint ventures.

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