rising global energy demand is driving the Oil and Gas Downstream Market
Technavio analyzes that the Oil and Gas Downstream Market is expected to grow at a CAGR of 2.93% during 2023 and 2028. During this period, the market is also expected to show a growth of USD 179.09 billion.There are various factors that contribute to the growth of the market. The global energy landscape is witnessing a significant surge in demand, with the oil and gas downstream sector playing a pivotal role in meeting this growing need. This sector encompasses activities such as refining, petrochemicals, and natural gas processing, which are essential for transforming raw hydrocarbons into finished products for various industries and end-users. As the world's population and economies continue to expand, the demand for energy and its derived products is expected to increase, creating ample opportunities for the oil and gas downstream market.
Refineries play a crucial role in the oil and gas downstream market by converting crude petroleum into a range of valuable products. These include diesel, gasoline, LPG, and other petrochemical feedstocks, lubricants, and specialty fuels. Two primary types of refineries exist: atmospheric distillation and complex, or integrated. Atmospheric distillation refineries utilize fractional distillation to separate crude oil into its primary components, forming the foundation of the downstream sector. Simultaneously, complex refineries enhance the yield of high-value products and minimize waste through secondary processes beyond basic distillation. Both types are indispensable in supplying essential fuels for transportation, heating, and industrial applications.
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Oil and Gas Downstream Market Segmentation
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The Oil and Gas Downstream Market is witnessing significant changes with the rise of fuel-efficient vehicles and electric vehicles, leading to shifting demand patterns. Digitalization and modernization are transforming refineries, reducing refining costs and process losses. Complex and integrated refineries employ secondary processes like catalytic cracking, hydrocracking, reforming, alkylation for petrochemical feedstocks, lubricants, and specialty fuels. Downstream oil from petroleum crude oil and raw natural gas faces challenges in the transportation sector due to fluctuating crack spreads and oil refiners' profitability. Energy consumption in refineries is being addressed through automation, sensors, and advanced technologies.
The Oil and Gas Downstream Market is a significant segment of the global energy sector, falling under the larger Oil and Gas Exploration and Production Market. This market encompasses businesses involved in refining, storage, transportation, marketing, and other related activities for petroleum crude oil and petroleum products, such as fuel-efficient vehicles and electric vehicles. Technavio, a leading market research firm, projects moderate growth for the global Oil and Gas Market, which includes the revenue generated by companies engaged in upstream (exploration and production), midstream (processing, refining, and transportation), and downstream (marketing and sales) activities. Key trends shaping the Downstream Market include digitalization and modernization to enhance efficiency and reduce refining costs, as well as the increasing demand for fuel-efficient and electric vehicles to minimize process losses and promote sustainability.. Industries are leveraging the products belonging to the market for customer engagement, transactional notifications, and promotional offers.
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