Market Trends of Drag Reducing Agents Industry
This section covers the major market trends shaping the Drag Reducing Agents Market according to our research experts:
Crude Oil has a Substantial Market Share
- Most crude oil pipelines have turbulent flow. This means that turbulent eddies in the oil, rather than friction against pipeline walls, produce most of the drag or energy loss when pumping. Drag reduction agents are chemicals that are injected into a crude oil pipeline to reduce energy loss; this results in a lower pressure drop than would occur if the same flow rate of untreated solvent was used.
- According to the U.S. Energy Information Administration, in 2021, United States crude oil production was 11,254,000 barrels per day, compared to 11,318,000 barrels per day in 2020. The United States imported 6,114,000 barrels of crude oil per day.Because the use of drag-reducing agents is heavily reliant on crude oil output and imports, its consumption in the United States is expected to rise in 2021.
- According to the U.S. Energy Information Administration, Saudi Arabia's crude oil production in September 2022 was 11,041 thousand barrels per day. Saudi Arabia's crude oil production climbed by 1.11% year on year, from 9,780 thousand barrels per day in October 2021 to 11,041 thousand barrels per day in September 2022. Increasing production of crude oil is expected to positively impact the demand for pipelines, thereby increasing the demand for drag-reducing agents in the crude oil industry.
- All the above-mentioned factors are likely to support the demand for the studied market in the coming years.
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North America Region to Dominate the Market
- North America dominates the drag-reducing agents market in terms of market share and market revenue. The region is set to continue to flourish in its dominance over the forecast period.
- Due to the significant availability of oil and gas reserves, as well as increasing urbanization, infrastructure development, and discoveries in the oil and gas industry, North America is likely to maintain its leadership position in the next few years.
- By 2022, Financial Market Infrastructure (FMI) predicts that the United States will hold a majority share of the North American drag-reducing agent market, with more than 48.9% of the value share.
- Rapid industrialization is prompting the country to grow its oil and gas production due to rising demand for power sources such as natural gas, diesel, gasoline, and others. According to the Energy Information Administration, U.S. government efforts raised crude oil and natural gas output by 12.7% and 9.8%, respectively, in 2021.
- Currently, more than ten significant petrochemical projects worth more than USD 207 billion are under construction in the United States. Thunder Horse South Expansion Phase 2 will enhance the market significantly further since it is one of the major oil fields in the Gulf of Mexico. This project will add two additional subsea production wells soon, and about eight wells will be drilled as part of the total development. Other projects include Mad Dog Phase 2, Herschel, and Manuel, among others.
- According to Baker Hughes, the number of operational oil and gas rigs in the United States exceeded 610 in the final week of January 2022. Furthermore, according to the Energy Information Administration (EIA), United States crude oil output dipped below 11.6 million barrels per day in December 2021, a 0.2 million barrels per day decrease from November 2021. The EIA also estimated that output will increase to an annual average of 12.0 million barrels per day in 2022 and 13.0 million barrels per day in 2023.
- Because of this, all of the above factors are expected to make the market for drag-reducing agents in North America grow in the coming years.
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