Petroleum liquid feedstock play an important role as raw materials in petrochemical industry, as it provides raw materials like naphtha, gas-oil for producing olefins, aromatics and other petrochemicals. Different grades of petroleum liquid feedstock like naphtha, gas-oil are fractionated from crude oil through atmospheric and vacuum distillation.
These liquid feedstocks are highly complex mixtures of hydrocarbons ranging from 4-12 carbon atoms that act as building blocks for various type of chemicals through cracking and reforming process. In the chemical sector, petroleum liquid feedstocks find widespread application in producing ethylene, propylene, BTX (benzene, toluene and xylene), solvents and other basic chemicals.Growing demand for chemicals and petrochemicals from industries like construction, automotive and packaging is fueling the consumption of petroleum liquid feedstock.
The Global petroleum liquid feedstock market is estimated to be valued at USD 327.09 Billion in 2024 and is expected to exhibit a CAGR of 4.5% over the forecast period 2024 to 2031.
Key Takeaways
- Key players operating in the petroleum liquid feedstock market are ExxonMobil, Shell, Reliance Industries, Saudi Aramco.
- There is huge demand for petrochemicals and chemicals from growing end-use industries like construction, automotive and packaging which in turn is driving the Petroleum Liquid Feedstock Market Demand.
- Major players are focusing on expanding their production facilities and capacities to cater to the growing demand for petroleum liquid feedstock. For instance, in 2022 Saudi Aramco announced plans to expand its crude oil production capacity to 13 million barrels per day by 2027.
- New technologies for upgrading heavy crude oils into valuable light feeds for chemical industry is helping improve the supply security and flexibility of petroleum liquid feedstocks.
Market Trends
- There is a rising preference for shale gas based feedstock over conventional naphtha and gas-oil based feedstock due to availability of shale gas reserves. However, issues related to infrastructure remains a challenge.
- Players are focusing on production of bio-based feedstock through fermentation of agriculture residue to reduce dependence on fossil fuel based feedstock and lower carbon footprint of chemicals. However, high production cost remains a challenge for commercialization.
Market Opportunities
- Growth in demand for petrochemicals from emerging economies of Asia Pacific and Middle East is expected to present lucrative growth opportunities for petroleum liquid feedstock market during the forecast period.
- Recycling of plastic waste for production of chemical feedstock present new opportunity to address the challenge of plastic waste management and secure feedstock supply. However, high capital investment remains a challenge.
Impact of COVID-19 on Petroleum Liquid Feedstock Market Growth
The COVID-19 pandemic significantly impacted the petroleum liquid feedstock market. During the initial lockdown phases in 2020, the demand for petroleum liquids plummeted as manufacturing activity declined and transport usage reduced drastically. This led to a massive glut in supply while demand dried up. Prices crashed to historic lows during this phase. Many operators faced losses and even shut down production facilities temporarily.
However, as lockdowns eased in late 2020 and economies began recovering in 2021, demand started increasing steadily albeit at a gradual pace. Manufacturing and industrial activity pick up supported higher demand from refineries and petrochemical plants. Mobility also improved contributing to fuel consumption growth. This helped absorb some of the excess inventories piled up during the peak pandemic phase. Operators calibrated production volumes according to the recovering demand environment.
While the worst seems to be over, the market is yet to attain pre-pandemic levels. Volatility remains as pandemic risks persist with new variants emerging. Operators will need to focus on stabilizing operations, maintaining competitiveness through optimized costs and versatile supply chain strategies. Sustained demand resurgence, especially from transportation and industrial manufacturing segments will be key for full market recovery.
North America Petroleum Liquid Feedstock Market
In terms of value, the North America region accounted for the largest share of the global petroleum liquid feedstock market during the historical period. This was mainly due to high consumption from the well-established petroleum refining and petrochemical industries in the United States and Canada. Access to extensive domestic oil & gas reserves and connectivity to pipeline infrastructure were other advantages.
However, the COVID-19 outbreak impacted North America significantly during 2020. Lockdowns led to steep falls in fuel and petrochemical demand. This flooded the market with excessive supplies and tank storage capacities were maxed out rapidly. Many operators had to curtail production drastically or even shut down temporarily. While recovery is underway led by economic reopening, uncertainties persist. Sustained demand resurgence is important for full recovery of the regional market.
Southeast Asia Petroleum Liquid Feedstock Market
Among other regions, Southeast Asia emerged as the fastest growing market for petroleum liquid feedstock during the historical period prior to the pandemic. This was due to increasing refining capacities as countries like Indonesia and expansion of petrochemical sectors across Vietnam, Malaysia and Thailand. Rapid economic and industrial growth supported consumption increases.
However, the COVID-19 outbreak impacted the region too with declines witnessed during 2020. Logistical challenges also emerged for supply chains dependent on international trade. However, recovery has been swift in Southeast Asia as lockdowns ended quicker. Vaccination drives helped boost economic confidence. Younger population and bigger manufacturing sectors are supporting demand revival. If pandemic risks remain controlled, Southeast Asia is well-positioned to continue its position as the fastest growing regional market in the future as well.
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About Author-
Alice Mutum is a seasoned senior content editor at Coherent Market Insights, leveraging extensive expertise gained from her previous role as a content writer. With seven years in content development, Alice masterfully employs SEO best practices and cutting-edge digital marketing strategies to craft high-ranking, impactful content. As an editor, she meticulously ensures flawless grammar and punctuation, precise data accuracy, and perfect alignment with audience needs in every research report. Alice's dedication to excellence and her strategic approach to content make her an invaluable asset in the world of market insights.
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