Conventional Oil Market: Global Industry Analysis and Forecast (2023-2029)

The Conventional Oil Market size was valued at USD 2687.32 Billion in 2022 and the total Conventional Oil revenue is expected to grow at a CAGR of 3.8% from 2023 to 2029, reaching nearly USD 3493.71 Billion.

The conventional oil industry has played a significant role in the global economy for many decades, providing a major source of energy for transportation, industry, and residential and commercial use. The industry has also been a significant source of employment and economic growth, particularly in regions with large oil reserves. However, the conventional oil market has faced a number of challenges in recent years. These include declining oil reserves, increasing costs of oil exploration and extraction, and growing concerns about the environmental impact of oil extraction and use, including greenhouse gas emissions and air and water pollution, resulting in steady market growth.

Conventional oil is a type of oil extracted from underground reservoirs using traditional methods. It is a finite resource subject to depletion over time, and the increasing demand has made it more difficult and expensive to extract. Conventional oil remains a major source of global energy, used in transportation, power generation, and industrial processes.

The depletion of conventional oil reserves has led to concerns about sustainability and the need for transitioning towards cleaner, more sustainable sources of energy. The environmental impact of conventional oil extraction and use, including greenhouse gas emissions, air and water pollution, and habitat destruction, has also raised concerns. Therefore, there is a need to focus on diversifying the global energy mix and reducing dependence on conventional oil while developing alternative energy sources.To know about the Research Methodology :- Request Free Sample Report
Conventional Oil Market Dynamics:
Growing transportation industry across the world

The transportation industry is a crucial component of modern society. The increasing demand for goods and services, as well as the growing need for mobility, is driving the growth of the transportation industry across all modes of transportation, including road, rail, air, and sea.

1. In 2019, the US transportation system moved 21.8 billion tons of goods valued at $20.6 trillion and trucks moved 11.5 billion tons of freight, accounting for 70.2% of all domestic freight tonnage.

In developing countries, in particular, the growth of the transportation industry is seen as a key driver of economic development, as it enables greater access to markets and expands opportunities for trade and commerce. This is leading to increased investment in transportation infrastructure, such as new highways, railways, and airports, to support the growing demand for transportation services.

The growth of the transportation industry is driving the demand for conventional oil products like gasoline and diesel, which are the primary fuels used in the transportation sector, thereby driving the global conventional oil market during the forecast period. Cars and trucks powered by internal combustion engines require gasoline and diesel to operate, and as the number of vehicles on the road increases, boosting the demand for conventional oil.

Increasing technological advancements in the conventional oil industry

Increasing technological advancements in the conventional oil market are expected to offer major growth potential throughout the forecast period. Advancements in technology, such as the development of more efficient extraction methods or the use of enhanced oil recovery techniques, make it easier and cheaper to extract conventional oil. This could lead to an increase in production and extend the lifespan of conventional oil reserves. For instance,

1. Advanced drilling techniques: Innovations in drilling technology have allowed for more precise and efficient drilling, reducing costs and increasing production. For example, directional drilling and horizontal drilling techniques allow for the drilling of multiple wells from a single site, reducing the need for additional drilling sites.

2. Digitalization: The use of digital technologies such as artificial intelligence (AI) and the Internet of Things (IoT) is being increasingly used in the conventional oil industry. These technologies are used to optimize production, detect and prevent equipment failures, and increase safety.

3. Enhanced oil recovery techniques: Advanced techniques such as hydraulic fracturing (fracking) and carbon capture and storage (CCS) are being used to extract more oil from conventional reservoirs. Fracking involves injecting water, sand, and chemicals into the reservoir to release trapped oil, while CCS captures carbon dioxide emissions from industrial processes and stores them underground.

4. Autonomous vehicles: Self-driving vehicles are being used in the conventional oil industry to improve safety and reduce costs. For example, autonomous vehicles can be used to transport personnel and equipment to remote sites, reducing the need for expensive helicopter flights.

As a result, the increasing technological advancements in the conventional oil industry are improving efficiency, reducing costs, and increasing production, while also reducing the environmental impact of oil production and creating lucrative growth opportunities for conventional oil manufacturers.

Growing adoption of renewable energy sources

The growing adoption of renewable energy sources such as wind, solar, and hydroelectric power is one of the major factors that is restraining the demand for conventional oil. Renewable energy sources are becoming increasingly popular due to several factors, including concerns over climate change, environmental sustainability, and the declining cost of renewable energy technologies.

Governments around the world are also providing incentives and subsidies to encourage the adoption of renewable energy sources. For example, many countries have implemented renewable energy targets, tax incentives, and feed-in tariffs to support the growth of renewable energy industries. For instance,

1. Germany has implemented feed-in tariffs that guarantee a fixed price for renewable energy producers for a set period of time, providing stability and certainty for renewable energy investments.

2. China has implemented a variety of policies, including feed-in tariffs, subsidies, and tax incentives, to support the growth of renewable energy industries.

3. The United States has implemented a variety of policies to support renewable energy adoption at the federal, state, and local levels. These policies include tax credits, grants, loan guarantees, and renewable portfolio standards, which require utilities to generate a certain percentage of their electricity from renewable sources.

As the adoption of renewable energy sources continues to increase, the demand for conventional oil is likely to decline and restrain the conventional oil market. This shift towards renewable energy sources is not only important for reducing greenhouse gas emissions and combating climate change but also for promoting energy security and reducing reliance on finite fossil fuel resources.
Conventional Oil Market Segment Analysis:
Based on End-user Industry, the automotive segment held the largest market share of 42.6% and dominated the conventional oil market in 2022. The segment is expected to further grow at a significant CAGR during the forecast period. The automotive industry is one of the largest end-users of conventional oil. Conventional oil products like gasoline and diesel are the primary fuels used in cars, trucks, and other vehicles powered by internal combustion engines (ICEs).

As the global population and economy continue to grow, the demand for transportation is also expected to increase, leading to higher demand for conventional oil products in the automotive industry, thereby supporting segment growth. However, the conventional oil market is facing increasing competition from alternative energy sources, particularly electric vehicles (EVs) powered by batteries or fuel cells, thus restraining the segment growth.In recent years, there has been a growing shift towards EVs in the automotive industry, driven by factors like government incentives, technological advancements, and increasing consumer demand for environmentally friendly transportation options. While EVs still represent a small portion of the overall automotive market, their market share is expected to increase over time, potentially leading to lower demand for conventional oil products during the forecast period.

Despite the growth of the EV market, conventional oil products are likely to remain a key fuel source for the automotive industry. Many consumers still prefer ICE-powered vehicles due to factors like range anxiety and the lack of charging infrastructure, and the production and use of conventional oil products are well-established and supported by a well-developed infrastructure, driving conventional oil market growth in the automotive industry.

The power generation segment is expected to grow at a CAGR of xx% and offer lucrative growth prospects for global conventional oil competitors. Conventional oil is used in power generation as a fuel for oil-fired power plants. The power generation industry has historically been a significant consumer of conventional oil, particularly in countries with limited access to other sources of energy. The chemical industry is expected to grow at a moderate CAGR during the forecast period.

The chemical industry is also one of the largest end-users of conventional oil, using it as a feedstock for the production of a wide range of chemical products. Conventional oil is processed to produce petrochemicals, which are then used to make plastics, synthetic fibers, rubber, and other chemical products. The demand for petrochemicals and other chemical products is driven by a wide range of industries, including packaging, construction, automotive, and consumer goods. As such, the demand for conventional oil in the chemical industry is closely linked to the overall state of the global economy and the demand for products in these industries.
Conventional Oil Market Regional Insights:
The United States dominated the conventional oil market with the highest market share OF 38.9% in 2022. The United States is the largest producer of conventional oil in North America, followed by Canada and Mexico. The region is characterized by the presence of large oil fields and high levels of investment in oil infrastructure. The conventional oil industry is also influenced by geopolitical factors, such as relations with OPEC countries and the shale oil revolution.

The United States is a significant player in the conventional oil market, with a long history of oil production dating back to the early 1900s. The country is the largest producer of conventional oil in North America and one of the top producers in the world. The majority of conventional oil production in the US comes from onshore fields, such as the Permian Basin in Texas and New Mexico, the Bakken Formation in North Dakota, and the Eagle Ford Formation in Texas.

In recent years, the US has experienced a significant increase in oil production due to the development of shale oil and gas resources. This has led to a shift in the global conventional oil market, with the US becoming less dependent on oil imports and even exporting oil to other countries. The shale revolution has also led to changes in the pricing of oil, with the emergence of shale oil production leading to a lower global oil price.

The US has a well-developed oil infrastructure, including pipelines, refineries, and storage facilities, which supports its significant production and consumption of conventional oil. The country is also home to major oil companies, such as ExxonMobil, Chevron, and ConocoPhillips, which have a significant presence in the conventional oil market. Despite the growth of shale oil production, the US continues to rely on imports of some types of conventional oil, particularly heavier crude oils. The country also faces environmental and regulatory challenges related to conventional oil production, particularly in areas with sensitive ecosystems or concerns about water contamination, resulting in restraining the market growth.The Middle East and Africa region is expected to be significant regions for major conventional oil market players. The Middle East region is home to some of the largest conventional oil reserves in the world, with Saudi Arabia, Iran, and Iraq being major producers. The market is highly sensitive to political instability in the region, and tensions with other oil-producing countries lead to supply disruptions.

The oil industry has played a crucial role in the economic development of many Middle Eastern countries, with oil revenues being a major source of income for governments and providing employment opportunities. However, the conventional oil market in the region is also subject to political and security risks, which can lead to supply disruptions and price volatility.

The Organization of the Petroleum Exporting Countries (OPEC), a cartel of 14 oil-producing countries, including several Middle Eastern countries, has a significant influence on the conventional oil market. OPEC members work together to control oil production levels and stabilize prices, making the organization an important player in the conventional oil market. Political disputes and conflicts in the Middle East can also have a significant impact on the oil market. For example,

1. The US sanctions on Iran have led to a decrease in Iranian oil exports, and conflicts in Iraq and Syria have disrupted oil production and transportation.

Despite the region's significant conventional oil reserves, some Middle Eastern countries are also exploring alternative sources of energy, such as solar and wind power. The development of alternative energy sources could have a significant impact on the future of the Middle East's conventional oil industry, as global demand for oil may decrease over time.
Conventional Oil Market Scope: Inquiry Before Buying



Conventional Oil Market


Report Coverage
Details


Base Year:
2022
Forecast Period:
2023-2029


Historical Data:
2017 to 2022
Market Size in 2022:
USD 2687.32 Billion


Forecast Period 2023 to 2029 CAGR:
3.8%
Market Size in 2029:
USD 3493.71Billion


 Segments Covered:
By Type
1. Light Distillate
2. Middle Distillates
3. Heavy Ends
4. Others


by Sulfur Content
1. Low Sulfur
2.High Sulfur


by End-Use Industry
1. Automotive
2. Chemical
3. Power Generation
4. Industrial
5. Others



Conventional Oil Market, by Region
North America (United States, Canada and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria, Turkey, Russia and Rest of Europe)
Asia Pacific (China, India, Japan, South Korea, Australia, ASEAN and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina, Columbia and Rest of South America)
Conventional Oil Market, Key Players are
1. BP
2. Chevron
3. Eni
4. ExxonMobil
5. Shell
6. Total
7. CNPC
8. Equinor
9. Petrobras
10. Repsol
11. Saudi Aramco
12. ConocoPhillips
13. Total
14. PetroChina
15. Gazprom

FAQs:

1. What are the growth drivers for the Conventional Oil market?
Ans. The increasing transportation industry is expected to be the major driver for the Conventional Oil market.

2. What is the major restraint for the Conventional Oil market growth?
Ans. Increasing adoption of renewable energy is expected to be the major restraining factor for the Conventional Oil market growth.

3. Which region is expected to lead the global Conventional Oil market during the forecast period?
Ans. North America is expected to lead the global Conventional Oil market during the forecast period.

4. What is the projected market size & growth rate of the Conventional Oil Market?
Ans. The Conventional Oil Market size was valued at USD 2687.32 Billion in 2022 and the total Conventional Oil revenue is expected to grow at a CAGR of 3.8% from 2023 to 2029, reaching nearly USD 3493.71 Billion.

5. What segments are covered in the Conventional Oil Market report?
Ans. The segments covered in the Conventional Oil market report are Type, Sulphur Content, End-user Industry, and Region.