United States Oil and Gas Chemicals Market SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (undefined)

United States Oil and Gas Chemicals Market is Segmented By Location (Onshore and Offshore), By Application (Drilling, Production, Cementing, Workover & Completion). The report offers the value (in USD billion) for the above-mentioned segments.

United States Oil and Gas Chemicals Market Size

Market Size in USD

CAGR7.1%

Study Period2024 - 2031
Base Year of Estimation2023
CAGR7.1%
Market ConcentrationHigh
Major PlayersExxonMobil, Chevron Corporation, Shell PLC, TotalEnergies SE, Baker Hughes
*Disclaimer: Major players are listed in no particular order.
*Source: Coherent Market Insights
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United States Oil and Gas Chemicals Market Analysis

The United States Oil and Gas Chemicals Market size is expected to reach US$ 9.50 Bn by 2031, from US$ 5.50 Bn in 2023, exhibiting a CAGR of 7.1% during the forecast period. Chemical components that are majorly used in oil & gas extraction operations are called as oilfield chemicals. Oilfield chemicals find applications in cementing, enhanced oil recovery, drilling fluids, well stimulation, production chemicals, and work over & completion.

United States Oil and Gas Chemicals Market Drivers

  • Increasing demand from end-use industries: The demand from various end-use industries has been steadily increasing over the past few years, driving significant growth in the United States oil and gas chemicals market. Many industries such as construction, automotive, healthcare, agriculture etc. rely heavily on oil and gas chemicals for their operations and manufacturing processes. The construction industry in particular has seen tremendous growth in the U.S. recently on the back of rising infrastructure investments and increasing housing construction activities. The increasing construction activities require large quantities of polymeric materials, resins, solvents and other intermediates that are derived from oil and gas chemicals. Similarly, the growing automotive industry has also boosted the demand for polymers, elastomers, synthetic lubricants and other petrochemical products. As per the U.S. Department of Transportation, there were over 276 million registered vehicles in the U.S. as of 2020.
  • Growth in the consumption of petrochemical products: The rising consumption of petrochemical products across various industries has been a key driver propelling the growth of the United States oil and gas chemicals market in recent years. Petrochemicals derived from oil and gas are used extensively in the manufacturing of plastics, synthetic rubbers, solvents, adhesives, and other materials that see growing demand from the construction, automotive, pharmaceutical, and consumer goods sectors. Consumer goods companies rely heavily on petrochemical-based plastics for packaging various food and personal care products. Similarly, construction activities involve the usage of resins, polymers, and fibres made from petrochemicals on a large scale. This rising culture of disposable consumerism and material-intensive construction activities bode well for the sustained growth of the United States Oil and Gas Chemicals Market over the long run. As domestic consumption of final goods incorporating petrochemical components grows steadily, so will the upstream demand for oil and gas derivatives in the chemical production process. For instance, according to a report by the U.S. Energy Information Administration Report in 2021, U.S. dry natural gas production in 2020 was about 33.5 trillion cubic feet (Tcf), which was about 10% greater than the U.S. total natural gas consumption.

United States Oil and Gas Chemicals Market Restraints

  • Volatility in crude oil prices: Volatility in crude oil prices has significantly restrained the growth of the United States oil and gas chemicals market in recent years. When crude oil prices fluctuate substantially, it impacts the profitability and planning ability of oil and gas chemical companies. Unstable crude prices make it difficult for these companies to determine long term investment strategies and chart growth plans with certainty. They are often forced to cut down or delay capital expenditures aimed at expanding production capacities. This has short and long term implications for the market. A clear example was seen during the initial months of the COVID-19 pandemic in 2020 when crude oil demand and prices crashed globally. U.S. crude oil production fell by almost 3 million barrels per day between March and June as producers curtailed output. According to the U.S. Energy Information Administration, total U.S. petroleum and other liquids production averaged 11.3 million barrels per day in 2020, down from a record high of 12.2 million barrels per day in 2019.
  • Stringent environmental regulations: Stringent environmental regulations are posing significant challenges for growth in the United States oil and gas chemicals market. The increased focus on climate change and pollution is driving stronger policies to curb greenhouse gas emissions from fossil fuel extraction and processing. Various states have introduced laws and directives to transition to cleaner sources of energy and impose carbon taxes. For instance, California has some of the strictest climate change laws in the nation, including targets to reduce greenhouse gas emissions by 40% below 1990 levels by 2030 (California – First State to Enact Climate Reporting Legislation). As a result, many oil and gas projects face delays or cancellations due to lengthy approval processes and higher compliance costs associated with meeting new environmental standards. The fluctuating prices and demand due to such transitions make it challenging for the industry players to strategize and achieve planned growth targets. Overall, stringent environmental policies restraining carbon emissions are castigating a shadow on the expansion plans of the United States oil and gas chemicals market.

United States Oil and Gas Chemicals Market Opportunity

  • Production of high value-added products: The United States oil and gas industry has an opportunity to shift its focus towards producing more high value-added chemical products. As the global demand rises for specialty chemicals that are used in various applications like pharmaceuticals, automotive, construction and electronics sectors, domestic production of these downstream petrochemical products can help capture more value from oil and gas feedstock. As per the data from U.S. Energy Information Administration, production of ethylene, propylene and benzene - which are key components for producing derivatives like plastics, resins, fibers, elastomers and other high-value chemical products has been steadily increasing in the U.S. over the past 5 years. With several world-scale petrochemical plants and complexes under construction phase currently, this production is projected to rise significantly by 2025. It can subsequently drive value-added manufacturing and jobs across various downstream sectors in the industrial Midwest and Gulf Coast regions.
  • Increase in export opportunities: The United States has seen strong growth in its oil and gas chemicals production over the past decade, driven by advancements in extraction technologies that have allowed greater access to shale reserves. As domestic demand reaches saturation levels in many product categories, exports present a major avenue for continued volume growth and revenue generation. Many American oil and gas chemicals are highly competitive on the global stage due to low production costs and there is immense potential to ramp up overseas shipments. Capturing a larger share of import demand in rapidly industrializing markets like Asia and Latin America could help drive considerable sales volumes and profitability for American producers. For instance, data from the U.S. Energy Information Administration showed that exports of distillate fuel oil rose 43% between January and October 2021 compared to the same period in 2020. With global energy demand projected to continually rise driven by expanding middle classes and manufacturing sectors, overseas demand for American energy products and their byproducts such as petrochemicals, polymers and fibers is poised to scale new highs. This creates a large export-oriented growth avenue for the domestic oil and gas chemicals industry over the coming years.