With oil prices declining, companies are stocking up on supply for the future in case prices surge again, and this warrants the need for oil storage facilities. Additionally, the global supply of crude oil has surpassed its demand and this has created a heightened need for oil storage facilities. Thus, there has been a rise in the number of oil inventories since the past few years owing to which the global oil storage market is growing. Oil refineries, especially in Asia Pacific and Europe are striving to expand their storage capacity. Other factors that contribute to the growth of the global oil storage industry include the growing demand for petroleum products owing to a rise in road travel. This in turn is expected to give a push to the oil storage market.
Asia Pacific Oil Storage Market Looks Promising
The global oil storage market was led by the Middle East and Africa, accounting for 30% of the market in 2014. North America and Europe followed the Middle East and Africa in terms of key regional markets for oil storage. Demand for an increase in the oil storage capacity in North America is the result of the shale revolution, which stimulated the production of crude oil, leading to an oversupply of crude oil. However, the oil storage market in Asia Pacific is expected to hold lucrative opportunities in the coming years and is projected to expand at a CAGR of 8.22% from 2016 to 2024. Rising oil production and dropping oil prices are expected to be prime reasons behind the growth of the oil storage market in this region. Additionally, developing countries such as China and India lack efficient storage infrastructure, which is propelling the need for oil storage systems, boosting the market.
High Initial Investments Required for Oil Storage Expansion
The players in the global oil storage market face a few challenges. The high capital investment required for oil storage expansion is one of the key factors impeding the growth of the market. Additionally, the lengthy approval process required for the setting up of oil storage facilities and also for expansion, is another factor hampering the growth of the market. On the positive side however, the higher return on investment in the long term is expected to encourage players and push the market towards growth.
Browse Full Global Oil Storage Market Report with TOC:http://www.mrrse.com/oil-storage-market
Market Players Resorting to Strategic Alliances and Partnerships to Strengthen their Hold
The global oil storage market is moderately consolidated and the top five players, Buckeye Partners L.P., Kinder Morgan Inc., Royal Vopak N.V., Oiltanking GmbH, and NuStar Energy L.P., accounted for 67% of the market in 2014. Since the degree of competition is extremely high in the oil storage market, leading players are resorting to strategic alliances, mergers and acquisitions, and joint ventures to be able to draw funds for the development of new storage facilities. Such partnerships are helping companies to expand not only the crude oil storage infrastructure but also their terminal networks. A case in point would be Kinder Morgan. The company, which is focusing on expanding their storage and terminal infrastructure across North America acquired Hiland Partners in February 2015 for US$3 bn.