PUBLISHER: Knowledge Sourcing Intelligence | PRODUCT CODE: 1390115
PUBLISHER: Knowledge Sourcing Intelligence | PRODUCT CODE: 1390115
The oil and gas cable market is expected to grow at a CAGR of 6.38% to reach a market size of US$7.689 billion by 2028.
Oil and gas cables are specialized cables designed to facilitate the transportation of oil and gas between different locations. Ethernet cables, variable frequency drives (VFD) cables, and control and instrumentation cables are the three primary cable types widely utilized in oil and gas applications. The rise in oil production and increasing exploration activities are expected to bolster the oil-gas cable market growth.
The demand for cables in the oil and gas industry is driven by the exploration and production activities that are integral to the extraction of oil and gas. These activities involve the intricate process of extracting valuable resources from beneath the earth's surface, requiring the establishment of comprehensive cable networks. These networks play a crucial role in facilitating the smooth and efficient transportation of the extracted oil and gas from the extraction sites. According to the U.S. Energy Information Administration, in March 2023, crude oil production in the United States stood at 393,561 barrels witnessing a 5.8% increase from 371,378 barrels in November 2022.
The growing industrial and household energy requirements have created a simultaneous surge in the need for highly efficient cable infrastructure to facilitate the transportation of oil and gas resources. This demand is fuelled by the essential role that oil and gas play in powering various sectors of the economy, including manufacturing, transportation, and residential consumption which as a result positively impacts the oil-gas cable industry growth. According to the International Energy Agency, the global oil demand is expected to experience a significant increase of 6% from 2022 to 2028, reaching a level of 105.7 million barrels per day (mb/d). This anticipated surge in oil demand reflects the growing energy needs across various sectors and regions worldwide
Significant investments are being made in the development of oil and gas infrastructure, including pipelines, refineries, and storage facilities. This investment leads to an increased demand for cables to support the construction and expansion of these facilities, thereby supporting the oil-gas cable industry growth. As per the Indian Brand Equity Foundation, in May 2022, ONGC (Oil and Natural Gas Corporation) disclosed its intention to allocate a substantial investment of US$ 4 billion between FY22-25 to bolster its exploration endeavors within India. Additionally, in March 2023 press release, Kuwait Petroleum Corporation's deputy chairman stated that the nation's "Duqm refinery" project is set to be operational by the year-end and will process a substantial volume of 230,000 barrels of crude oil products each day.
The Asia-Pacific region is home to major oil and gas producers such as China, India, and Australia, which is driving significant demand for cables in their exploration and production activities. Secondly, rapid industrialization, urbanization, and infrastructural development in countries like China and India lead to increased energy consumption and consequently, a greater need for efficient cable networks. According to Energy Information Administration, in 2021, China's national oil companies (NOCs) achieved a significant increase in natural gas production, estimated at approximately 7.4 trillion cubic feet (Tcf). This marked an 8% growth compared to the previous year, showcasing the expanding capabilities of China's NOCs in meeting the rising demand for natural gas within the country.
The increasing global transition towards cleaner and more sustainable energy sources, with a strong emphasis on renewable energy, energy efficiency, and decarbonization, is having a notable impact on the demand for conventional oil and gas infrastructure, including cables. As a result, the growth of the oil and gas cable market is projected to decelerate as the industry shifts its focus toward the expanding utilization of renewable energy sources.