Demulsifier Market is forecast to reach US$2.1 billion by 2026, after growing at a CAGR of 3.8% during 2021-2026. Demulsifiers are specialty chemicals that are a combination of demulsifying compounds such as phenol-formaldehyde resin, used for the separation of water from crude oil during the crude oil production processes. Crude oil is produced from a reservoir, it tends to become mixed with either natural formation water or mixed formation and injection water. It is critical for refining process operations that the crude oil is efficiently and quickly separated with the help of demulsifiers. Demulsifiers reduce the interfacial tension at the water-oil interface which creates less stable water dispersion. Thus, demulsifiers are used to produce a high-quality oil with low water content and are also used in lubricant manufacturing plants. Thus, these specialty chemicals are very reliable, cost-efficient, and increase the capacity of crude oil production which is estimated to grow the market size of demulsifiers.
Impact of Covid-19
Due to lockdown, the production of oils was stopped in 2020 which limited the demand for demulsifiers. According to the US Energy Information Administration (EIA), crude oil production fell by 8% in 2020 and is expected to fall by 230,000 barrels per day (bpd) in 2021. Thus, the decline in production hindered the consumption of demulsifiers.
Demulsifier Market Segment Analysis – By Type
Oil-soluble type segment held the largest share in the global demulsifier market in 2020 as they improve the burning characteristics of the crude oil. Oil-soluble soluble in water, toluene, Xylene, an aromatic solvent that helps for the demulsification of water in oil and oil in water. It is highly capable at room temperature for crude oil demulsification. Oil-soluble demulsifier, fill the tank with the waste-oil-water solution, and inject the correct dose for demulsification of crude oil, directly from the drum. Thus, they remove the water from the bottom and clean oil from the top of the tank. Hence, increasing demand for oil-soluble is estimated to grow the market size.
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Demulsifier Market Segment Analysis – By Application
Crude oil dominated the global demulsifier market in 2020 and is growing at a CAGR of 3.1% during 2021-2026. Demulsifiers used for water separation from crude oil are a combination of compounds such as phenol-formaldehyde resin having a demulsifying activity that assists demulsification. As water may damage the refinery, induce corrosion, and reduce the efficiency of the crude oil distillation process. Thus, demulsifiers are used for the processing of crude oil. Demulsifiers offer excellent demulsification properties at low addition rates, improves the sustainability of ingredients, and reduced in cost of demulsifier formulation. Hence, increasing global crude oil production is estimated to grow the market size. According to the US Energy Information Administration, global crude oil production will average 26.9 million b/d in 2021 and 28.7 million b/d in 2022 which is estimated to grow the demand for demulsifiers.
Demulsifier Market Segment Analysis – By Geography
The Middle East dominated the global demulsifier market in 2020 with 33%, due to increasing crude oil production in Egypt, Iran, Saudi Arabia, and other Middle East countries. According to the BP Statics, in the Middle East, crude oil production increased by 1% to 1494.1 million tons in 2018 as compared to 1479.3 million tons in 2017. Also, the production in Iraq was increased by 234.2 million tons in 2019 as compared to 227 million tons in 2018. Apart from this, according to the Saudi Arabian Monetary Agency, oil exports in Saudi Arabia increased to SAR 121.5 billion in the fourth quarter of 2020 from SAR 106.5 billion in the third quarter of 2020. Hence, according to the US Energy Information Administration, crude oil production increased by 560 thousand barrels per day in January 2021 from 559 thousand barrels per day in December 2020 in Egypt. Thus, crude oil production in the Middle East is estimated to grow the demand for demulsifiers.
Demulsifier Market Drivers
Increasing Investment and Crude Oil Production is estimated to Grow the Market Size
Demulsifiers are used for the quick separation of produced water from oil and lubricant manufacturing. It is used to reduce heating expenses with their low-temperature efficiency. Hence, increasing crude oil production and investment is estimated to grow the consumption of demulsifiers. According to the Canadian Association of Petroleum Producers (CAPP), Capital investment in Alberta’s oil sands is expected to increase from $6.7 billion in 2020 to $7.3 billion in 2021. Furthermore, Apart from this, according to the Canadian Association of Petroleum Producers (CAPP), oil and gas companies will invest C$27.3 billion in 2021. Apart from this, according to the Oil & Natural Gas Corporation (ONGC), in India, crude oil production was 1788.92 TMT in 2020 which is 1.24% higher than in 2019. Additionally, according to the India Brand Equity Foundation (IBEF), oil production is expected to rise 36 billion cubic meters (bcm) in 2021. Furthermore, according to U.S. Energy Information Administration (EIA), crude oil production is expected to rise on average 11.1 million b/d in 2021 and 12.0 million b/d in 2022. According to the US Energy Information of America, global petroleum and liquid fuel demand is expected to grow by 1.7 million b/d in 2021. In addition, according to the International Monetary Fund (IMF), the crude oil production in United Arab Emirates was 2.78 million barrels per day and is expected to grow 2.85 million barrels per day in 2021 and 2.95 million barrels per day in 2022. The oil production also increased by 1.85% in 2019 as compared to 2018. Hence, increasing oil production at the global level is estimated to grow the consumption of demulsifiers.
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Demulsifier Market Challenges
Decline in Crude Oil Production
Demulsifier is a base chemical for crude oil production. It quickly removes water from the oil and provides a water/oil separation. Hence, the lack of production of crude oil is limiting the demand for demulsifiers. According to BP static, Global oil production fell by 60,000 barrels per day was more than offset by a decline in Organization of the Petroleum Exporting Countries (OPEC) production, led by the USA, (-2 million b/d), Iran (-1.3 million b/d) Venezuela (-560,000 b/d) and Saudi Arabia (-430,000 b/d). Thus, decline in crude oil production also hamper the consumption of demulsifiers.
Demulsifier Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the demulsifier market. Major players in the Demulsifier Market include:
Baker Hughes Incorporated
The Dow Chemical Company
Rimpro, and among others.
In October 2019, Nouryon, a supplier of specialty chemicals to the upstream oil and gas production process, has introduced a range of demulsifiers that provide oil producers with a more sustainable option to separate crude oil from natural gas and water.
The Middle East dominates the market of demulsifier market due to increasing crude oil production in Middles East countries such as Egypt, Saudi Arabia, United Arabia Emirates, and others.
According to the US Energy Information Administration, in Egypt, Crude Oil production increased 602 thousand barrels per day in May 2020 as compared to 568 thousand barrels per day in April 2020.
Additionally, increasing consumption of specialty chemicals for lubricant manufacturing, petrochemical refineries, sludge oil treatment, and others application is estimated to grow the consumption of demulsifiers.
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