Oil and Gas Market Size, Share, Growth & Industry Analysis, By Type (Upstream, Downstream, and Midstream), By Deployment (Offshore and Onshore), By Application (Residential, Commercial, and Industrial), and Regional Analysis, 2024-2031

Oil and Gas Market Size

Global Oil and Gas Market size was recorded at USD 6,705.68 billion in 2023, which is estimated to be at USD 6,923.33 billion in 2024 and projected to reach USD 8,917.40 billion by 2031, growing at a CAGR of 3.68% from 2024 to 2031. In the scope of work, the report includes services offered by companies such as Exxon Mobil Corporation, TotalEnergies, Shell plc, BP p.l.c., Saudi Arabian Oil Co., Oilex Group LP, Reliance Industries Limited, Hindustan Petroleum Corporation Limited, Vedanta Limited, Indian Oil Corporation Limited, and others.

Increasing scrutiny over carbon footprint and emissions and expanding liquefied natural gas capabilities are driving the growth of the market. Investment in liquefied natural gas (LNG) infrastructure has emerged as a pivotal trend in the oil and gas market. This surge in investment is fostered by the pressing need to meet growing energy demands while transitioning to cleaner energy sources. LNG, as a lower-carbon alternative to traditional fossil fuels, plays a crucial role in reducing greenhouse gas emissions.

The construction of LNG terminals, storage facilities, and transportation networks is increasing globally. Leading countries with significant natural gas reserves, such as the United States, Qatar, and Australia, are expanding their LNG export capabilities. Additionally, developing economies in Asia and Europe are investing heavily in LNG import infrastructure to diversify their energy sources and enhance energy security.

This infrastructure expansion supports the global energy transition, creating economic opportunities by boosting trade and providing a reliable energy supply. The strategic importance of LNG infrastructure investment is underscored by its potential to stabilize energy markets, reduce dependency on coal and oil, and foster international cooperation in the sustainable energy solutions.

Oil and gas are hydrocarbon-based fossil fuels that have been fundamental to modern industrial society and the global economy. Crude oil, a liquid found in geological formations, is refined into various products such as gasoline, diesel, jet fuel, and lubricants. Natural gas, primarily composed of methane, is found in both underground rock formations and in association with oil deposits. It is processed and transported as either compressed natural gas (CNG) or liquefied natural gas (LNG). The applications of oil and gas are vast and integral to multiple sectors.

Oil products are predominantly used as fuels for transportation, heating, and electricity generation, while natural gas is employed for electricity generation, heating, and as a feedstock for chemical production. The deployment of these resources involves complex exploration, extraction, refining, and distribution processes. Exploration and extraction processes are typically conducted through drilling, followed by transportation to refineries and processing plants via pipelines, ships, or trucks. The refined products are then distributed globally, ensuring that industries, households, and businesses have access to the energy required to sustain modern life.

Analyst’s Review

The current landscape of the oil and gas market is marked by strategic efforts and growth initiatives from key industry players. These companies are increasingly focusing on diversification to balance their portfolios between traditional oil and gas operations and renewable energy projects. Significant capital is being allocated toward technological innovations aimed at enhancing extraction efficiency and reducing environmental impact.

• For instance, in June 2024, Cairn Oil & Gas, a leading entity of the Vedanta Group in India, aimed to achieve Net Zero Carbon by 2030. Its comprehensive strategy includes carbon emission reduction, renewable energy utilization, nature-based carbon solutions, and innovations such as waste-to-energy and CCUS.

In the face of volatile oil prices, companies are further optimizing their cost structures through digitalization and automation, which aids in streamlining operations and improving profit margins. Moreover, there is a noticeable shift toward expanding LNG capacities, with substantial investments in infrastructure to cater to the growing demand for cleaner energy alternatives. Additionally, companies are increasingly concentrating on strategic partnerships and mergers to consolidate Oil and Gas market positions and capitalize on synergies. The imperative for these companies is to adapt to the evolving energy landscape by integrating sustainable practices while maintaining profitability.

Oil and Gas Market Growth Factors

The oil and gas industry is increasingly focusing on the untapped potential in remote geographical areas, leading to significant exploration and production activities in these regions. These areas, often located in challenging environments such as the Arctic, deep-sea locations, and underexplored basins in Africa and South America, hold vast reserves of oil and natural gas. Advances in technology have made it feasible to explore and extract resources from these difficult-to-reach locations. Enhanced seismic imaging, deep-water drilling techniques, and improved offshore platforms are enabling companies to discover and develop new reserves.

The untapped potential in these remote areas presents a substantial opportunity to meet the growing global energy demand and diversify supply sources. However, developing these resources involves considerable challenges, including environmental concerns, logistical complexities, and high operational costs. To capitalize on these opportunities, companies are investing heavily in research and development to improve extraction technologies and reduce the environmental impact. This strategic focus on remote areas enhances global energy supply contributes to the economic development of the host regions through job creation and infrastructure development.

The oil and gas market is facing increasing scrutiny over its carbon footprint and emissions, which poses a significant challenge to its operations and growth. As concerns regarding climate change intensify, governments, regulatory bodies, and the public are demanding greater accountability and environmental stewardship from energy companies. Stricter regulations and policies are being implemented worldwide to curb greenhouse gas emissions, including carbon taxes, emission trading systems, and mandatory reporting requirements.

Companies are under pressure to adopt cleaner technologies, reduce flaring and venting of gases, and improve energy efficiency across their operations. The challenge is further exacerbated by the growing need to balance environmental responsibilities with economic viability. To address these concerns, numerous oil and gas companies are investing heavily in carbon capture and storage (CCS) technologies, transitioning to lower-carbon fuels such as natural gas, and integrating renewable energy sources into their portfolios.

Additionally, there is a growing emphasis on transparency and sustainability reporting to demonstrate commitment to environmental goals. Navigating this landscape requires companies to innovate continuously and collaborate with stakeholders to develop solutions that mitigate environmental impact while ensuring energy security and profitability.

Oil and Gas Market Trends

The increasing adoption of efficiency and cost reduction measures is a prominent trend shaping the oil and gas industry landscape. Faced with fluctuating oil prices, competitive pressures, and the need for sustainable operations, companies are turning to digitalization and automation to streamline processes and enhance productivity. Technologies such as artificial intelligence, machine learning, and the Internet of Things (IoT) are being leveraged to optimize exploration, production, and refining activities.

Predictive maintenance systems, for instance, help minimize downtime and extend the life of critical equipment, while advanced data analytics improve decision-making and resource management. Additionally, automation of routine tasks reduces labor costs and enhances operational safety by minimizing human intervention in hazardous environments. The integration of these technologies drives cost efficiency and improves the environmental performance of operations by reducing waste and energy consumption. As the industry continues to evolve, the focus on efficiency and cost reduction is likely to remain critical, enabling companies to remain competitive and resilient in the face of market volatility and regulatory challenges.

Segmentation Analysis

The global market is segmented based on type, deployment, application, and geography.

By Type

Based on type, the market is categorized into upstream, downstream, and midstream. The downstream segment captured the largest oil and gas market share of 49.13% in 2023, largely attributed to its critical role in refining, processing, and distributing oil and gas products. The downstream includes activities such as refining crude oil into valuable products such as gasoline, diesel, jet fuel, and petrochemicals, which are essential for various industries and everyday use. The expansion of the segment is mainly propelled by the rising global demand for these refined products due to increasing industrialization, urbanization, and transportation needs.

Additionally, advancements in refining technologies and the expansion of refining capacities in key regions have enhanced the efficiency and output of downstream operations. The integration of digital technologies and automation in refineries has further played a significant role in optimizing production processes, reducing costs, and improving product quality.

Furthermore, strategic investments in marketing and distribution infrastructure, such as pipelines, storage facilities, and retail networks, have strengthened the market presence of downstream companies, ensuring a steady supply of refined products to meet consumer demand.

By Deployment

Based on deployment, the oil and gas market is classified into offshore and onshore. The onshore segment is poised to record a staggering CAGR of 4.29% through the forecast period. Onshore oil and gas operations, which involve exploration and production activities conducted on land, benefit from lower operational costs and simpler logistics compared to offshore projects. The advancements in drilling technologies, such as horizontal drilling and hydraulic fracturing, have significantly enhanced the efficiency and productivity of onshore extraction processes, making previously uneconomical reserves viable for production.

Additionally, the abundance of onshore reserves, particularly in regions such as North America, the Middle East, and Russia, provides ample opportunities for exploration and development. Government policies and incentives aimed at boosting domestic oil and gas production further play a crucial role in promoting onshore activities. Moreover, onshore projects typically face fewer regulatory and environmental challenges compared to offshore operations, enabling faster project approvals and implementation.

By Application

Based on application, the oil and gas industry is divided into residential, commercial, and industrial. The industrial sector garnered the highest revenue of USD 3,332.72 billion in 2023, propelled by its significant and diverse demand for oil and gas products. This sector includes manufacturing, construction, mining, and chemical industries, all of which require substantial amounts of energy for their operations. The growing demand in the industrial sector is mainly propelled by the rising need for fuels, such as diesel and natural gas, to power machinery, equipment, and heating processes.

Additionally, oil and gas are crucial feedstock for the production of chemicals, plastics, and other industrial materials. The robust economic growth observed in emerging markets has led to increased industrial activity, thereby boosting the demand for energy. Furthermore, industrial operations often require stable and reliable energy sources, such as oil and gas, to ensure continuous production and operational efficiency. Investments in infrastructure and technological advancements have enabled industries to optimize their energy use, thereby enhancing productivity and reducing costs.

Oil and Gas Market Regional Analysis

Based on region, the global market is classified into North America, Europe, Asia-Pacific, MEA, and Latin America.

The North America oil and gas market share stood around 36.25% in 2023 in the global market, with a valuation of USD 2,430.81 billion. This significant expansion is largely attributed to the region's substantial oil and gas reserves, particularly in the United States and Canada, which are among the world's top producers. The technological advancements in hydraulic fracturing and horizontal drilling have enabled the extraction of vast shale reserves, leading to a surge in production and the transition of the U.S. into a net exporter of oil and gas.

Additionally, North America's robust infrastructure, including extensive pipeline networks, storage facilities, and refineries, supports efficient production, processing, and distribution of hydrocarbons. The region's favorable regulatory environment and government policies promoting energy independence and innovation bolster regional market growth. Moreover, strategic investments in LNG export terminals have positioned North America as a key region in the global LNG market, catering to the increasing demand for cleaner energy.

Asia-Pacific oil and gas market is poised to grow at a significant CAGR of 4.48% in the forthcoming years, primarily due to rapid economic development, urbanization, and industrialization across the region. The increasing demand for energy in countries such as China, India, and Southeast Asian nations is major factor supporting this growth, as these economies continue to expand and modernize.

• For instance, according to India Brand Equity Foundation, the demand for diesel in India is projected to double to 163 MT by 2029-30, with diesel and gasoline expected to account for 58% of the country's oil consumption by 2045.

The rising middle-class population and increasing consumption of energy-intensive goods and services amplify this demand. Additionally, significant investments in infrastructure development, including new power plants, manufacturing facilities, and transportation networks, are spurring the need for oil and gas. Governments in the region are further focusing on enhancing energy security by diversifying their energy sources and increasing domestic production capabilities. The development of LNG infrastructure, encompassing both for import and export, is a key focus area, with several projects in progress to meet the growing demand for cleaner energy alternatives. Moreover, regional collaboration and trade agreements are facilitating smoother energy trade and investment flows.

Competitive Landscape

The global oil and gas industry report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Manufacturers are adopting a range of strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, to strengthen their market standing.

List of Key Companies in Oil and Gas Market

• Exxon Mobil Corporation
• TotalEnergies
• Shell plc
• BP p.l.c.
• Saudi Arabian Oil Co.
• Oilex Group LP
• Reliance Industries Limited
• Hindustan Petroleum Corporation Limited
• Vedanta Limited
• Indian Oil Corporation Limited

Key Industry Developments

• May 2024 (Expansion): ADNOC delivered the world's first certified bulk commercial shipment of low-carbon ammonia, facilitated by carbon capture and storage, to Mitsui & Co., Ltd. for clean-power generation in Japan. Certified by TÜV SÜD, this milestone shipment was produced by Fertiglobe, supported by ADNOC's USD 23 billion decarbonization investment.
• March 2023 (Collaboration): Indian Oil Corporation Ltd. announced its plans to invest USD 742 million in the development of a cutting-edge petrochemical complex in Paradip, Odisha, India.

The global oil and gas market is segmented as:

By Type

• Upstream
• Downstream
• Midstream

By Deployment

• Offshore
• Onshore

By Application

• Residential
• Commercial
• Industrial

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • UK
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America