Oil & Gas Processing Seals Market - Forecast(2023 - 2028)

Oil & Gas Processing Seals Market Overview

The oil & gas processing seals market size is forecast to reach US$6.9 billion by 2027 after growing at a CAGR of 2.4% during 2022-2027. Oil & gas processing seals are vital components for executing various operations in the oil and gas plants. The seals are made up of materials such as elastomers and thermoplastics which help in the proper sealing of various rotating equipment in upstream, midstream, and downstream applications. Oil & gas processing seals offer reliable sealing solutions for rotating elements such as pumps, compressors, lube oils, valves, flanges, etc. The demand for downstream applications is on the rise with the increasing refining activities and this is expected to drive the market’s growth during the forecast period. For instance, according to the 2021 data by India Brand Equity Foundation, oil refining activity is rising in India as oil refining capacity stood at 259.3 million metric tonnes as of December 2021, making it the second-largest refiner in Asia. Furthermore, the oil and gas sector is exhibiting tremendous growth globally with increasing demand for oil and the rising requirement to process gas, and this is projected to augment the market’s growth during the forecast period. For instance, according to the stats by the India Brand Equity Foundation, consumption of natural gas in India will grow by 25 billion cubic metres (bcm), registering an average annual growth of 9% by 2024. The fluctuation in raw materials might hamper the market’s growth during the forecast period.

COVID-19 Impact

The oil & gas processing seals market was severely affected due to the COVID-19 pandemic. Challenges in the form of disruption in the supply chain and factory shutdown surfaced in the market which hindered the market’s growth amid the pandemic. Moreover, the stagnant growth in the oil and gas sector further slowed down the market’s growth. As per October 2020, data by World Bank, oil production dropped globally by 12% in May 2020. The oil & gas processing seals market witnessed decent growth in the last quarter of 2020. Going forward, the market is projected to have significant growth due to the expanding oil and gas sector globally.

Report Coverage

The “Oil & Gas Processing Seals Market Report - Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the oil & gas processing seals industry. 

By Type: Single, Double, and Tandem Heavy Duty Cartridge Seals
By Product Type: Non-Pusher Elastomer Seal, O-ring Pusher Seals, Metal Bellows Seals, Non-Contacting Seals, Dry-Gas Seals, and Others
By Material: Elastomers (Hydrogenated Acrylonitrile Butadiene Rubber (HNBR), Fluoro Rubber (FPM), Others), Thermoplastics (Polyetheretherketone (PEEK), Polytetrafluoroethylene Glass Filled, Polytetrafluoroethylene Carbon Filled), and Others
By Application: Upstream, Midstream, and Downstream
By Geography: North America (USA, Canada, Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, Rest of Europe), Asia Pacific (China, Japan, India, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, Rest of Asia Pacific), South America (Brazil, Argentina, Colombia and Rest of South America), and RoW (Middle East and Africa).

Key Takeaways:

• Elastomer materials are leading the oil & gas processing seals market. These materials come with robust mechanical and thermal properties which makes them a suitable option in the market.
• Downstream application is driving the market’s growth. According to the stats by the International Energy Agency, global refining activity will increase by 2.4 mb/d in 2022.
  
• The Asia-Pacific region is expected to witness the highest demand for oil & gas processing seals owing to the expanding oil and gas sector in the region. For instance, as per the stats by India Brand Equity Foundation, oil demand in India is projected to witness a 2x growth to reach 11 million barrels by 2045.

Figure: Asia Pacific Oil & Gas Processing Seals Market Revenue, 2021-2027 (US$ Billion)

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Oil & Gas Processing Seals Market Segment Analysis - By Material

The elastomer materials segment dominated the oil & gas processing seals market in 2021 and is growing at a CAGR of 2.7% during the forecast period. This type of material possesses robust properties such as corrosion resistance, lightweight, and thermal and mechanical properties ensuring reliable long-term sealing solutions for multiple operations in the oil and gas sector. Owing to such an exceptional portfolio, the elastomer is considered an ideal option in the production of oil & gas processing seals. As per the October 2021 journal by IntechOpen, a harsh environment is encountered as the depth of an oil and gas well increases. In such situations, the use of elastomer seals is preferred over other materials such as metals due to the good resistance of elastomers to heat and chemical attack. Such high use of elastomer material is expected to further increase its demand in the market during the forecast period.

Oil & Gas Processing Seals Market Segment Analysis - By Application

Downstream application dominated the oil & gas processing seals market in 2021 and is growing at a CAGR of 3.1% during the forecast period. A wide variety of oil & gas processing seals made up of thermoplastic, elastomers, and metals are extensively used in the downstream applications. The downstream application deals with the refining of oils and gases which are later used for the production of a range of useable products. The demand for downstream applications is increasing globally with increasing refining activities and this is expected to influence the market’s growth during the forecast period. For instance, according to the stats by India Brand Equity Foundation, total installed provisional refineries in the oil sector in India accounted for 246.90 MMT as of September 01, 2021, putting the oil refinery segment on a progressive track. Similarly, according to the January 2020 stats by the U.S. Department of Energy, the total combined distillation capacity of all refineries in the US increased in the last few years. In 2019, the capacity surged to 18.7 million barrels per calendar day 2019. Such massive growth in the downstream application is expected to bolster the high use of oil & gas processing seals, driving the market’s growth during the forecast period.

Oil & Gas Processing Seals Market Segment Analysis - By Geography

The Asia-Pacific region held the largest share in the oil & gas processing seals market in 2021, up to 32%. The high demand for oil & gas processing seals is attributed to the booming oil and gas sector in the region. A wide variety of seals such as o-ring pusher seals, metal bellows seals, and dry-gas seals are used massively in several applications in the region’s oil and gas sector. The oil and gas sector displays outstanding growth in the region with factors like rising investments, increasing production of oil, and the rising requirement to process gas and this is expected to stimulate the demand for oil & gas processing seals during the forecast period. For instance, as per data by India Brand Equity Foundation, the oil and gas sector in India is anticipated to attract USD 25 billion, in investment in exploration and production by 2022. Similarly, as per the stats by CEIC Data, oil production in China increased, reaching 3888.98 barrel/day in December 2020 compared to 3825.01 barrel/ day in 2019. Such a huge growth in the region’s oil and gas sector is expected to bolster the demand for oil & gas processing seals during the forecast period.

Oil & Gas Processing Seals Market – Drivers

Increasing demand for downstream applications is influencing the market’s growth

Downstream is one of the important application areas for oil & gas processing seals as this segment deals with the refining of oils, processing of gas, and later maintaining their efficient distributions. The demand for downstream is increasing globally with increasing refining activities and this is driving the market’s growth. For instance, as per the December 2021 stats by the US Energy Information Administration, refinery production surged in the US, leading to an overall rise in gasoline inventories in the country in 2021. Similarly, as per the 2021 stats by India Brand Equity Foundation, the Union Ministry of Petroleum & Natural Gas in India approved a revised project cost amounting to USD 3.8 billion to accelerate the refining capacity for the Numaligarh Refinery Expansion Project. Such massive demand for downstream applications is expected to stimulate the use of oil & gas processing seals, in turn influencing the market’s growth during the forecast period.

The expanding oil and gas sector is driving the market’s growth

A wide spectrum of oil & gas processing seals made up of materials such as thermoplastics, metals, and elastomers are used for providing better sealing solutions to rotating elements such as pumps, compressors, lube oils, valves, and flanges. These rotating elements are integral parts of the upstream, midstream, and downstream applications in the oil and gas sector. The global oil and gas sector is exhibiting tremendous growth with increasing production and consumption of oil and gas, and this is expected to propel the market’s growth during the forecast period. For instance, as per the report by India Brand Equity Foundation, demand for diesel in India is projected to double to 163 MT by 2029-30, with diesel and gasoline expected to cover 58% of India’s oil demand by 2045. Similarly, according to the stats by the Employment and Income Assistance Program, exports of US liquefied natural gas (LNG) will account for the world’s largest in 2022 as two new LNG liquefaction units, Sabine Pass LNG and Calcasieu Pass LNG will be operational in 2022. Such massive growth in the global oil and gas sector is expected to augment the high use of oil & gas processing seals, in turn driving the market’s growth during the forecast period.

Oil & Gas Processing Seals Market – Challenges

The fluctuation in the prices of raw materials might affect the market’s growth

Oil & gas processing seals involve materials such as polyurethane and hydrogenated acrylonitrile butadiene rubber which are petroleum-derived. The prices of these materials are fluctuating due to the fluctuation in the petroleum price and this might hinder the market’s growth during the forecast period. According to the statistics by ourworldindata.org, the crude oil price in 2017 accounted for US$ 54.19 per barrel which jumped to US$ 64.21 per barrel in 2019. The oil price again went down to US$ 41.84 per barrel in 2020. Such fluctuating oil prices led to volatility in the price of petroleum, which in turn is fluctuating the price of the raw materials involved in this market. This fluctuation in the prices of raw material prices might hamper the growth of the oil & gas processing seals market during the forecast period.

Oil & Gas Processing Seals Industry Outlook

Investment in R&D activities, acquisitions, product and technology launches are key strategies adopted by players in the Oil & Gas Processing Seals Market. Global oil & gas processing seals top 10 companies include:

1. Trelleborg AB
2. John Crane
3. Freudenberg Group
4. Flowserve Corporation
5. Parker-Hannifin Corporation
6. Dupont
7. Precision Polymer Engineering
8. M Barnwell Services Ltd
9. Techno Ad
10. Saint Gobain

Recent Developments

• In January 2022, John Crane announced the launch of dry gas seal digital diagnostics solution for monitoring the conditions inside a compressor. This advanced solution helps in extending the useful life of the dry seal.
• In January 2022, John Crane announced the opening of its new service center in Melbourne, Australia. This new center includes dynamic testing of dry gas seals.
• In May 2019, Trelleborg launched its new elastomer-based seals, XploR S-Seal and XploR FS-Seal, for demanding high-pressure and high temperature sealing environments in the oil and gas industry.

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