AC Electric Motor Sales In Oil And Gas Market To Grow By USD 3.58 Billion (2024-2028), Rising Oil Demand And AI Driving Market Transformation - Technavio Report

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Key Market Trends Fueling Growth

In the oil and gas industry, the shift from hydraulic motors to AC electric motors is gaining momentum, particularly in applications such as remotely operated vehicles (ROVs) and subsea production systems. Hydraulic motors, while traditionally used due to their relatively low cost and higher power density, come with drawbacks such as venting, leaking, and a larger size compared to electric motors of the same capacity. In ROVs, the elimination of hydraulic power units, couplings, fluid lines, and valve packages in electric motor designs leads to increased reliability and reduced downtime. Furthermore, electric motors offer more efficient operations in subsea production systems, eliminating the need for hydraulic power units and reducing operating costs and risks. The increasing adoption of electric motors in these applications is expected to fuel the growth of the global AC electric motor sales in the oil and gas market.

In the Oil and Gas market, energy efficiency and sustainability are top priorities. Ac Electric Motors play a crucial role in drilling, pumping, compressing, and processing fluids in drilling rigs, refineries, petrochemical plants, midstream facilities, and pumping stations. Smart technologies like AC electric motors offer energy-efficient solutions for harsh operating conditions, such as extreme temperatures, corrosive atmospheres, and potentially explosive environments. Induction motors and DC motors are popular choices due to their reliability and compatibility with power systems. Energy efficiency improvements are essential in an industry facing economic uncertainties and volatile oil prices. AC electric motors convert electrical energy into mechanical energy for bulk usage in various applications, including ventilation, pressurization, blending, agitation, and compressor systems. Compatibility with alternative energy storage solutions, like batteries, is also a trend in the industry. AC electric motors consist of an outside stator with coils and an inside rotor with an output shaft. The electromagnetic induction process powers these motors, making them a vital component in the global energy market. Voltage and power consumption are critical factors when selecting the right motor technology for Oil and Gas applications.

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Market
Challenges

• The volatility of global crude oil prices significantly impacts the profitability and performance of oil and gas Exploration and Production (E&P) companies. Fluctuations in prices can result in the cancellation or rescheduling of projects due to reduced profitability. According to the International Energy Agency (IEA), the volume-weighted average crude oil import cost for major oil-importing countries was USD103.0 billion in 2022, a 12.2% increase from 2021. This trend has been a concern for the industry over the past decade, with several projects being canceled or delayed due to low prices. The global pandemic further exacerbated this issue, causing delays in Arctic oil field development projects. Additionally, geopolitical tensions, such as the US-Iran conflict, contribute to the volatility in prices. Upstream companies are particularly affected by these price fluctuations as their production costs are largely fixed, making investment decisions and profits vulnerable. This capital-intensive nature of E&P operations can result in slow growth or even a decline in activities, including drilling project delays and cancellations. Consequently, fluctuations in global crude oil prices pose a significant challenge to the growth of the entire oil and gas industry, impacting all value chain members, including the global AC electric motor sales in oil and gas market.
• In the Oil and Gas industry, midstream facilities and pumping stations rely heavily on AC electric motors for converting electrical energy into mechanical energy for bulk usage. However, challenges exist in this market. Economic uncertainties and oil price fluctuations impact the demand for AC motors. Alternative energy storage solutions like batteries and DC motors pose competition. Motor technology must withstand harsh operating conditions, including extreme temperatures, corrosive atmospheres, and potentially explosive environments. Reliability is crucial. AC electric motors, such as induction and synchronous, offer varying speeds and torque current pumps for different applications. Energy efficiency improvements are essential in today's global energy landscape. AC electric motors, with their outside stators and inside rotors, are compatible with power systems and offer high starting torque and output power. Machine tools, power tools, automation, cranes, and auxiliary generators all benefit from energy-efficient AC electric motors. Urbanization and hydrocarbon reserve exploitation further increase demand. Despite challenges, AC electric motors remain vital in the Oil and Gas sector due to their efficiency, versatility, and ability to handle heavy loads. Compatibility with voltage and power systems is crucial. As the industry evolves, AC electric motors will continue to play a significant role in the conversion of electrical energy to mechanical energy for various applications.

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Segment Overview

This ac electric motor sales in oil and gas market report extensively covers market segmentation by