Paraffin, which is a naturally occurring substance present in crude oil, often obstructs the flow when deposited on the walls of oil pipeline during the production, storage and transportation of oil and gas. As a result, oil & gas companies require more high-performance and versatile paraffin inhibitors for addressing the flow challenges. This can be credited to the ability of paraffin inhibitors to prevent wax deposition in pipelines by modifying the size and shape of the wax crystals and dispersing the paraffin back into the oil which leads to a steady flow. With significantly rising crude oil production as well as industrial production, application of paraffin inhibitor chemicals has also increased enormously over the past several years. This is expected to open new lucrative growth avenues for paraffin inhibitors market over the forthcoming years.

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The recent events of COVID-19 pandemic have made a serious impact on the crude oil production as major oil-producing countries had to halt their production and refining operations due to the lockdowns and movement restrictions on domestic and international trade and travel. These factors have affected the demand for paraffin inhibitors. However, with the formulation of stringent guidelines and demand slowly returning to normalcy, paraffin inhibitors market share is anticipated to rebound in 2021.

Major factors that are driving the growth of paraffin inhibitors market are as below:

Rising demand from oil & gas industries

Paraffin inhibitors play a key role in the upstream segment of the oil & gas sector as they offer excellent flowability and improved productivity of crude oil. Increasing consumption of oil & gas in several major end-user industries is enunciating the need to raise the oil supply further. According to credible sources, monthly crude oil production in July 2020 was recorded nearly 1.5% growth as compared to June 2020. Based on the estimates of OPEC nations including Iraq, the UAE, Saudi Arabia and Kuwait have increased their production output in July 2020. Considering the rising production across O&G industry, demand for paraffin inhibitors is likely to increase considerably over the coming years.

Ongoing technological developments

Besides the elevating demand from the end-user industries, technological advancements in the sector are also driving the industry growth. For instance, in 2018, leading specialty chemicals company Evonik announced the launch of its COPI™ technology (Crude Oil Paraffin Inhibitors) especially for the companies engaged in the extraction, transport and storage of crude oil. Additionally, manufacturers are consistently developing innovative solutions to reduce their carbon footprint. In this regard, oil & gas companies have been making hefty investments in such technologies to improve the overall system efficiency. In addition, stringent regulatory scenario to curb carbon footprints is fostering the adoption of sustainable solutions in the sector.

Pivotal trends that are enhancing paraffin inhibitors market outlook are as follows:

Heightened demand for modified poly carboxylate

With regards to the paraffin inhibitors chemistry, modified poly carboxylate is gaining increased traction owing to its high solid content and superior performance as wax inhibitors. Several researchers are involved in experimenting on modified poly carboxylate in order to improve its strength and viscosity which is favoring their adoption in the oil & gas industries. This in turn is fueling the demand for paraffin inhibitors which is positively influencing the business space. According to the report, modified poly carboxylate segment across paraffin inhibitors market is projected to register a CAGR of over 4.5% through 2027.

Burgeoning adoption across downstream companies

Downstream companies are involved in carrying out procedures such as refining, purification and processing of crude oil and petroleum products. These companies largely utilize inhibitors for removing paraffin from flowlines and pipelines and in refinery clean-up operations. Growing consumption of petrochemical and oil products across end-user industries is favoring the growth of paraffin inhibitors market from downstream. Reportedly, downstream segment is anticipated to observe a robust CAGR of over 3.5% through 2027.

Rising demand for oil in Asia Pacific

Asia Pacific is witnessing a significant rise in the consumption of crude oil across several major countries such as Japan, India, South Korea, and Australia that mainly rely on imports to meet the consumer demand. Asia Pacific reportedly accounts for over 30% of the global oil demand, which can be credited to the large population and growing industrialization. The region has oil reserves of 48 billion barrels, out of which nearly 50% are situated in China. Besides, rising investments in upstream and increasing inclination of government towards the development of domestic infrastructure for the oil & gas sector are potentially fostering the product penetration in the region. Asia Pacific paraffin inhibitors market size is expected to surpass USD 95 million by 2027.

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Some of the restraints that the industry is facing are as under:

Stringent regulatory scenario regarding the production as well as usage of paraffin inhibitors are some of the main restraining factors that are affecting the industry growth.

To conclude, heightened demand for crude oil and petroleum products across the globe coupled with expanding off-shore and on-shore projects are the prominent factors that are enhancing the market space. In addition, ongoing technological advancements in crude oil production is as well favoring the market growth further.

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