4 Emerging Trends In The Oilfield Services Industry In 2024

Source: ey.com

These last decade, these last couple of years are following a trend of renewable energy. Electric cars, electric machinery, and other similar ideas are popping up everywhere. And, that’s a good thing. Testing out all of our possibilities is good for the future.

However, we cannot ignore the fact that we humans are still very dependent on oil and everything else that comes from it. Crude oil is not just about creating gasoline that we use for cars. No, there are tons of other uses. A lot of solvents are made from this naturally-made black liquid. Car and bicycle tires, ink, dyes, shoes, and hundreds of other products need crude oil.

Because of this, the oilfield services industry is well and alive in 2024 and will continue to live throughout the next several decades. Since this industry is still growing, we wanted to write this article to tell you about all the emerging trends of 2024. If you’re interested in becoming part of this industry, you’ll know exactly where to invest.

Why the oilfield services industry is essential

Source: energyfuse.org

Before we can start talking about the trends of this industry, we’ll first need to cover why it is so important.

Naturally, the reasoning why it is so essential is simply because oil and gas drilling processes cannot be executed without the right equipment. The machinery required to handle these tasks is extremely complicated, massive, and very expensive.

In other words, someone has to create and build these digging, drilling, and mining tools. Not only that but there has to be an industry that takes care of said tools. If drilling machinery isn’t serviced and maintained, it won’t manage to last for a year.

Keep in mind; the oilfield service industry does not focus solely on digging or mining machinery. A huge part of it also created support services like transport, testing, scanning, tools for researching, construction, and more.

And, as the demand for crude oil and gases is on a constant rise, supply can only be increased by innovating faster, more reliable, and overall better tools. The companies that are a part of the oilfield services industry are the only ones capable of such innovations.

With that out of the way, let’s talk about some of the trends for 2024.

A sudden increase in oil demand

Source: tehrantimes.com

With the health situation around the world in 2020 and 2024, the demand for crude oil, or specifically, petroleum fuel dropped considerably. Because of this, the whole industry suffered and the market value started to drop.

However, in such a situation, this was expected. This was not a sign that the petroleum industry will suddenly disappear. In fact, after this drop, the demand is expected to increase to levels that it has never seen before.

The trend is clear. Early in the year (January 2024), the price of petroleum skyrocketed up to $100 per barrel. That’s the most expensive it has ever been since 2008, and that’s saying a lot. Compared to November last year, one barrel cost only about $65. That’s an increase of 40% and experts believe it will continue growing throughout 2024.

Because of this, it is said that the oilfield services industry will grow up to 140 billion US dollars by 2027. To put that into perspective, it was valued at just below 100 billion USD in 2020.

Like Morgan Construction, some oilfield services companies already have a large enough fleet ready to satisfy any kind of project.

Volatile pricing

Source: bitcoin.com

The trend of growth throughout the next 5 years or more will not be smooth. Not at all. Petroleum pricing per barrel is currently extremely volatile. One month, prices skyrocket, and another month they plummet.

This kind of trend can have a serious impact on a lot of companies in the industry, especially those that are not ready for sudden changes.

While volatile pricing is never good for any side, we believe that many can and will capitalize on this trend.

Technological progress

Source: oilprice.com

Any industry without technological progress is destined to end. Fortunately, the petroleum services industry is nowhere near its technological peak. At least, that’s what the experts claim as of 2024.

But, it is believable that there is still a lot of room to further improve drilling and mining tools. These advancements can come in form of power, speed, reliability, costs, and efficiency. Considerably cutting down on maintenance and parts costs can quickly drive the industry to a brighter future.

Improved power efficiency can also be a huge upgrade for a lot of companies. How? Well, today’s drilling rigs need a lot of power. That power is delivered through huge generators that spend 20 to 30 m3 of diesel fuel every single day. Multiply that with the number of total running drilling rigs (which is usually in the dozens or hundreds) and then with 365 days in the years and you will get billions of dollars yearly expense for fuel.

If the oilfield services industry can provide better power efficiency, that can help petroleum drilling companies save millions of dollars a year.

Keep in mind; bleeding edge technology can have some huge disadvantages too. So, it’s important for oilfield services companies to ensure their equipment is properly tested, inspected, and maintained throughout their lifetime.

The United States will dominate the market

Source: constructionreviewonline.com

The race for crude oil production has been going on for decades now, but, since the 2000s, North America has seen a huge spike. Currently, they hold about 25% of petroleum products in the world.

This trend is expected to continue throughout the 2020s, or at least until 2028. With that kind of trend, we advise a lot of companies in this industry to focus their “firepower” on North America.

While it is still very early in the year and we cannot be certain what other trends 2024 will entail, we believe it is safe to say that these trends will continue through the rest of the year and the next couple of years too.