Middle East and Africa Oil & Gas Storage Market Outlook to 2030

Middle East and Africa Oil & Gas Market Overview

• The Middle East and Africa oil and gas storage market was valued at USD 783 million, the market's expansion is primarily driven by the necessity to manage substantial hydrocarbon production, transport, and export activities. Countries like Saudi Arabia and the UAE have invested heavily in state-of-the-art storage facilities, including aboveground tanks and underground caverns, designed to handle large volumes of crude oil, refined products, and natural gas.

• The market due to its vast reserves and critical infrastructure managed by Saudi Aramco, one of the largest oil companies globally. The strategic locations of Saudi ports, such as Ras Tanura and Yanbu, support its dominance in the global energy supply chain. These facilities are key transit points for international trade, making Saudi Arabia a major hub for oil storage, not only due to its large reserves but also its capacity to efficiently manage storage and distribution activities in the region.
• Saudi Arabias Vision 2030 includes plans to expand its oil storage capacity. The country has allocated $10 billion in its 2024 budget to boost strategic oil storage, with plans to increase its reserve capacity by 20 million barrels by 2025. This initiative is aimed at improving national energy security and stabilizing global oil markets, ensuring uninterrupted supply in times of crisis.

Middle East and Africa Oil & Gas Market Segmentation

By Product Type: The market is segmented by product type into oil and natural gas. In 2023, the oil segment held the dominant market share, mainly due to the regions vast crude oil reserves, particularly in countries like Saudi Arabia, the UAE, and Iraq. These countries are responsible for significant portions of the global oil supply, necessitating large-scale storage solutions to accommodate their extensive production activities.

By Storage Type: The market is also segmented by storage type, including aboveground storage tanks and underground storage facilities. Aboveground tanks are the dominant storage type, primarily because they are more commonly used for storing crude oil and refined products in large volumes. These tanks are critical in managing the substantial oil production and export operations in countries like Saudi Arabia, where they provide flexibility in storage and logistics management.

Middle East and Africa Oil & Gas Market Competitive Landscape

The market is highly competitive, with several major international and regional players actively participating. These companies have established themselves through extensive investments in infrastructure, technological innovation, and strategic collaborations.

Middle East and Africa Oil and Gas Storage Market Analysis

Market Growth Drivers

• Expansion of Strategic Petroleum Reserves (SPR): The Middle East and Africa are strategically expanding their oil reserves due to geopolitical uncertainty and growing energy demands. By 2024, it is projected that countries such as the UAE and Saudi Arabia will continue to increase their strategic reserves to ensure energy security. Saudi Arabia alone aims to add 200 million barrels of crude oil to its reserve capacity.
• Rising Investments in Oil Storage Infrastructure: Investments in storage facilities are increasing as MEA governments look to secure their energy needs. For instance, the UAE's Fujairah port has seen a rapid increase in storage capacity, growing by 2.5 million cubic meters in 2023, driven by government-backed expansions and private sector involvement.
• Increased Production in Key Oil & Gas Countries: Countries like Saudi Arabia, Nigeria, and Angola are ramping up oil production, leading to a surge in storage demand. Saudi Arabias oil production, for instance, remains steady at around 10 million barrels per day, requiring enhanced storage infrastructure to manage excess production.

Market Challenges

• Environmental Regulations and Compliance: Stringent environmental regulations imposed by governments in the Middle East and Africa are putting pressure on storage operators. For example, South Africas revised environmental protection laws mandate that oil storage facilities install advanced vapor recovery systems, adding around $5 million per facility in compliance costs.
• Aging Storage Infrastructure in Key Regions: Many oil storage facilities in the region, particularly in countries like Angola and Sudan, are outdated and prone to operational inefficiencies. For example, more than 40% of Angola's storage infrastructure is over 30 years old, leading to higher maintenance costs and reduced storage capacity.

Middle East and Africa Oil and Gas Storage Market Future Outlook

The oil and gas storage industry in the Middle East and Africa is poised for sustained growth over the next five years. This growth will be driven by increasing energy demand, geopolitical factors, and strategic investments in storage capacity.

Future Market Opportunities

• Increased Focus on Carbon Capture and Storage (CCS): Over the next five years, countries like Saudi Arabia and the UAE will increasingly integrate carbon capture and storage (CCS) technologies into their oil storage facilities. By 2028, it is estimated that Saudi Arabia will invest over $1 billion in CCS systems to reduce carbon emissions from its oil storage operations, aligning with global sustainability goals.
• Expansion of Floating Storage and Regasification Units (FSRUs): The Middle East and Africa will witness a surge in the deployment of Floating Storage and Regasification Units (FSRUs) by 2026, with countries like Nigeria and Angola expected to add 5 million barrels of offshore storage capacity. This trend is driven by the increasing need for flexible and mobile storage solutions to support both domestic use and exports.