Diesel is an essential crude oil which has been powering the transportation, logistics, HVAC, construction, and energy industries for more than a hundred years. In the US alone, diesel fuel accounted for about 21% of the petroleum fuel consumed by the transportation sector in the year 2016. It is widely used as it provides the highest amount of energy density compared to other liquid fuels. Diesel can be further categorized into petroleum diesel and biodiesel. Biodiesel is a clean fuel in comparison to petroleum diesel, which is manufactured from vegetable oils and animal fats. The rise in demand for commercial vehicles and growth in the transport sector are leading to an increase in demand for diesel as a fuel.
Trends in the global diesel market
With diesel fuel being one of the major pollutants, alternatives to petroleum diesel are being researched upon. For instance, suppliers are manufacturing synthetic diesel obtained by extracting hydrogen content from water and mixing it with carbon dioxide. It is generally used in the automobile industry and acts as almost carbon-neutral. Audi, in 2017, in collaboration with a fuel oil supplier, set up a production facility for the manufacturing of synthetic e-diesel using renewable resources in Laufenburg, Switzerland.
Rising production of renewable diesel
Diesel suppliers across the world are manufacturing renewable diesel, which is a low-carbon biofuel. Such fuels are manufactured using renewable sources such as wastes and residues from plant and animal sources. Since it is manufactured entirely using renewable raw materials, it emits 50%-90% lower greenhouse gases compared to fossil fuels. As a result, it helps buyers attain sustainability goals by minimizing emissions.
Investment in R&D programs
In a bid to develop advanced diesel products, suppliers are entering into strategic partnerships to invest in R&D programs. For instance, in 2016, Exxon Mobil partnered with REG to study the production of biodiesel. It included manufacturing of biodiesel through the fermentation of renewable cellulosic sugars from agriculture waste. Such steps help buyers to procure cleaner diesel fuel in the future.
Consolidation in oilfield services supply base
A majority of the suppliers in the oilfield services industry are getting involved in M&A activities with other organizations to improve their overall efficiency. These include construction and engineering companies that help oilfield service suppliers in their well-completion activities. For instance, in 2016, oilfield supplier Schlumberger acquired Cameron International. The acquisition helped Schlumberger integrate its reservoir, well engineering, and digital mapping technologies with Cameron’s drilling, processing, and flow control technologies. Such activities help diesel suppliers obtain oilfield services with highly advanced technologies, which, in turn, increases their production efficiency.