Crude oil is produced in the oil- in-water form during oil exploration and production activities. The presence of oil in water leads to corrosion of pipelines and vessels. This has significant bearing on the transportation cost. Demulsifiers are active chemicals used to separate emulsified water from crude oil during production processes. Demulsification is an important process carried out to remove salt and water in the emulsion. Demulsification is done prior to the refining of crude oil. If skipped, the salt and water present in emulsion may create hindrance during the refining process. This can lead to severe corrosion of equipment. Demulsifiers primarily thwart the repeated oil emulsion formulation. For this purpose, synthetic demulsifiers are added to the emulsion to separate oil from the water through the process of sedimentation.

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The demulsification process can be time critical due to the short residence time. In line with this, major players in the market maintain steady stock of a wide variety of demulsifiers made from different chemicals in order to offer tailor-made customer-driven high performance solution. For instance, BASF SE offers the Basarol line of demulsifiers specifically designed for fast water dropping, drying, and desalting. In order to sustain their competitive position in the market, key players have been adopting the strategy of introducing customer-driven solutions to optimize efficiency during the refining process.
Growth of demulsifiers is directly proportional to the production of crude oil. Rise in demand for energy is acting as a key driver of crude oil production. This, in turn, is projected to augment the demand for demulsifiers in the near future. However, toxic effects of chemicals used in demulsifiers on the environment and implementation of stringent government regulations are projected to hamper the demand for demulsifiers during the forecast period. Emphasis on the use of green demulsifiers, which are manufactured using environmentally-friendly chemicals, is projected to offer lucrative opportunities for the market during the forecast period.

Based on product, the demulsifier market can be bifurcated into water soluble and oil soluble. Oil soluble was the widely used segment of the demulsifier market in 2016. It is also the major revenue generating segment of the market. Oil soluble demulsifiers are highly effective in separating water in oil emulsion, as the water is in the dispersed phase, while oil is in the continuous phase.

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In terms of application, the demulsifier market can be classified into petroleum refining, crude oil processing, lubricant manufacturing, oil based power plants, and sludge oil treatment. Crude oil processing was the dominant segment of the demulsifier market in terms of revenue in 2016. Led by the rapid growth in the automotive industry, particularly in Asia Pacific, lubricants industry is expected to be a major consumer of demulsifiers during the forecast period.

In terms of region, Middle East and North America dominated the demulsifier market in 2016 owing to the presence of significant oil and gas reserves in the region. Middle East is a lucrative market for demulsifiers. Key oil producing nations in the region such as Iran, Iraq, Saudi Arabia, the UAE, and Kuwait are expected to drive the demand for demulsifiers in the near future. The demulsifier market in North America is poised to witness significant growth during the forecast period owing to the shale gas boom in the U.S. and plans to produce oil from oil sands in Canada and the Gulf of Mexico.

Key players operating in the demulsifier market include Schlumberger Limited, Halliburton, Baker Hughes Incorporated, BASF SE, The Dow Chemical Company, Clariant AG, and AkzoNobel N.V.

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