Downhole Tools Market Outlook:
Downhole Tools Market size was estimated at USD 4.93 billion in 2024 and is expected to surpass USD 8.74 billion by the end of 2037, rising at a CAGR of 4.7% during the forecast period, i.e., 2025-2037. In 2025, the industry size of downhole tools is estimated at USD 5.15 billion.
The primary growth factor in the market for downhole tools is the growing demand for oil and gas around the world and in emerging market economies, where government policies are favorable, provided that there is no widespread recession. The EIA reported that the global petroleum consumption in 2023 reached 101.6 million barrels per day and will continue to grow through 2030. Further, in the USA, government policies such as the Inflation Reduction Act are favorable to domestic exploration investment, and the permitting for offshore drilling increased by 16% in 2022 (BOEM), all of which creates demand for downhole tools.
Many materials utilized in the supply chain are steel, tungsten, and synthetic diamonds. About 69% of tungsten consumed in the US is imported from China. Drilling tool production and supply have been growing, as seen by the 4.3% year-over-year increase in the Producer Price Index data on oil and gas machinery and the 3.9% year-over-year increase in the Consumer Price Index on services in Q1 of 2023 (BLS). The total U.S. exports of drilling tools in 2022 were $ 12.5 B. Total research, development, and demonstration activities funded in FY23 were allocated by the DOE at $1.8B, while the assembly lines in Texas and Louisiana are operating at increased production levels of 12%.
