Vacuum Gas Oil Market
Report ID: SQMIG10C2048
Report ID: SQMIG10C2048
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Report ID:
SQMIG10C2048 |
Region:
Global |
Published Date: May, 2025
Pages:
193
|Tables:
84
|Figures:
69
Global Vacuum Gas Oil Market size was valued at USD 454.2 Billion in 2024 and is poised to grow from USD 473.73 Billion in 2025 to USD 663.44 Billion by 2033, growing at a CAGR of 4.3% during the forecast period (2026–2033).
The vacuum gas oil market is experiencing steady growth, driven by increasing global demand for gasoline, diesel, and other refined petroleum products. VGO, a crucial feedstock for fluid catalytic cracking (FCC) units in refineries, plays a vital role in enhancing the yield of high-value fuels. The market is experiencing steady growth driven by the increasing demand for gasoline and diesel, expanding transportation sector, industrial activities, and rising energy needs in emerging economies, continual technological advancements, and extensive research and development (R&D) activities.Increasing demand for fossil fuels across the globe, along with rising investments in research & development is projected to positively influence the industry landscape. The growing marine industry is set to surge VGO requirement as bunker fuels for deep-sea cargo ships and other vessels.The key market restraint for the vacuum gas oil market is strict mandates by global organizations on VGO composition and emission content. The International Maritime Organization (IMO) has implemented stern directives for the sulfur present in the feedstock for VGOs to be used as marine fuels.The growing need for fossil fuels across different sectors along with increasing efforts to produce a bulk output of oil & gas is projected to positively affect the industry outlook. Vacuum gas oil (VGO) is predominantly used as an intermediate feedstock to escalate gasoline & diesel production from refineries. VGO is produced through a vacuum distillation column using different processes like hydrogenation and cracking. Vacuum gas oil is also referred to as cat feed because it is utilized as a feedstock to create gasoil, gasoline, and other by-products.
How is AI Enabling Smarter Maintenance in the Vacuum Gas Oil Market?
AI is revolutionizing the vacuum gas oil market by optimizing refining processes and improving yield prediction. Through machine learning algorithms and advanced analytics, refineries can now monitor real-time data to make informed decisions about the catalytic cracking process. This enables better control of operational parameters, reduces energy consumption, and increases the output of high-value products like gasoline and diesel from VGO. AI also plays a crucial role in predictive maintenance, minimizing unplanned downtime and ensuring seamless refinery operations.
AI is also being employed to analyze global market trends, price fluctuations, and demand-supply dynamics. This predictive intelligence helps VGO producers and traders optimize supply chains, manage inventories, and respond proactively to geopolitical or environmental disruptions. Enhanced forecasting capabilities allow companies to minimize risks, reduce costs, and maintain steady profit margins in a highly volatile market environment.
For instance, In February 2024, Honeywell UOP announced the integration of its AI-powered Connected Plant software into several Asian refineries processing Vacuum Gas Oil. This technology uses AI to enhance process efficiency, reduce emissions, and optimize product output by analyzing and learning from refinery data in real-time. This development not only highlights the increasing adoption of AI but also emphasizes its transformative impact on refining operations and environmental performance in the VGO sector.
Market snapshot - 2026-2033
Global Market Size
USD 435.47 billion
Largest Segment
Light Vacuum Gas Oil
Fastest Growth
Heavy Vacuum Gas Oil
Growth Rate
4.3% CAGR
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Global Vacuum Gas Oil Market is segmented by Product, Sulfur Content, Application and region. Based on Product, the market is segmented into Light Vacuum Gas Oil (LVGO) and Heavy Vacuum Gas Oil (HVGO). Based on Sulfur Content, the market is segmented into Low Sulfur Vacuum Gas Oil and High Sulfur Vacuum Gas Oil. Based on Application, the market is segmented into Gasoline Production and Diesel Oil Production. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
As per vacuum gas oil market analysis, low sulfur vacuum gas oil is the dominant segment in the market, primarily driven by environmental regulations and the increasing demand for cleaner fuels. The global push for reducing sulfur emissions, particularly in marine and automotive sectors, has made LSVGO highly sought after. The International Maritime Organization (IMO) and other regulatory bodies have imposed strict sulfur content limits for marine fuels, which has directly increased the demand for LSVGO, as it serves as an ideal feedstock to produce low-sulfur diesel and marine fuels. The demand for cleaner products has made LSVGO the preferred choice in refineries, as it can be processed into products with significantly lower sulfur content compared to its high-sulfur counterpart.
As per global vacuum gas oil market forecast, the high sulfur vacuum gas oil segment is the fastest growing in the market. High sulfur vacuum gas oil (HSVGO) is showing a growing trend in certain regions where sulfur content restrictions are less stringent, or refineries are equipped with sulfur recovery technologies. In some markets, particularly where refineries focus on fuel oil production and have limited regulatory constraints, the demand for HSVGO remains robust. However, it is important to note that the market of HSVGO is somewhat constrained by the global trend toward cleaner energy and the shift toward low-sulfur alternatives.
As per the global vacuum gas oil market outlook, heavy vacuum gas oil (HVGO) has traditionally been the dominant segment in the market, primarily due to its higher yield of heavy fuel oils and other high-demand products. HVGO is typically used as a feedstock in the production of diesel, fuel oils, and lubricants, which are in high demand in industrial sectors, particularly in transportation, shipping, and power generation. Additionally, HVGO is utilized in hydrocracking and catalytic cracking processes to produce gasoline, kerosene, and other refined products. The higher volume yield and versatility in refining processes make HVGO the more widely used option, especially in regions with significant refining capacities like the Middle East, Asia, and Europe.
The light vacuum gas oil (LVGO) segment, while smaller in terms of total global vacuum gas oil market share compared to HVGO, is showing significant growth due to the increasing demand for high-quality fuels, cleaner products, and refined gasoline. LVGO is used in processes like hydrotreating and alkylation to produce high-octane gasoline and high-value petrochemicals. As refineries adapt to cleaner fuel mandates and seek to increase the efficiency of their operations, LVGO is becoming more sought after for its higher refining yield for cleaner fuels and lower sulfur content.
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As per regional forecast, North America remains one of the leading regions in the global vacuum gas oil market due to its advanced refining infrastructure, stringent environmental regulations, and a well-established demand for both low and high sulfur oils. The North American market is influenced by stringent environmental regulations and the region's established refining infrastructure.
In the United States, the market is driven by the increasing focus on clean fuel production, as well as the adoption of low sulfur fuels due to regulatory standards like the EPA sulfur limits and the IMO sulfur regulations for marine fuels. The U.S. has many refineries equipped with modern technologies, including hydrocracking and catalytic cracking, to produce both low sulfur and high sulfur vacuum gas oils for various uses.
In Canada, the focus is on exporting refined products and meeting the demand for diesel and fuel oil within its domestic market and to international markets, particularly in the U.S. and Europe. The refining industry in Canada is also modernizing to meet global environmental standards, contributing to the rising demand for low sulfur oils.
The Asia-Pacific region, including Japan and South Korea, is witnessing robust vacuum gas oil market growth. Japan’s refining sector is increasingly focused on producing low sulfur VGO, driven by stringent environmental regulations and the IMO 2020 sulfur cap. Meanwhile, South Korea, a major refining hub, has continued to focus on meeting both domestic and export demand for low sulfur and high sulfur VGO. As the region modernizes its refineries, it positions itself to cater to the growing global need for cleaner fuels.
Japan has stringent environmental policies that encourage the use of low sulfur vacuum gas oil, especially for its maritime sector, in line with international regulations like the IMO 2020 sulfur cap. The country has heavily invested in upgrading its refineries to produce cleaner fuels and improve overall efficiency, creating a substantial demand for low sulfur products.
South Korea also has a robust refining industry, and with its position as one of the largest exporters of refined oil products in the world, the demand for both low sulfur and high sulfur vacuum gas oil remains strong. South Korea's refineries focus on producing high-quality diesel and marine fuels for export, and the growing demand for cleaner fuels has led to the increase in demand for low sulfur vacuum gas oil.
As per regional outlook, Europe, with its advanced refining sector, is a key player in the vacuum gas oil market. The United Kingdom has seen a growing demand for low sulfur VGO, primarily driven by the IMO 2020 sulfur cap and EU regulations on emissions. Similarly, Germany is focusing on producing refined products such as VGO in line with environmental policies that target reducing sulfur emissions. In Italy, the demand for low sulfur VGO is rising due to the shipping industry’s adoption of cleaner fuels to comply with IMO regulations, further boosting the market's growth in the region.
The United Kingdom, a leading player in Europe market, has set high standards for low sulfur fuels, particularly in response to EU sulfur emissions regulations and international guidelines for marine fuels. As a result, the demand for low sulfur vacuum gas oil is growing rapidly, especially considering the UK’s commitment to reducing its carbon footprint and reliance on fossil fuels.
Germany, with its well-established refining sector, is also moving toward cleaner fuels in line with the EU’s commitment to a sustainable future. The country’s refineries have adopted advanced technologies that enable them to produce low sulfur vacuum gas oil efficiently. Moreover, Germany's industrial base, which includes a major focus on automotive manufacturing, requires a significant supply of high-quality fuel oils, driving demand for both low and high sulfur oil products.
In Italy, the vacuum gas oil market is driven by regional demand for clean fuel production and its marine shipping industry, which requires low sulfur fuel oils in line with IMO 2020 regulations. The market in Italy is seeing growth in low sulfur products, especially as refineries modernize to meet the higher standards set by both the EU and IMO.
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Rising Global Demand for Transportation Fuels
Technological Advancements in Refining Processes
Environmental Regulations and Emission Norms
Volatility in Crude Oil Prices
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The global vacuum gas oil industry remains competitive with a mix of long-established oil and gas giants, innovative refining technology providers, and a rising wave of startups focused on cleaner and smarter refining processes. Major players such as ExxonMobil, Shell, BP, and Chevron continue to dominate the market with expansive refining capacities and integrated supply chains. However, there is growing momentum among smaller, agile startups leveraging AI, IoT, and sustainability-driven technologies to disrupt the traditional refining landscape. In February 2024, Chevron announced a collaboration with a startup named RefinoTech AI, a tech-driven firm specializing in real-time AI optimization for Vacuum Gas Oil cracking units. This partnership aims to deploy predictive maintenance and yield enhancement solutions across Chevron’s North American refineries. The move reflects a broader trend of legacy oil majors partnering with agile startups to optimize performance and remain compliant with environmental norms.
As the demand for cleaner and more efficient energy solutions rises, innovative startups are emerging within the market. These startups are focused on developing advanced refining processes, improving the efficiency of conversion technologies, and exploring sustainable alternatives for petroleum-based products. Additionally, they aim to enhance the economic and environmental impact of the refining processes by focusing on reducing carbon footprints, improving energy efficiency, and incorporating renewable resources.
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, the market is affected by several factors, including an increase in energy consumption, especially in emerging economies, and changes to cleaner, more durable fuel options. Large trends in the market include increasing high -quality fuel, increase in green technologies and emphasis on operating efficiency and cost reduction in refineries. In addition, environmental considerations continue to use pure production methods and drive the development of advanced catalysis technologies and cleaner fuel. Substantial investment in R&D activities coupled with flourishing gasoline & diesel demand for automotive is projected to cater to the North America regional outlook. In the Asia Pacific region, rising need for bunkering fuel in the developing economies like China and India is anticipated to propel vacuum gas oil market. Large unconventional reserves discoveries like shale along with vast E&P activities in bulk reserves is expected to significantly affect vacuum gas oil market in the Middle East and African region. However, the market faces challenges such as fluctuations in crude oil prices, regulatory pressure and infection for renewable energy sources, which can affect VGO's long-term growth capacity.
| Report Metric | Details |
|---|---|
| Market size value in 2024 | USD 454.2 Billion |
| Market size value in 2033 | USD 663.44 Billion |
| Growth Rate | 4.3% |
| Base year | 2024 |
| Forecast period | 2026-2033 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
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| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
Methodology
For the Vacuum Gas Oil Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Vacuum Gas Oil Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
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With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Vacuum Gas Oil Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Vacuum Gas Oil Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
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