Global Vacuum Gas Oil Market Size was valued at USD 1.1 Billion in 2022. The Vacuum Gas Oil market industry is projected to grow from USD 1.16 Billion in 2023 to USD 1.81 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 5.70% during the forecast period (2023 - 2032). The rise of the petrochemical sector, rising energy demand, environmental regulations, sophisticated refining, emerging markets, and technical advancements, are the key market drivers enhancing the market growth.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The market is significantly influenced by refinery activities. The valuable intermediate product known as VGO is produced when crude oil is refined. Petrol, diesel, jet fuel, and VGO are just a few of the refined products that are produced from crude oil by refineries. The demand for transportation fuels and other petroleum-based goods is rising as the world's population and industrialization both continue to rise. As a result, there is an increase in demand for refined goods like VGO to meet the energy requirements of diverse industries like transportation, manufacturing, and power generation.
Crude oil is divided into many components by refineries using various techniques like distillation and cracking. Vacuum distillation, which operates under reduced pressure to remove heavy hydrocarbon components from crude oil, is commonly used to generate VGO. The refinery's processing units' complexity and effectiveness affect the yield and quality of VGO. The complexity of refineries is another significant factor driving the VGO market. Fluid catalytic crackers (FCC) and hydrocrackers are sophisticated processing equipment found in complex refineries that can transform heavy, lower-value feedstocks into high-value outputs like petrol and diesel. Due to the fact that VGO is a byproduct of the cracking processes, more sophisticated refineries often create higher volumes of it.
The production and consumption of fuels for transportation have a direct impact on the demand for VGO. Fuel demand is driven by the expansion of the automotive industry, particularly in emerging economies. VGO can undergo additional processing in secondary refining plants to create more petrol, diesel and other lighter products through catalytic cracking or hydrotreating. Therefore, to meet the demand for transportation fuels, VGO must be made available and used as a feedstock in secondary refining processes. The VGO market may also be considerably impacted by changes in fuel standards and environmental restrictions. Governments all across the world are enforcing stronger pollution regulations and mandating the use of cleaner fuels. Due to this, demand for low-sulfur fuels like ultra-low sulphur diesel (ULSD) has soared. To create cleaner fuels, refineries must spend in modernising their processing equipment and technology, which frequently increases the production of VGO. The VGO generated by these modified units can be further processed to satisfy the requirements for low-sulfur fuels, which raises the market demand for it.
Refineries' physical locations also have an impact on the VGO market. Regions with high energy consumption, including Asia-Pacific and North America, tend to have refineries with larger capacities and higher VGO production rates. The competitiveness and accessibility of VGO in various markets might be impacted by the closeness to important consumption centres and logistical advantages. Thus, driving the Vacuum Gas Oil market revenue.
The global market segmentation, based on Product includes both light vacuum petrol oils (LVGO) and heavy vacuum petrol oils (HVGO). With 65.45% of market sales coming from the light vacuum petrol oil (LVGO) sector, it dominated. In general, the demand for lighter refined goods—such as petrol and naphtha—is larger than the demand for heavier products on a global scale.
The global Vacuum Gas Oil market segmentation, based on sulfur content, includes low sulfur vacuum gas oil, high sulfur vacuum gas oil. The highest revenue was produced by the low sulphur vacuum gas oil category. Globally, governments have put in place strict rules to decrease emissions from industrial processes and transportation fuels. To reduce air pollution and the negative effects of combustion on the environment, these rules frequently call for decreased sulphur content in fuels.
Figure 1: Global Vacuum Gas Oil Market, by Product, 2022 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The global Vacuum Gas Oil market segmentation, based on application, includes diesel oil production and petrol production. The category that brought in the greatest money was diesel oil production. Diesel fuel is an essential component of many industries, including power generation, industrial machinery, and transportation. Due to its broad use and significance to the global economy, diesel has had persistent high demand.
By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The North America Vacuum Gas Oil Market dominated this market in 2022 (45.80%). In North America, the demand for transportation fuels like petrol and diesel is a significant factor. Further, the U.S. Vacuum Gas Oil market held the largest market share, and the Canada Vacuum Gas Oil market was the fastest growing market in the North America region.
Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 2: Global Vacuum Gas Oil Market Share By Region 2022 (Usd Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe Vacuum Gas Oil market accounts for the second-largest market share. In order to comply with higher environmental rules, refineries have been upgraded and modernised significantly in Europe. To create cleaner and low-sulfur fuels, refineries in the area have invested in technology like hydrocracking and hydrotreating. VGO is a crucial element in the European refining industry because these procedures frequently call for bigger volumes of the substance. Further, the German Vacuum Gas Oil market held the largest market share, and the UK Vacuum Gas Oil market was the fastest growing market in the European region
The Asia-Pacific Vacuum Gas Oil Market is expected to grow at the fastest CAGR from 2023 to 2032. Rapid economic development in the APAC area has accelerated urbanisation, industrialization, and the creation of the middle class. Energy demand has increased as a result of this growth, especially in nations like China and India. The demand for refined goods, including VGO, is fueled in part by the growing industrial and transportation sectors in APAC. Moreover, China’s Vacuum Gas Oil market held the largest market share, and the Indian Vacuum Gas Oil market was the fastest growing market in the Asia-Pacific region.
Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Vacuum Gas Oil market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, Vacuum Gas Oil industry must offer cost-effective items.
Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Vacuum Gas Oil industry to benefit clients and increase the market sector. In recent years, the Vacuum Gas Oil industry has offered some of the most significant advantages to medicine. Major players in the Vacuum Gas Oil market, including LUKOIL, TAIF-NK, KazMunayGas, Axeon Specialty Products, Neste, Vertex Refining, Honeywell UOP, Gazprom Neft, Kuwait Petroleum Corporation, Zhejiang Petrochemical Corporation, and U.S. Oil & Refining Co. and others, are attempting to increase market demand by investing in research and development operations.
Integrated energy company Kuwait Petroleum Corp (KPC) is a state-owned enterprise. Its extensive operations include everything from finding oil in a reservoir to providing fuel for the vehicles. It handles crude oil, chemical, natural gas, petrochemical, and related product exploration, development, production, refining, processing, transportation, distribution, and marketing. It offers the basic petrochemicals required for the industrial production of consumer goods. KPC principally conducts business in North America, Oceania, Western Europe, the Far East, and the Middle East. While engaging with other members of the OPEC group, the firm also supports Kuwait's Ministry of Oil. Kuwait's Safat serves as the home base for KPC.
Exploration and production of crude oil and natural gas are carried out by the oil and gas business Lukoil Oil Co. (Lukoil). Russia, Kazakhstan, Azerbaijan, Uzbekistan, the Middle East, South America, Northern and Western Africa, and South-East Asia are just a few of the countries where Lukoil has interests in real estate. The business also engages in the marketing, trading, and refining of crude oil, natural gas, and refined goods. It runs a network of refineries in Italy, Romania, Bulgaria, and Russia. The Zeeland refinery in the Netherlands is also of interest to the firm. Through its operations in Russia, Bulgaria, and Italy, Lukoil also plays a significant role in the petrochemical industry. Additionally, Lukoil generates electricity through businesses in Romania, Russia, and Bulgaria. The business uses direct retail and export activities to market its goods. Moscow, Russia serves as the home base for Lukoil.
July 2022:A 30% increase in production capacity for vacuum gas oil (VGO) was announced by Saudi Aramco. The company's ability to produce VGO will be increased to 1.2 million barrels per day by the expansion, which is anticipated to be finished by 2025.
June 2022:For $2.5 billion, Exxon Mobil purchased the VGO assets of Marathon Petroleum Corporation. Marathon's VGO refinery in Garyville, Louisiana, as well as its VGO marketing and trading operation, are also included in the deal.
| Report Attribute/Metric | Details |
| Market Size 2022 | USD 1.1 Billion |
| Market Size 2023 | USD 1.16 Billion |
| Market Size 2032 | USD 1.81 Billion |
| Compound Annual Growth Rate (CAGR) | 5.70% (2023-2032) |
| Base Year | 2022 |
| Market Forecast Period | 2023-2032 |
| Historical Data | 2018 & 2020 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | By Product, Sulfur Content, Application |
| Geographies Covered | North America, Europe, Asia Pacific, and Rest of the World |
| Countries Covered | The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil |
| Key Companies Profiled | LUKOIL, TAIF-NK, KazMunayGas, Axeon Specialty Products, Neste, Vertex Refining, Honeywell UOP, Gazprom Neft, Kuwait Petroleum Corporation, Zhejiang Petrochemical Corporation, S. Oil & Refining Co. |
| Key Market Opportunities | Increased technological advancements in refinery operations |
| Key Market Dynamics | demand for transportation fuels and other petroleum-based goodsrising population and industrialization |
Frequently Asked Questions (FAQ) :
The global Vacuum Gas Oil market size was valued at USD 1.1 Billion in 2022.
The global market is projected to grow at a CAGR of 5.70% during the forecast period, 2023-2032.
North America had the largest share in the global market
The key players in the market are LUKOIL, TAIF-NK, KazMunayGas, Axeon Specialty Products, Neste, Vertex Refining, Honeywell UOP, Gazprom Neft, Kuwait Petroleum Corporation, Zhejiang Petrochemical Corporation, and U.S. Oil & Refining Co.
The light Vacuum Gas Oil (LVGO) category dominated the market in 2022.
The Low Sulfur Vacuum Gas Oil had the largest share in the global market.
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