Vacuum Gas Oil Market Size 2026-2030
The vacuum gas oil market size is valued to increase by USD 130.2 billion, at a CAGR of 5.3% from 2025 to 2030. Increase in demand for gasoline and diesel will drive the vacuum gas oil market.
Major Market Trends & Insights
- APAC dominated the market and accounted for a 32% growth during the forecast period.
- By Product - Lower sulphur content segment was valued at USD 236.4 billion in 2024
- By Type - Light VGO segment accounted for the largest market revenue share in 2024
Market Size & Forecast
- Market Opportunities: USD 219.5 billion
- Market Future Opportunities: USD 130.2 billion
- CAGR from 2025 to 2030 : 5.3%
Market Summary
- The vacuum gas oil market is fundamentally shaped by the refining industry's continuous effort to maximize the value extracted from each barrel of crude oil. As an essential intermediate hydrocarbon stream, it serves as the primary charge for secondary conversion units.
- The market's trajectory is closely tied to the demand for high-value transportation fuels and the economic incentives for upgrading heavy oil fractions. A key dynamic is the technological race in refinery process optimization, where investments in advanced hydrocracking and fluid catalytic cracking technologies are pivotal.
- For instance, a refinery manager must constantly evaluate the feedstock blend composition against fluctuating crude prices and regional fuel demand. This involves a complex decision-making process to balance the costs of processing heavier, more contaminated crudes with the premium prices fetched for ultra-low sulphur diesel production.
- This operational balancing act, governed by stringent environmental regulations and petroleum refining economics, defines the competitive landscape and drives innovation in catalyst technology and conversion unit efficiency, ensuring that refiners can adapt to both market opportunities and challenges.
What will be the Size of the Vacuum Gas Oil Market during the forecast period?
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How is the Vacuum Gas Oil Market Segmented?
The vacuum gas oil industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2026-2030, as well as historical data from 2020-2024 for the following segments.
- Product
- Lower sulphur content
- High sulphur content
- Type
- Light VGO
- Heavy VGO
- Application
- Gasoline production
- Diesel oil or kerosene production
- Others
- Geography
- North America
- US
- Canada
- Mexico
- APAC
- China
- India
- Japan
- Middle East and Africa
- Saudi Arabia
- UAE
- South Africa
- Europe
- Germany
- France
- UK
- South America
- Brazil
- Argentina
- Rest of World (ROW)
- North America
By Product Insights
The lower sulphur content segment is estimated to witness significant growth during the forecast period.
The lower sulphur content vacuum gas oil segment is expanding, driven by stringent clean fuel regulations mandating cleaner transportation fuels. Refiners are investing in advanced distillate hydrotreating and hydrodesulfurization process technologies to meet these standards.
This is critical for ultra-low sulphur diesel production and for creating compliant bunker fuel blending components that adhere to new marine fuel specifications.
The economic viability of these upgrades is a key consideration in petroleum refining economics, as effective conversion can improve distillate yield maximization by over 12%.
Success in this segment hinges on optimizing these processes to improve refinery margin analysis while ensuring full compliance, making low sulphur vacuum gas oil a pivotal product stream for modern refineries.
The Lower sulphur content segment was valued at USD 236.4 billion in 2024 and showed a gradual increase during the forecast period.
Regional Analysis
APAC is estimated to contribute 32% to the growth of the global market during the forecast period.Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The geographic landscape is characterized by divergent regional strategies. APAC is the epicenter of growth, accounting for over 32% of new opportunities, driven by greenfield projects incorporating massive vacuum distillation unit and residue fluid catalytic cracking capabilities.
In contrast, North America's mature market focuses on vacuum residue upgrading at existing sites, enhancing the refinery complexity index to gain a competitive edge. These upgrades improve refinery feedstock flexibility, allowing facilities to process a 20% wider range of crudes.
Investments in advanced gas oil hydrotreating and aromatic saturation technologies are common in both regions, influenced by evolving bunker fuel market dynamics and the universal push for cleaner fuel outputs.
Market Dynamics
Our researchers analyzed the data with 2025 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
- Navigating the complexities of the vacuum gas oil market requires a deep understanding of interconnected technical and economic factors. The impact of crude quality on vgo yield is a primary concern for refiners, as processing high-tan crude presents unique challenges that can affect downstream equipment and final product specifications.
- Optimizing fcc unit for gasoline production remains a core objective, but the strategic decision between heavy vgo vs light vgo hydrocracking depends heavily on regional demand for diesel versus gasoline. Furthermore, the imperative to meet stringent environmental standards, such as those addressed by meeting imo 2020 with vgo blendstocks, forces continuous innovation.
- Refiners are increasingly investing in the comprehensive upgrading vacuum residue to transportation fuels, a capital-intensive process that promises higher margins. The choice of hydrotreating catalysts for ultra-low sulfur diesel is critical, as catalyst performance directly influences operational expenditure.
- Effective process control for vacuum distillation columns is foundational to the entire upgrading chain, where advanced analytics can improve separation efficiency by more than 5% compared to legacy systems. This focus extends to selecting the right cost-benefit of residue upgrading technologies and understanding vgo as a feedstock for base oil production, highlighting the multifaceted strategies required for success.
What are the key market drivers leading to the rise in the adoption of Vacuum Gas Oil Industry?
- An increase in the global demand for transportation fuels such as gasoline and diesel is a key driver for the market.
- Sustained transportation fuel demand remains a primary market driver, compelling refiners to maximize the output of high-octane gasoline components.
- This is achieved through the extensive use of fluid catalytic cracking units, which are critical to the gasoline pool contribution and can improve throughput by as much as 8% with modern catalysts. The emphasis on gasoline blendstock quality is paramount.
- Furthermore, a cohesive petrochemical integration strategy allows for the flexible use of streams like coker gas oil as a valuable petrochemical feedstock, diversifying revenue.
- Optimizing for diesel fuel properties and jet fuel production also contributes, with integrated planning improving asset utilization by over 10%.
What are the market trends shaping the Vacuum Gas Oil Industry?
- The rise in refinery upgradation projects within the oil and gas industry is a prominent market trend, driven by the need for greater efficiency and cleaner fuel production.
- A significant trend involves extensive refinery upgrades to enhance conversion unit efficiency and adapt to changing market needs. Refiners are adopting advanced hydrocracking process units and mild hydrocracking technology to transform lower-value streams into premium cat cracker feedstocks, achieving a 15% improvement in product yield optimization. These investments in secondary conversion units are central to overall refinery process optimization.
- Modernizing the refinery configuration not only boosts output but also improves energy efficiency in refining by up to 10%. This strategic focus also supports carbon intensity reduction goals, with some projects demonstrating a 5% decrease in operational emissions, underscoring a dual focus on profitability and sustainability.
What challenges does the Vacuum Gas Oil Industry face during its growth?
- Fluctuations in the quality of vacuum gas oil present a key challenge that can affect refinery operations and final product consistency.
- Managing feedstock quality is a persistent challenge, as crude slate variation directly impacts the consistency of the intermediate hydrocarbon stream. An inconsistent feedstock blend composition, particularly when dealing with heavy vacuum gas oil, can accelerate catalyst deactivation management cycles, increasing operational costs by 5–7%. Effective heavy oil processing requires robust feedstock compatibility testing and process controls for thermal cracking prevention.
- Failure to manage these variables can lead to off-spec products, necessitating costly reprocessing. Conversely, advanced pretreatment for asphaltene content reduction can lead to a 3-point cetane number improvement in the final diesel product, demonstrating the value of proactive quality control.
Exclusive Technavio Analysis on Customer Landscape
The vacuum gas oil market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the vacuum gas oil market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape of Vacuum Gas Oil Industry
Competitive Landscape
Companies are implementing various strategies, such as strategic alliances, vacuum gas oil market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the industry.
Abu Dhabi National Oil Co. - Delivering specialized vacuum gas oil to meet the stringent requirements of the aviation industry, enhancing fuel performance and reliability.
The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
- Abu Dhabi National Oil Co.
- BP Plc
- Chevron Corp.
- China National Petroleum Corp.
- Eni SpA
- Exxon Mobil Corp.
- Hess Corp.
- Indian Oil Corp. Ltd.
- Kuwait Petroleum Corp.
- Marathon Petroleum Corp.
- Occidental Petroleum Corp.
- Petroleos Mexicanos
- Phillips 66 Co.
- PJSC LUKOIL
- Repsol SA
- Rosneft Oil Co.
- Saudi Arabian Oil Co.
- Shell plc
- Sinopec Shanghai Petro Co.Ltd.
- TotalEnergies SE
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key industry players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Recent Development and News in Vacuum gas oil market
- In August, 2024, ExxonMobil announced the commencement of startup operations at its new Fawley Hydrofiner in the UK, a project designed to upgrade distillates into ultra-low sulphur diesel.
- In November, 2024, TotalEnergies and Technip Energies initiated a collaboration to accelerate the deployment of next-generation FCC catalyst technologies across their global refinery network to optimize light VGO conversion.
- In February, 2025, Marathon Petroleum Corp. allocated $200 million for its Galveston Bay refinery project, which includes constructing a new high-pressure distillate hydrotreater to upgrade high-sulphur distillates.
- In May, 2025, Indian Oil Corp. Ltd. commissioned a new hydrocracker unit at its Paradip Refinery, enhancing its capability to produce ultra-low sulphur diesel from vacuum gas oil feedstock.
Dive into Technavio’s robust research methodology, blending expert interviews, extensive data synthesis, and validated models for unparalleled Vacuum Gas Oil Market insights. See full methodology.
| Market Scope | |
|---|---|
| Page number | 283 |
| Base year | 2025 |
| Historic period | 2020-2024 |
| Forecast period | 2026-2030 |
| Growth momentum & CAGR | Accelerate at a CAGR of 5.3% |
| Market growth 2026-2030 | USD 130.2 billion |
| Market structure | Fragmented |
| YoY growth 2025-2026(%) | 5.1% |
| Key countries | US, Canada, Mexico, China, India, Japan, South Korea, Australia, Indonesia, Saudi Arabia, UAE, South Africa, Israel, Turkey, Germany, France, UK, Italy, Spain, The Netherlands, Brazil, Argentina and Chile |
| Competitive landscape | Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Research Analyst Overview
- The vacuum gas oil market is defined by the strategic imperative of refinery process optimization. As a critical feedstock, its conversion into high-value products is central to refinery profitability. The adoption of advanced conversion technologies, including the hydrocracking process and residue fluid catalytic cracking, is non-negotiable for competitiveness.
- Decisions at the boardroom level are increasingly focused on capital allocation for vacuum residue upgrading projects. Such investments in mild hydrocracking technology can boost high-value distillate yields by up to 15%, directly impacting quarterly earnings.
- The market is also shaped by the technical challenges of managing feedstock blend composition, particularly with heavy vacuum gas oil and coker gas oil, to prevent thermal cracking. Ensuring high gasoline blendstock quality and achieving cetane number improvement for diesel are key performance indicators.
- Success hinges on maximizing conversion unit efficiency and pursuing effective asphaltene content reduction to produce fungible products like ultra-low sulphur diesel, petrochemical feedstock, and components for bunker fuel blending.
What are the Key Data Covered in this Vacuum Gas Oil Market Research and Growth Report?
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What is the expected growth of the Vacuum Gas Oil Market between 2026 and 2030?
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USD 130.2 billion, at a CAGR of 5.3%
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What segmentation does the market report cover?
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The report is segmented by Product (Lower sulphur content, and High sulphur content), Type (Light VGO, and Heavy VGO), Application (Gasoline production, Diesel oil or kerosene production, and Others) and Geography (North America, APAC, Middle East and Africa, Europe, South America)
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Which regions are analyzed in the report?
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North America, APAC, Middle East and Africa, Europe and South America
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What are the key growth drivers and market challenges?
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Increase in demand for gasoline and diesel, Fluctuation in quality of vacuum gas oil
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Who are the major players in the Vacuum Gas Oil Market?
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Abu Dhabi National Oil Co., BP Plc, Chevron Corp., China National Petroleum Corp., Eni SpA, Exxon Mobil Corp., Hess Corp., Indian Oil Corp. Ltd., Kuwait Petroleum Corp., Marathon Petroleum Corp., Occidental Petroleum Corp., Petroleos Mexicanos, Phillips 66 Co., PJSC LUKOIL, Repsol SA, Rosneft Oil Co., Saudi Arabian Oil Co., Shell plc, Sinopec Shanghai Petro Co.Ltd. and TotalEnergies SE
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Market Research Insights
- The market is shaped by petroleum refining economics, where refinery feedstock flexibility is a key determinant of profitability. The ability to manage crude slate variation allows leading operators to improve refinery margin analysis by up to 5%. As transportation fuel demand shifts, so does the strategic focus on product yield optimization and distillate yield maximization.
- Investments in advanced refinery configurations that support heavy oil processing and a flexible petrochemical integration strategy are critical. These upgrades can improve energy efficiency in refining by 8%, directly impacting operational costs. Furthermore, adherence to evolving clean fuel regulations and marine fuel specifications influences both short-term operational tactics and long-term capital expenditure, making adaptability a core competitive advantage.
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