Vacuum Gas Oil Market Growth Analysis - Forecast Trends and Outlook (2025-2034)

The global vacuum gas oil (VGO) market size reached around USD 406.80 Billion in 2024. The market is projected to grow at a CAGR of 5.30% between 2025 and 2034 to reach nearly USD 681.81 Billion by 2034.

The global vacuum gas oil market is being driven by the rising demand for gasoline, which is primarily consumed as a fuel for transportation. Among various applications of vacuum oil, the gasoline production segment dominates the industry globally. The world vacuum gas oil market is experiencing consistent growth, fueled by increasing energy demand and growing emerging markets. As an important feedstock in sophisticated refining operations, vacuum gas oil is a vital component in the production of gasoline and diesel. The growing demand for fuel and petrochemical products also fuels market growth. Stringent environmental regulations, however, are compelling refiners to use cleaner technologies, affecting supply dynamics. Notwithstanding these challenges, continuous developments in refining processes ensure the ongoing relevance of vacuum gas oil in the energy industry. The future of the market is still determined by changing regulations and shifts in demand globally.

Vacuum Gas Oil Market Trends

Expanding refinery activities are fueling market growth.

The growing VGO demand is largely spurred by escalating refinery operations globally. With crude oil being a dominant supply of petroleum-based fuels, VGO is central to the production of refined products such as petrol, diesel, and jet fuel. Most refineries are refining their processes in order to increase transportation fuels output, providing a constant supply to fulfill global energy demands. Increased use of refined products, especially in emerging markets, further drives the market. As refining technologies advance, VGO remains a prominent feedstock, optimizing fuel production efficiency. With increased demand for cleaner fuels, refiners are transforming to comply with tighter regulations while keeping high output levels.

VGO is processed using sophisticated refinery methods, such as vacuum distillation, to yield precious fractions from crude oil. High-end refineries employ cracking processes like FCC and hydrocrackers to break down VGO into fuels with high value added like petrol and diesel. As crude oil reserves worldwide are refined at a faster rate, the demand for VGO as an intermediate product keeps increasing. Advanced refineries employ state-of-the-art processing techniques to maximize fuel yield and minimize emissions. Cracking processes, especially vacuum distillation, are important in maximizing fuel conversion rates. The increased use of VGO in hydrocracking and FCC units further strengthens its importance in the refining sector, supporting sustainable fuel production amid shifting energy demands.

VGO's function of manufacturing transportation fuels continues to be important, especially with the growing automotive industry. VGO goes through processes such as catalytic cracking and hydrotreating in secondary refining to ensure they comply with stringent fuel standards. With regulations increasingly tightening across the globe, environmental restrictions and pollution regulations push refineries to produce low-sulfur fuels so that emissions are minimized. With the shift towards cleaner fuels, hydroprocessing unit usage of VGO has increased as a way to address evolving mandates. Secondary refining processes also maximize fuel efficiency and reduce impurities in petrol and diesel production. With governments imposing tighter regulations, refineries are investing in advanced processing technology to generate high-quality output. The move to low-sulfur fuels is in line with global initiatives at sustainability, and VGO is therefore a vital component of modern refining. With advancing development, VGO will remain an integral component of the energy sector, facilitating innovation in fuel production and compliance with regulations.

The demand for VGO is experiencing vast growth in areas like Asia-Pacific and North America, where refineries are increasing production to generate higher yields. Growing energy consumption and improved production rates make demand for VGO as a refinery feedstock even greater. The developing economies within the Asia-Pacific region are witnessing increased industrial growth, driving market growth. Refining activities in North America, however, are also robust, sustaining stable supply networks. Vacuum gas oil market continues to evolve under the impact of local trends, environmental policies, and refining technology advances.

Vacuum Gas Oil Market Segment Insights

Vacuum Gas Oil Product Insights

Light Vacuum Gas Oil (LVGO) and Heavy Vacuum Gas Oil (HVGO) are key feedstocks in sophisticated refining operations. LVGO is mainly utilized in fluid catalytic cracking (FCC) units to yield high-value fuels such as gasoline, whereas HVGO is hydrocracked to produce diesel and other refined products. Both segments are critical to achieving maximum refinery production and fulfilling worldwide fuel requirements. As refineries continue to maximize conversion methods, the need for both LVGO and HVGO is high in the energy industry.

Vacuum Gas Oil Sulfur Content Insights

Low sulfur vacuum gas oil is increasing in popularity because of tighter environmental regulations that will cut emissions. It is desirable in hydrocracking and catalytic conversion, yielding cleaner fuels for transportation. On the other hand, high sulfur vacuum gas oil remains in a few refineries but needs extra desulfurization to meet global fuel standards. With growing government regulations on low-emission fuels, the market is experiencing a gradual transition towards low sulfur vacuum gas oil, encouraging sustainable refining processes globally.

Vacuum Gas Oil Application Insights

VGO has a critical application in the production of fuel, mainly for gasoline and diesel oil/kerosene. By fluid catalytic cracking (FCC), VGO is transformed into high-octane gasoline, which satisfies the growing demand in the automotive sector. Hydrocracking operations also treat VGO into diesel oil and kerosene, which is vital for the transportation and aviation industries. As energy demand keeps rising globally, refineries are concentrating on making the most out of VGO to create cleaner and more efficient fuels while conforming to tough emission standards to satisfy market needs.

Vacuum Gas Oil Regional Insights

North America is still a leading player in the Vacuum Gas Oil (VGO) market due to a well-developed refining industry and strong fuel consumption. Having large refiners such as ExxonMobil and Chevron guarantee consistent VGO supply for fuel manufacture. Refineries are compelled to use cleaner technologies due to strict environmental laws, raising demand for low-sulfur VGO. Increased shale oil production also improves feedstock availability, which aids in market growth in the United States and Canada.

Europe's VGO market is defined by stringent fuel quality standards and a high level of emphasis on emissions reduction. Germany, France, and the UK place special importance on the production of low-sulfur fuel, with hydrocracked VGO demand increasing as a result. Shell and TotalEnergies are among the refiners that are investing in newer processing technologies to address changing requirements. The move towards renewable sources of energy creates challenges, but sustained fuel use in the transportation and petrochemical industries ensures VGO's status as an important refining feedstock.

Asia-Pacific is witnessing high growth in the VGO market on account of growing refining capacities and rising energy demand. China, India, and South Korea are heavily investing in refining infrastructure, with key players such as Reliance Industries and Sinopec dominating the market. Higher VGO utilization is being driven by increasing demand for gasoline, diesel, and jet fuel in developing economies. Additionally, government initiatives to improve fuel efficiency and reduce emissions are encouraging refiners to adopt low-sulfur VGO processing methods.

Latin America's VGO market is sustained by its growing oil refining industry, especially in Brazil and Mexico. Petrobras and Pemex are investing in upgrading refining capacity to serve domestic fuel markets. The regional dependence on crude oil exports shapes VGO availability, with the volatility of global oil prices affecting market stability. Nevertheless, continuous investments in the upgrading of refining facilities and production efficiency are projected to consolidate the VGO supply chain in the region.

The Middle East & Africa region is endowed with enormous crude oil reserves, thus it is a major producer of VGO. Saudi Arabia and the UAE are increasing refining capacity, with firms like Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) investing in sophisticated processing units. Increasing demand for transportation fuels in Africa is also propelling market growth. Moreover, the rise in export-oriented refining projects makes the region a major participant in the international VGO trade.

Vacuum Gas Oil Key Market Players & Competitive Insights

The market for vacuum gas oil is very competitive, with the large players concentrating on refining technology and regulatory compliance. The leading players in the market are ExxonMobil, Shell, Chevron, TotalEnergies, Saudi Aramco, and Sinopec, which are using advanced technologies to improve the efficiency of VGO processing. Greater investments in low-sulfur VGO production and hydrocracking units are defining the competitive landscape. Besides, merger, collaboration, and refinery expansion are the principal strategies behind market growth amidst evolving fuel policies and energy use.

Neste

Neste is a Finnish refinery which manufactures Vacuum Gas Oil (VGO) in its portfolio of products that could be employed as a feedstock for diesel and gasoline manufacturing. Neste has a long tradition of its sustainable and innovation-based approach in refinery operations. Recent years have witnessed Neste promoting the expansion of renewable and circular solutions based on the convergence of advanced technologies aimed at making refining operations more efficient and environmentally sound.

LUKOIL

LUKOIL, the second-largest Russian energy firm, refines Vacuum Gas Oil (VGO) consumed by fluid catalytic cracking units in order to generate high-octane gasoline and other refined products. The company has been investigating strategic alternatives for its assets, such as selling its Bulgarian refinery to a Qatari-British consortium, reflecting a shift in the company's operational priority in the European market.

KazMunayGas

KazMunayGas, the national oil and gas company of Kazakhstan, supplies Vacuum Gas Oil (VGO) as a key feedstock for refining, enabling the manufacture of other petroleum products. The company is committed to modernizing its refining units to global standards and enhancing product quality, in line with global trends towards cleaner fuel production.

Vertex Refining

Vertex Refining specializes in re-refining waste motor oils and other petroleum products into high-quality Vacuum Gas Oil (VGO), which is used in the production of diesel and marine fuels. Vertex Refining emphasizes environmentally friendly practices by re-refining waste oils, thus conserving the environment. The recent developments include expanding their processing capacity to boost VGO production, keeping up with the rising demand for cleaner fuels.

Kuwait Petroleum Corporation (KPC)

Kuwait Petroleum Corporation (KPC) is a state-owned corporation that manufactures Vacuum Gas Oil (VGO) both for local consumption and export purposes, acting as a feedstock for numerous refining operations. The corporation is currently embarking on major projects aimed at modernizing its refining units to increase the efficiency of VGO production and meet the tight international environmental regulations, hence becoming more competitive in the global market.

Key companies in the vacuum gas oil market include:

• LUKOIL
• Kuwait Petroleum Corporation
• Honeywell International Inc
• Vertex Refining
• Husky Energy Inc.
• TAIF-NK
• KazMunayGas
• Axeon Specialty Products
• Neste
• Gazprom Neft
• Zhejiang Petrochemical Corporation
• S. Oil & Refining Co.
• Others

Vacuum Gas Oil Industry Developments

• Tembo Global Industries bagged a INR9.22 crore Engineering, Procurement, and Construction (EPC) order from Hindustan Rajasthan Refinery Ltd (HRRL) for piping work in the Vacuum Gas Oil (VGO) unit at the Pachpadra refinery in January 2024. The project, which is being carried out jointly with Tata Projects Ltd, is to increase the efficiency and reliability of the unit within six months.
• In January 2024, ExxonMobil increased its Beaumont plant in Texas, investing in higher gas oil production to address growing global demand. The firm highlighted that the expansion is in line with its sustainability goals while improving the efficiency of fuel manufacturing. This strategic expansion is likely to improve ExxonMobil's refining capacity and support a more stable supply of high-quality fuel products.
• Shell unveiled in December 2023 an investment plan to expand the VGO hydrocracking capacity of its Pernis refinery in the Netherlands. The expansion will enhance efficiency in the production of diesel and jet fuel from VGO, delivering a secure supply to the European market while expanding refining capacity.
• TotalEnergies signed a deal with a Middle Eastern supplier in November 2023, getting a firm supply of vacuum gas oil (VGO) to use in its Belgian and French refining facilities. The action represents an enhancement of the firm's refining efficiency by way of higher output of cleaner fuel. Having a steady supply of VGO, TotalEnergies aims at increasing the levels of operational stability and meet increased demand for cleaner fuel products.
• In September 2023, Indian private refiner Nayara Energy issued a scarce tender offering around 70,000 metric tons of vacuum gas oil (VGO) with a highest 3% sulfur level to load in September. The move was an unprecedented sale in the market that highlighted increased trading activity amidst shifting global refinery demands.
• Valero Energy Corporation, in August 2023, strategically invested in the upgrade of its United States refinery facilities with the aim of enhancing Vacuum Gas Oil (VGO) processing capacity. The action will assist in maximizing the cost of operation while increasing high-value fuel production such as diesel and gasoline. With increased VGO processing efficiency, Valero aims to enhance its market position as well as meet the increasing demand for refined petroleum products.
• Trafigura and Vitol purchased vacuum gas oil (VGO) cargoes from Indian refinery Nayara Energy in December 2022 at $10 to $15 per barrel premiums to Dubai crude prices. The cargoes were to lift from Vadinar port in December and were potentially destined for Europe or the U.S., reflecting India's increasing presence in the global VGO market.
• India increased its vacuum gas oil (VGO) shipments to the U.S. in November 2022 as Western nations sought alternatives to Russian oil supply. As the U.S. and Canada banned Russian crude imports, India filled the gap using its refining capabilities, benefiting from improved margins and shifting global trade patterns.
• Reliance Industries shipped 80,000 tonnes of vacuum gas oil (VGO) from its Jamnagar refinery to the U.S. aboard the Aframax ship Shanghai Dawn in October 2022. The cargo, which arrived in late October and early November, highlighted India's growing role as a top supplier of refinery feedstock that was filling U.S. requirements following sanctions on Russian oil.

Vacuum Gas Oil Market Segmentation

The report titled “Vacuum Gas Oil Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Vacuum Gas Oil Type Outlook

• Light Vacuum Gas Oil (LVGO)
• Heavy Vacuum Gas Oil (HVGO)

Vacuum Gas Oil Sulphur Content Outlook

• Low Sulfur Vacuum Gas Oil
• High Sulfur Vacuum Gas Oil

Vacuum Gas Oil Distribution Channel Outlook

• Gasoline Production
• Diesel Oil Production

Vacuum Gas Oil Regional Outlook

• North America
• United States of America
• Canada
• Europe
• United Kingdom
• Germany
• France
• Italy
• Others
• Asia Pacific
• China
• Japan
• India
• ASEAN
• Australia
• Others
• Latin America
• Brazil
• Argentina
• Mexico
• Others
• Middle East and Africa
• Saudi Arabia
• United Arab Emirates
• Nigeria
• South Africa
• Others