Vacuum Gas Oil Market Report 2026

The vacuum gas oil market size has grown strongly in recent years. It will grow from $461.73 billion in 2025 to $486.82 billion in 2026 at a compound annual growth rate (CAGR) of 5.4%. The growth in the historic period can be attributed to growth of gasoline and diesel demand, expansion of refining capacity, reliance on vgo as cracking feedstock, historical availability of high sulfur crude, development of vacuum distillation units.

The vacuum gas oil market size is expected to see strong growth in the next few years. It will grow to $627.12 billion in 2030 at a compound annual growth rate (CAGR) of 6.5%. The growth in the forecast period can be attributed to tightening fuel sulfur regulations, increasing refinery complexity, demand for higher distillate yields, optimization of heavy crude processing, investment in advanced upgrading units. Major trends in the forecast period include increasing use of vgo in fcc feedstock, rising demand for low sulfur vgo, growing processing of heavy vgo streams, expansion of hydrocracking capacity, increasing optimization of refinery feed blends.

The rising demand for fossil fuels is expected to drive the growth of the vacuum gas oil market in the future. Fossil fuels are hydrocarbon-containing materials formed naturally in the earth's crust from the remains of dead plants and animals, including coal, petroleum, natural gas, oil shale, bitumen, tar sands, and heavy oils. Co-processing bio-oil with vacuum gas oil introduces renewable carbon into fossil fuels and reduces the production costs of biofuels. For example, in August 2024, the Department of Climate Change, Energy, the Environment, and Water, an Australian government department, reported that energy consumption increased by 2% in 2022-23, reaching 5,882 petajoules, which is an increase of 117 petajoules. Therefore, the rising demand for fossil fuels is fueling the growth of the vacuum gas oil market.

Rising disposable income is expected to drive the growth of the vacuum gas oil market in the coming years. Disposable income is the total income an individual or household has available for spending and saving after taxes and other mandatory deductions. Changes in disposable income can influence overall energy consumption patterns, affecting the demand for refined products such as gasoline and diesel. For example, in 2023, Trading Economics, a U.S.-based economic indicator, reported that disposable income in Japan rose from 412.82 thousand JPY ($3,014.64) in March 2022 to 463.91 thousand JPY ($3,387.76) in February 2023. Consequently, rising disposable income is fueling demand in the vacuum gas oil market.

Leading companies in the vacuum gas oil (VGO) market are focusing on developing innovative solutions, such as advanced hydrocracking and hydrotreating refining units, to address the growing demand for low-sulfur fuels and high-value middle distillates driven by stricter environmental regulations and rising global energy needs. VGO hydrocracking and hydrotreating technologies involve refining heavy vacuum gas oil feedstocks under hydrogen and catalyst-enhanced conditions to remove impurities like sulfur and break down larger molecules into cleaner-burning fuels with improved yield and quality compared to conventional thermal cracking methods. For example, in July 2025, PJSC TATNEFT n.a. V.D. Shashin, a Russia-based integrated oil producer, commissioned a new hydrocracking unit at its TANECO refinery. This advanced processing facility converts vacuum gas oil into low-sulfur Euro-6 grade diesel and naphtha with higher efficiency and output. The unit includes a high-capacity VGO feed system processing approximately 1.2 million metric tons per year, enhanced hydrogen addition for sulfur removal, and automated controls to optimize throughput and ensure compliance with fuel specifications, supporting both regulatory adherence and improved refinery margins.

Major companies operating in the vacuum gas oil market are Kuwait Petroleum Corporation, Exxon Mobil Corporation, KazMunayGas, Par Pacific Holdings Inc., Shell Plc, Neste Oyj, Vertex Energy Inc., The PJSC Lukoil Oil Company, Honeywell International Inc., Zhejiang Petroleum and Chemical Co. Ltd., PJSC Gazprom, Cenovus Energy Inc., Marathon Oil Company, IRPC Public Company Limited, Chevron Corporation, China National Petroleum Corporation, Eni SpA, Indian Oil Corp. Ltd., Axeon Specialty Products, U.S. Oil & Refining Co., Tatneft, PJSC Rosneft Oil Company, PTT Public Company Limited, S-Oil Corporation, SK Innovation Co. Ltd., Thai Oil Public Company Limited, Valero Energy Corporation, Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited, Reliance Industries Limited, Abu Dhabi National Oil Company, Bahrain Petroleum Company (Bapco)

North America was the largest region in the vacuum gas oil market in 2025. Asia-Pacific is expected to be the fastest-growing region in the global vacuum gas oil market during the forecast period. The regions covered in the vacuum gas oil market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the vacuum gas oil market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The vacuum gas oil market consists of sales of medium vacuum gas oil (MVGO) and heavy atmospheric gas oil (HAGO). Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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