This study intends to unfurl the multiple facets of global vacuum gas oil market. The insights offered in the report aid in market growth examination during the forecast period.
Sustained Use in Diesel Production Augurs Well for Global Vacuum Gas Oil Market
The primary usage of vacuum gas oil, which increases demand for it in the vacuum gas oil market, is diesel production. For instance, in September 2022, China produced 17.15 million metric tonnes of diesel. China's domestic diesel production has significantly increased during the past year, going from 13.01 million metric tonnes in December 2020 to 16.86 million in December 2021. The increased investment in fluid catalytic cracking and hydrocracking processes research and development aids in raising production. Additionally, vacuum gas oil can help the demand for diesel, which is anticipated to drive the market growth rate, to recover. Due to increased demand in the marine sector, vacuum gas oil in bunker fuel witnessing increasing demand. Over the next two years, increased offshore exploration and marine traffic will be anticipated to grow the vacuum gas oil industry.
Global seaborne trade is expected to reach 11 billion tonnes in 2021, compared to only four billion tonnes of cargo shipped into ports worldwide in 1990. The industrial outlook is expected to improve due to the expanding demand for fossil fuels in many industries and the intensifying attempts to generate bulk oil and gas. Vacuum gas oil is used in diesel production, which is projected to increase the oil demand. The increased investment in fluid catalytic cracking and hydrocracking research and development helps these processes run more efficiently. Vacuum gas oil can therefore aid in reviving market demand for diesel. Additionally, it is anticipated that increased efforts to create bulk oil and gas production and the expanding demand for fossil fuels in many sectors will benefit the overall outlook of vacuum gas oil market. Fossil fuels provide 84% of the world's energy needs, with oil accounting for 33.05% of consumption in 2019 and natural gas and coal accounting for 24.2% and 27.3%, respectively.
Vacuum Gas Oil Market: COVID-19 Impact
The vacuum gas oil market was significantly impacted by the coronavirus's adverse consequences in 2020, which are already clearly visible globally. Following the COVID-19 virus outbreak in December 2019, the World Health Organization (WHO) proclaimed a public health emergency. Numerous people have died as a result of the disease's global spread to more than 100 countries. The financial sector, global manufacturing, tourism, exports, and imports have suffered significant losses. The world economy is currently experiencing increased downward pressure after previously showing signs of progress. The virus outbreak has already increased risks to the already sluggish growth of the global economy. According to numerous international organizations, the current status of the world economy is the most challenging since the financial crisis. Thus, the pandemic's import and export restrictions have significantly impacted vacuum gas oil since they have changed consumer demand and consumption patterns.
Rising Fossil Fuel Demand in a Variety of End-use Industries to Fuel Vacuum Gas Oil Market Expansion
The rise of the global vacuum gas oil market is predicted to be fueled by the rising demand for fossil fuels across various industries. The industry is expected to benefit from increased attempts to create a large oil and gas supply. The market serves primarily as an intermediate feedstock to increase refineries' gasoline and diesel output. The vacuum distillation column prepares the market using several techniques, such as hydrogenation and cracking. Therefore, employing vacuum gas oil in the manufacturing of diesel will probably increase the market's need for oil. Furthermore, the growing research and development spending on fluid catalytic cracking and hydrocracking also contributes to the method' great results. The market can help this industry's demand for diesel grow. Additionally, the rising automobile industry, the rising demand for luxury vehicles, and the rising consumer disposable income in both developed and developing nations contribute significantly to the market expansion. As a result, the global increase in demand for gasoline and diesel will fuel the expansion of the market.
Government Programmes and Expanded Research Efforts to Stimulate Vacuum Gas Oil Market Expansion
Utilizing fluid catalytic cracking and hydrocracking technologies, prominent vacuum gas oil market participants conduct considerable research and development work in partnership with government agencies. Additionally, end users benefit from technological developments that produce vacuum gas using various fossil fuels, opening up enormous prospects for market expansion. Furthermore, there is a rise in the production of vacuum gas oil on the market due to rising urbanization and rising disposable income of people worldwide. As a result, these elements will greatly impact how the vacuum gas oil industry develops.
Strict Regulations to Limit Vacuum Gas Oil Market Growth
Strict regulations on VGO composition and emission content set by international organizations act as the primary market limitation for vacuum gas oil. Vacuum gas oil's incompatibility with other fuels is anticipated to restrain the vacuum gas oil market growth during the anticipated time frame. The fluctuating costs of fossil fuels may also hinder the expansion of the global market for vacuum gas oil. Additionally, the toxicity brought on by the prolonged use of vacuum gas oil, such as stinging, irritation, redness, etc., are additional issues that could affect demand for vacuum gas oil in the market and slow the rate of market expansion. Furthermore, the severe requirements of international organizations regarding the composition of OGs and emission content are the primary constraint on the market for vacuum gas oil. Sulfur in OGVs used as marine fuels must adhere to tight regulations by the International Maritime Organization (IMO).
Light Oil Category to Dominate Vacuum Gas Oil Market Owing to Increase in Production of Gasoline, and Diesel
The light vacuum gas oil category dominated the vacuum gas oil market in 2021. A fluid cracker is used to process LVGO, which includes converting atmospheric diesel into high-octane gasoline and light fuel oils. This rising growth can be attributed to an increase in the production of gasoline and diesel by splitting light vacuum gas oil. Hydrocarbon usage is more continuous as LVGO is converted into light and middle distillation using hydrogen and compulsion. At the same time, a hydrocracking plant is used for HVGO to clean up contaminants and excess sulfur from the outflow of what consumes hydrogen. Thus, the heavy vacuum gas oil category is anticipated to grow significantly over the forecast period.
Gasoline Production Remains the Leading Segment in Vacuum Gas Oil Market
The gasoline production category held the largest market share, and it is anticipated that it will continue to rule the market during the forecast period. The rising demand for gasoline around the world is what is driving the worldwide vacuum gas oil market. Internal combustion engines of motorcycles, lorries, boats, and other transport vehicles are powered by gasoline, while highly refined gasoline can be used as aviation fuel. The gasoline demand will rise as the vehicle sector expands, benefiting the vacuum gas oil industry even more. The demand for luxury vehicles rises as consumer disposable income rises in developed and emerging countries. Consequently, the category of gasoline production has grown.
Asia Pacific Spearheads Vacuum Gas Oil Market, Shooting Automotive Sales Instrumental
Over the forecast period, it is anticipated that the Asia Pacific market will account for the largest revenue share. Important elements like the significant increase in automotive sales and the expanding demand for high-octane fuel in this area explain this. Additionally, the market here is anticipated to rise because of the strong demand for gasoline and diesel for automobiles, the availability of well-developed refining and cracking facilities, and significant investments in research and development. Additionally, it is projected that the Asia Pacific region's growing need for bunker fuel in developing nations like China, and India will drive the market. Vacuum gas oil market in this region is projected to be severely impacted by large unconventional reserve finds, including shale, along with massive E&P activity in bulk deposits.
North America vacuum gas oil market is anticipated to experience stable revenue growth throughout the forecast period due to the increase in the zone's need for high-octane fuel and the growing capacity of vehicles. The zone also has well-known cracking and filtering measures. The North American zone is causing rising demand for higher-octane gasoline. Additionally, highly developed provisions for cleaning and cracking direct the North American zone to impact the market in 2019. Additionally fueling the expansion are rising auto sales and advanced cracking and refining plants in the area. The oil demand is driven by rising urbanization and industrialization in these countries, which is assisting the worldwide vacuum gas oil business. Significant R&D spending combined with burgeoning gasoline and diesel demand for automobiles is expected to meet the needs of the North American region.
Global Vacuum Gas Oil Market: Competitive Landscape
In January 2020, after a production stoppage caused by the electrical power outage in late December 2020, Swedish refiner Preem AB, a fully owned subsidiary of Corral Petroleum Holdings AB, resumed the majority of operations at its refinery in Lysekil, running 228,900 barrels per day. Furthermore, as of January 15, the refinery had been restored to operating at nearly full capacity. Similarly, in January 2019, for fifty days, the Indian Oil Corporation Ltd. shut down the vacuum gas oil market hydrotreating unit at its Vadodara refinery to increase its capacity to 2.2 million mt/year, up 4.8 percent from the current capacity. The capacity of the company's continuous catalytic reformer was also going to be increased, going from its existing capacity of 580,000 mt/year to 780,000 mt/year.
A few of the players in the vacuum gas oil Market TAIF-NK, Kuwait Petroleum Corporation, Exxon Mobil Corporation., KazMunayGas, Axeon Specialty Products, U.S. Oil & Refining Co., Royal Dutch Shell, Zhejiang Petrochemical Corporation, Neste, Solis Oil, Vertex Energy Inc., and LUKOIL.
Regional Classification of Global Vacuum Gas Oil Market Can be Given as Below:
Middle East and Africa
*Regions and countries are subject to change based on data availability.
Key Elements Included In The Study: Global Vacuum Gas Oil Market
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