The vacuum gas oil or VGO belongs to the petroleum hydrocarbon that belongs to the heavy distillate family. Vacuum gas oil is also referred to as cat feed because it is utilized as a feedstock to create gasoil, gasoline, and other by-products. VGO is one of the outputs in the vacuum distillation tower (along with the vacuum reside) and is the lighter material between them. The principal use for the vacuum gas oil is in the form of feed-in cracking units such as the fluid catalytic cracker or the hydrocracker. These cracking units upgrade the vacuum gas oil into the products having greater value, such as gasoline and diesel. If the vacuum gas oil is not upgraded, then it blends into residual fuel oil. Nevertheless, this is quite rare as the value of vacuum gas oil is much greater as a feed for the purpose of upgrading. Vacuum gas oil consists of hydrocarbon material, which is heavier than diesel. One drawback of vacuum gas oil is that it is not compatible with other fuels, that is, a ship taking in fuel with vacuum gas oil in one harbor may encounter issues with compatibility if it takes on bunker fuel with different components in the next harbor.
COVID-19 Impact Analysis
- The coronavirus's unfavorable global effects are already evident and had a big impact on the vacuum gas oil market in 2020.
- The World Health Organization (WHO) declared a public health emergency after the COVID-19 virus outbreak in December 2019. The disease has spread to over 100 nations and resulted in massive deaths globally. Exports & imports, global manufacturing, tourism, and financial sectors have all been heavily damaged.
- The downward pressure on the global economy, which had previously shown signs of improvement, has escalated once more. The outbreak of the virus has added danger factors to the international economy's already sluggish development. Many international groups have stated that the global economy is experiencing its most difficult moment since the financial crisis.
- Since the pandemic, the restriction of imports and exports has affected the vacuum gas oil to a great extent as consumers’ consumption and demand patterns are changing amidst the pandemic.
Top Impacting Factors
The growing need for fossil fuels across different sectors along with the increase in efforts to produce a bulk output of oil & gas is projected to positively affect the industry outlook. Vacuum gas oil (VGO) is predominantly used as an intermediate feedstock to escalate gasoline & diesel production from refineries. VGO is produced through a vacuum distillation column using different processes such as hydrogenation and cracking.
Market Trends
- Growing Use of Diesel Indirectly Boosts Market Growth
- The use of vacuum gas oil in the production of diesel is mostly to boost the demand for the oil in the market. The rise in the investment in research and the development in hydrocracking and the fluid catalytic cracking process help increase the good output from this process. Thus, vacuum gas oil can help to recover the demand for diesel in the market.
- Increase in Demand for Fossil Fuels across Various End-use Industries Boosts Market Growth
- The rise in demand for fossil fuels across various industries is expected to have a positive effect on the industry outlook, along with increasing efforts to generate a bulk supply of oil and gas. The vacuum gas oil is primarily used as an intermediate feedstock to increase gasoline and diesel output from the refineries. Using various processes such as hydrogenation and cracking, VGO is created through a vacuum distillation column. The utilization of vacuum gas oil in the manufacturing of diesel is expected to increase the need for oil in the market.
- Rise in Use of VGO to Supply Bunker Fuels Aids in Market Growth
- The demand for vacuum gas oil in bunker fuel increases due to its rise in demand in the marine market. Growth in sea trade and marine exploration is anticipated to augment the vacuum gas oil market in the next two years.
Key Benefits of Report
This study presents the analytical depiction of the vacuum gas oil industry along with the current trends and future estimations to determine the imminent investment pockets.
- The report presents information related to key drivers, restraints, and opportunities along with detailed analysis of the vacuum gas oil market share.
- The current market is quantitatively analyzed to highlight the vacuum gas oil market growth scenario.
- Porter’s five forces analysis illustrates the potency of buyers & suppliers in the market.
- The report provides a detailed vacuum gas oil market analysis based on competitive intensity and how the competition will take shape in the coming years.
Questions Answered in Vacuum Gas Oil Market Report
- Who are the leading market players active in the vacuum gas oil market?
- What current trends will influence the market in the next few years?
- What are the driving factors, restraints, and opportunities in the market?
- What future projections would help in taking further strategic steps?
Vacuum Gas Oil Market Report Highlights
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