Very Low Sulfur Fuel Oil (VLSFO) Size, Share & Outlook to 2034

VERT LOW SULFUR FUEL OIL (VLSFO) MARKET OVERVIEW

The global Very Low Sulfur Fuel Oil (VLSFO) Market size was valued approximately USD 9.13 Billion in 2025 and will touch USD 13.44 Billion by 2034, growing at a compound annual growth rate (CAGR) of 3.94% from 2025 to 2034.

Very Low Sulfur Fuel Oil (VLSFO) is a type of marine fuel that contains a reduced sulfur content, typically below 0.5%. It was introduced to comply with international regulations aimed at reducing sulfur emissions from ships, particularly the 2020 IMO Sulphur Cap. VLSFO is used in large ships to meet these environmental standards while ensuring operational efficiency.

IMPACT OF KEY GLOBAL EVENTS

“The Rise of Artificial Intelligence and Automation in Shipping”

Advancements in artificial intelligence (AI) and automation technologies are reshaping the shipping industry. AI can optimize fuel consumption and improve operational efficiency, potentially reducing the demand for fuel like VLSFO. However, as automation increases, demand for more sophisticated fuel types could also grow, influencing VLSFO market trends.

LATEST TREND

”Increasing Demand for Compliance with IMO Regulations ”

As global shipping adheres to stricter environmental regulations, particularly the 2020 IMO Sulphur Cap, there has been a steady rise in demand for VLSFO. The regulation limits sulfur content in marine fuels to 0.5%, pushing shipping companies to adopt low-sulfur fuels like VLSFO to remain compliant. This has led to higher VLSFO consumption across international shipping routes.

VERT LOW SULFUR FUEL OIL (VLSFO) MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Heavy Fuel Oil and Light Fuel Oil.

Heavy Fuel Oil (HFO)

Heavy Fuel Oil (HFO) is a thick, sulfur-rich fuel mix made from leftover oil and other fuels. It's popular in big ship engines because it's cheap and plenty. But it's under fire from eco-rules. To meet new IMO 2020 rules, ships are blending HFO with cleaner stuff to reduce sulfur. The future of HFO is unsure, as ships might switch to cleaner options like LNG over time.

Light Fuel Oil (LFO)

Light Fuel Oil (LFO) is a cleaner, less gooey marine fuel than HFO. It has less sulfur and is often mixed to meet new sulfur limits. Smaller ships or those needing quick fuel burn like it better. LFO is pricier but cleaner and more efficient. Its market is growing in eco-strict areas, and it's part of the move to low-carbon fuels. But, the higher price is tough for some shipping firms.

By Application

Based on application, the global market can be categorized into Transportation, Petrochemical Industry, and Building Industry.

Transportation

In shipping, VLSFO fuels big boats like container ships and oil tankers. It keeps sulfur low to meet rules. Trade growth boosts its demand. But, there's pressure to try cleaner fuels. While VLSFO is popular now, its future is unsure as ships look at cleaner options. Overall, VLSFO will still be in high demand soon, especially by companies wanting to follow rules.

Petrochemical Industry

In the petrochemical world, VLSFO is used to make chemicals, plastics, and fuel plant operations. Refineries use it for energy and heat. Demand is steady because they need low-sulfur fuels. But, there's pressure to use cleaner fuels due to rules. The industry is changing, aiming for greener methods. As rules get stricter and new fuels come up, VLSFO's demand in this sector might grow slower in the future.

Building Industry

In the building world, VLSFO powers big heaters and generators for construction. It's used in places where cleaner fuels aren't common. Its use here is smaller compared to shipping or chemicals. But, it's still important in some areas lacking other energy options. As eco-worries rise and governments want cleaner energy, VLSFO use might drop, replaced by renewables or electricity. But, for now, it's key in certain spots with fewer choices.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

”Stringent Environmental Regulations”

One big reason for the VLSFO market growing is because of stricter environmental rules, especially the IMO 2020 Sulphur Cap. This rule says that marine fuels can't have more than 0.5% sulfur. So, the shipping industry has to use VLSFO to follow the rule. The world wants cleaner emissions, which has made low-sulfur fuels more popular. VLSFO is a good choice for many shipping companies because it helps them meet the new standards without costing too much more.

Restraining Factor

”High Price Volatility ”

One big problem for the VLSFO market is its price going up and down a lot. This happens because of changes in crude oil prices, refining costs, and supply and demand around the world. Since shipping really needs VLSFO, any big change in crude oil prices or supply chain issues can make fuel costs skyrocket. Shipping companies, especially those with fixed budgets, might have a hard time dealing with these price changes, which could affect how affordable VLSFO is in the long run. This price uncertainty causes financial worries for operators and slows down market growth.

Opportunity

”Expansion of Alternative Fuel Infrastructure”

As the maritime industry goes greener, VLSFO has more chances in markets where other clean fuels aren't fully set up yet. If LNG, biofuels, or hydrogen aren't widely available, shipping companies still choose VLSFO to meet sulfur rules. As cleaner fuels gain popularity, VLSFO can be a temporary fix until those fuels' infrastructure is ready. So, VLSFO will still be important in the near future, especially in emerging markets where green fuel networks aren't as developed.

Challenge

”High Production Costs ”

One big challenge in the VLSFO market is that it costs more to make than other fuels. VLSFO is made by mixing different fuels to meet sulfur rules, which takes extra steps. This makes it harder and more expensive for refineries to produce, and they pass that cost to shipping companies. If a shipping company has a tight budget, the higher cost of VLSFO can hurt their profits, especially in places where cheaper fuels are more popular. These high costs might make some companies not want to use VLSFO if cheaper alternatives or mixing options come along.

VERT LOW SULFUR FUEL OIL (VLSFO) MARKET REGIONAL INSIGHTS

North America

North America's big shipping industry, with major ports like Los Angeles, New York, Houston, and Vancouver, drives the VLSFO market there. Because of the IMO 2020 sulfur rules, ships in North American waters need VLSFO. North America also has good refineries that make high-quality VLSFO. But, the market has issues like price swings and competition from fuels like LNG. As people look for cleaner energy and care more about sustainability, the demand for greener fuels might grow. Even so, VLSFO is still important for meeting the region's rules.

Europe

Europe is really advanced when it comes to VLSFO in shipping. Because of tough environmental rules like the ETS and IMO 2020 sulfur cap, VLSFO is very popular there. Big ports like Rotterdam, Antwerp, and Hamburg are big suppliers. Shipping companies like VLSFO because it’s cheap and meets the rules. But, there’s also a big push for cleaner fuels like LNG, biofuels, and hydrogen. Still, VLSFO is in high demand now because it’s affordable and easy to get, while Europe keeps working on greener options.

Asia

Asia has an important position in the VLSFO market due to its large shipping and major ports. With so much shipping, a lot of VLSFO is needed. The International Maritime Organization's 2020 Sulphur Regulation has boosted the popularity of VLSFO. However, because rules vary from country to country, some rules are poorly enforced. While VLSFO is common, cleaner fuels such as liquefied natural gas and biofuels are gaining popularity in environmentally conscious countries. Cost is important, so Asian shipping companies often opt for the cheaper VLSFO. Despite these problems, Asia's shipping industry is large and has stricter rules.

KEY INDUSTRY PLAYERS

”Key Industry Players Drives Competition through Their Role in Fuel Production, Distribution and Demand”

VLSFO market competitors include fuel suppliers, refiners, shipping companies and fuel operators. Refineries blend fuel to meet sulphur rules, competing on quality, price and reliability. Fuel operators obtain VLSFO from refineries and sell it to ships, competing on service and price. Shipping companies buy VLSFO for regulatory and cost reasons, which affects prices. Overall, competition is influenced by oil prices, fuel availability and the push towards cleaner fuels.

List of Top Very Low Sulfur Fuel Oil (VLSFO) Market Companies

Exxon Mobil

Shell

China Marine Bunker (Petro China) Co., Ltd.

World Kinect Corporation

KEY INDUSTRY DEVELOPMENTS

In December 2024, HD Hyundai Oilbank Co., with Aramco's backing, initiated bio very low sulfur fuel oil (VLSFO) deliveries to Yang Ming Marine Transport in Taiwan. This marked the first bio VLSFO export from a South Korean firm to an international client. The company produced the bio VLSFO using base fuel containing 0.5% or less sulfur content.

November 2024: One industrial development in the Very Low Sulfur Fuel Oil (VLSFO) Market is announced by BP Marine. They launched a new advanced Very Low Sulfur Fuel Oil (VLSFO) product, which integrates biofuel mixes to satisfy both sulfur limitations set by IMO 2020 and growing need for environmentally friendly marine fuels. This evolution shows BP's dedication to cutting emissions in the shipping sector while maintaining fuel efficiency. Including major world ports like Rotterdam and Singapore in their distribution network helps the company to offer the new VLSFO blend readily everywhere. This shift corresponds with the industry focus on decarbonization and offering green alternatives to normal marine fuels.

In July 2023, BP Marine, operating under bp's trading and shipping division, established a new agreement with StraitNZ to deliver marine biofuels in Wellington port. The company planned to introduce bio-VLSFO fuel delivery through barges in early 2024. The new fuel combines 24% UCOME with VLSFO. The International Sustainability & Carbon Certification System has certified the UCOME portion of this blend.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The VLSFO market is booming because of international sulfur rules, especially the IMO 2020 Sulphur Cap. It says marine fuel sulfur must be under 0.5%. So, VLSFO is now a popular choice for shipping. It's a cheap way to meet the rules and keep ships running smoothly. The market's stable as big ships and those in strict - environment areas keep the demand up. But, changes in oil prices and supply chain issues make VLSFO prices jump around, which messes with the market.

Looking ahead, the VLSFO market might face more competition from other low-carbon fuels like LNG, biofuels, and hydrogen. These are becoming popular as people try to reduce carbon in the shipping industry. Also, new technologies that make ships more fuel-efficient and reduce emissions could affect how much VLSFO is needed. While VLSFO will probably still be a big fuel choice for a while, its future depends on how quickly cleaner energy and stricter environmental rules are adopted. The market will keep changing, focusing more on sustainability. Over the next few decades, we might slowly see a move to greener options.

In the future, the VLSFO market could face tough competition from low-carbon fuels such as LNG, biofuels, and hydrogen. These are getting more popular because the shipping industry wants to cut down on carbon emissions. Also, new tech that makes ships use less fuel and emit fewer pollutants could reduce the need for VLSFO. Even though VLSFO will probably still be used a lot for some time, its future depends on how fast cleaner energy sources are used and how soon stricter rules come in. The market will keep changing, with more focus on being sustainable. Over the next few decades, it might gradually shift towards these greener fuel options.