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Saudi Aramco Base Oil Company - Luberef
Luberef takes crude oil leftovers and turns them into high-quality base oils and other specialty products used to make engine lubricants.
Luberef is the company that makes the raw material inside your engine oil. It takes the heavy, leftover portions of crude oil that refineries don't want and upgrades them into base oils—the clear, syrupy stuff that makes up most of a bottle of motor oil. Those base oils then get sold to blenders, who add detergents and other chemicals to create the finished oil you pour into your car.
The business has two main parts. The bigger one is base oils, where Luberef is one of the largest producers in the Middle East and a major global exporter. The smaller part is specialty products like asphalt, marine fuel, and other industrial leftovers. Its main shareholder is Saudi Aramco, which owns the majority stake and supplies the crude feedstock, while Jadwa Industrial Investment holds a minority. That relationship matters: Aramco feeds it raw material, and Luberef's plants in Yanbu and Jubail do the chemistry. What makes Luberef interesting is that base oil is a genuinely hard product to make well. The highest-quality grades—Group II and Group III—require sophisticated hydroprocessing to strip out sulfur and impurities. Not every refinery can do it, and demand for these cleaner grades keeps rising as engine makers and regulators push for better lubricants. Luberef has invested heavily in upgrading its plants to produce more of these premium grades, which carry better margins than the older, dirtier Group I stuff.
The catch is that this is still a commodity business tied to oil prices and refining spreads. When crude is cheap and base oil prices are strong, Luberef prints money. When the gap between feedstock cost and product price narrows, profits shrink fast. It listed on the Saudi exchange in late 2022, and it returns much of its cash to shareholders through dividends. In short: a steady, dividend-paying chemical converter whose fortunes rise and fall with the oil refining cycle.
Saved answer · last researched 9 Nov 2026
BIG PICTURE
Luberef sells 70% of its base oil close to home, keeping exports at 30%
- 70% Sales kept in Saudi Arabia and nearby region
- 30% Sales exported, mainly to the Far East and Arabian Gulf
Luberef kept its usual split of 70% local sales and 30% exports in the second quarter of 2026, according to its chief financial officer. Local demand has a cap, so the company fills that bucket first and ships the rest to the Far East and the Arabian Gulf. Those export routes now run around Africa through the Cape of Good Hope, adding 45 to 60 days to each trip. Source: Yahoo Finance, Q2 2026 earnings call highlights, data from 2026
Timeline
A Refinery to Make Base Oil
In the mid-1970s, Saudi Arabia wanted to do more with its oil than just pump it out of the ground. So the national oil group Petromin teamed up with Mobil, an American oil giant, to build a refinery in Jeddah that would make base oil — the plain, clear stuff you blend with additives to create engine oil. Petromin held most of the company and Mobil held the rest, and the plant started producing.
Aramco Takes the Majority Stake
Twenty years later, Petromin handed its big majority stake to Saudi Aramco, the state oil company. It was a quiet ownership shuffle, but it mattered: from then on Aramco, not a government ministry, controlled the company's fate. Two years later the company took the name it still uses, Luberef.
Jadwa Buys Mobil's Share
In 2007, Mobil sold its minority stake to Jadwa, a Saudi investment firm. So the table now had two very different owners: Aramco, a giant oil producer, and Jadwa, a financial investor with an eye on eventually cashing out.
The Yanbu Upgrade
Luberef finished a big expansion at its Yanbu plant that let it make a higher grade of base oil, called Group II. This was the moment the company started climbing the quality ladder — moving away from basic oil toward the more valuable stuff that modern engines demand.
The Base Oil Alliance
Aramco pulled Luberef into a club with two of its other refining companies, S-oil and Motiva, and let it carry the Aramco name. The point was simple: together the group could bring in the top-tier Group III oils Luberef didn't make and reach customers around the world. Luberef was no longer a lone refinery.
Luberef Goes Public
Luberef sold a third of itself on the Saudi stock exchange at a price that valued the whole company at roughly 16.7 billion riyals, with buyers lining up to get in. Aramco kept its 70 percent; Jadwa sold its stake and got its exit. The oversubscription suggested investors were hungry for the shares.
A Cold First Day of Trading
Then the stock actually started trading, and it fell. It dropped as much as 6.6 percent on day one, a weak debut at a time when other Gulf listings were popping. The lukewarm reception, despite all that demand, was an early hint that the market's mood could turn on this company fast.
A New Chief Executive
Samer Al-Hokail took over as President and CEO, replacing Tareq Al-Nuaim. He arrived from decades inside Saudi Aramco, including running its overseas subsidiaries — a sign the parent was sending in a seasoned hand as the company pushed to grow.
More Feedstock at Yanbu
Luberef reworked its supply deal with Aramco to get more of the raw feedstock it needs at Yanbu. The extra supply was expected to add around 90 thousand tonnes of base oil a year — a small but meaningful bump in output without building anything new.
The Big Shutdown and a Stubborn Plant
Luberef ran the largest maintenance shutdown in its history at Yanbu, and it hurt: 2025 profit fell about 12 percent as volumes dropped, even though the margins on each barrel rose. Meanwhile the next big expansion, Growth II, was well underway and aiming to make the full range of base oil grades. And in a twist, a new feedstock deal kept the aging Jeddah plant alive until 2030, scrapping earlier plans to shut it down.
The Stock Falls Below Its IPO Price
The shares slid to their lowest level since listing, dropping below the price investors paid on day one. The reason was plain: first-half profit had more than halved as the margins on refining base oil got squeezed. The business was fine; the market for its product was not.
A New Chairman Steps In
Yasser Mufti, a senior Aramco executive with deep experience in refining deals, became Chairman after Ibrahim Al-Buainain stepped down for personal reasons. With the company chasing capacity expansion, having a deal-savvy chairman at the top made sense.
A Record Year and a Change of Plans
Then the wheel turned. Margins on base oil jumped, and third-quarter profit nearly doubled; by nine months, profit had more than doubled to a record. So Luberef did something clever — it pushed its big Growth II shutdown into 2027 to keep producing while prices were high, and locked in a ten-year feedstock deal for Jeddah. The plant that was once slated to close now had a future.