Vertex Energy said its Mobile, Alabama hydrocracker is now producing VTX-R4, a 4-centistoke API Group III rerefined base oil. The unit is a third component in the company’s integrated collection, processing and refining chain, allowing the company to cater to domestic and international lubricant markets from its Gulf Coast location and existing logistics infrastructure.
Kline & Co. forecasts that rerefined base oil capacity is expected to increase to 5.2 million metric tons by 2028. Group III capacity has seen growth particularly in the U.S. and Asia. These include ExxonMobil’s expansion in Baytown, Texas, HD Hyundai Shell starting commercial production by 2027 and HPCL in India increasing its Group II+ and III base oil capacity by 2027-2028.
Once collected, waste oil feedstock is processed into vacuum gas oil at Vertex’s Marrero, Louisiana refinery and converted into base oil at the new plant in Mobile.
“With growing acceptance for RRBOs by various industry stakeholders, from addocs to key players increasingly vocal in industry forums and OEM products formulated explicitly with RRBO, the market has an appetite for rerefined Group III,” Anuj Kumar, Kline’s industry manager in the energy division, told Lube Report.
Broadly, new capacities in the U.S. are being set up with the region’s substantial Group III deficit, Kumar said.
“One can argue that the Group III market is behaving the same way the Group II market did in 2010-2015. The Group II market was growing and at some point there were gaps in certain pockets,” said Kumar. “Everyone thought of taking an advantage of this gap and we know where Group II capacity is currently.”
Vertex said its terminal network in Mobile and Cincinnati, Ohio will support distribution of both rerefined base oil and conventional fuels. With the Group III product now online, Vertex is poised to increase its footprint in the rerefined base-oil segment and offer a domestically sourced alternative for lubricant formulators responding to shifting base-stock demand globally.
Vertex has been involved in a long-running legal dispute with Penthol, which in 2016 appointed Vertex as its exclusive North American sales representative for ADbase, a Group III base oil. Vertex first sued Penthol in late 2020 over the agreement and Penthol filed its own federal suit in early 2021 alleging breach of contract, business disparagement and misappropriation of trade secrets.
A federal district court ultimately rejected Penthol’s key claims and awarded Vertex about US$1.4 million for unpaid commissions and performance incentives tied to the termination of the agreement. In August 2025, the U.S. Court of Appeals for the Fifth Circuit upheld the lower court’s view that the contract had been mutually terminated rather than repudiated, affirmed the damages award and sent the issue of attorneys’ fees back to the district court for further consideration.