In Brazil, the long-anticipated development of a major base oil anchor for South America has yet to materialize. Projects like Gaslub and other proposed expansions remain stalled, often due to bureaucratic delays and a sluggish privatization process. As a result, the country has not yet fulfilled its potential to become a regional production hub.

Mexico also holds considerable potential for base oil production but faces internal challenges. The state-owned company Pemex continues to dominate the industry, often acting as a bottleneck to progress. Facilities such as the Salamanca refinery have seen shrinking capacity and now operate on the brink of viability, highlighting the urgent need for reform or investment.

These examples underscore how, despite global trends toward capacity expansion and technological advancement, several key markets remain constrained by political, economic, or institutional barriers. The global base oil landscape is not only shaped by who has capacity, but also by why so many others still do not.

The world’s 10 largest base oil refineries account for about a quarter of the world’s production capacity. Six of them are located in South Korea and the United States. About three-quarters of their capacity is API Group II.

Largest Capacity Base Oil Refineries, 2025

The trend has been for plants to grow ever bigger. In 2005, one of the world’s largest was Baku, which 20 years ago produced 845,000 tons per year. bThis has since been eclipsed

Over the same period, numerous base oil refining units, especially Group I, have shut down across the world as global demand shifted and refineries were restructured or repurposed.

The majority of them were Group I units. While the grade still has a firm place in the finished lubricants market, it is slowly being pushed out by Group II base stocks, which can often be less expensive. This trend continued in 2023 when Eneos closed a Group I plant in Japan and Sapref shuttered a Group I facility in South Africa.

Refinery Openings and Closures, 2005-2025