Luberef, Saudi Aramco’s in-country base oil refiner, saw sales fall in the first half of 2025, company executives said during an earnings call on Monday. Base oil sales fell 4.4% to 580,000 metric tons in H1 2025 from 607,000 tons in the same period of 2024.
The company is expanding its base oil plant in Yanbu from 1.1 million t/y to 1.3 million t/year, aiming to complete the project by the end of this year. Further expansion is planned by 2027.
A planned turnaround, an unplanned shutdown and a catalyst replacement means expectations have shifted to output of 1.05 million tons in 2025, down from 1.2 million tons as previously targeted.
“Yanbu is still facing minor difficulties, due to which we have revised our guidance for the rest of the year,” said Saud Kamakhi, the company’s CFO. “The Jeddah refinery is back on track.”
There was no mention of closing down Jeddah, which was mooted at the start of the year.
Crack margins had improved over H1 2024, up 6% to U.S.$487 per metric ton from $458.
Aramco’s majority-owned subsidiary, S-Oil, reported a second quarter rebound for its base oils and lubricants business, thanks partly to improved base oil margins. The company, one of the largest refiners in South Korea, said its base oil and lubricant business had operating income of ₩131.8 billion ($95.5 million) for the three months ended June 30, up 20% from ₩109.7 billion in the same period last year.
S-Oil said the spread for its base oil composite over vacuum gasoil rose to $50.5 per barrel in the second quarter, which it described as a historical average level, after sinking to $43.58/bbl in the first quarter. It expects base oil fundamentals to remain at normal levels in the third quarter, though it warned that, “Geopolitical risks may heighten the volatility of feedstock price and product spread.”