Idemitsu Kosan Co., Ltd. and Saudi Aramco signed a base oil supply agreement aimed at strengthening supply stability and commercial coordination.
Saudi Aramco has global base oil production operations, including Motiva Enterprises’ 2.02 million metric tons per year of API Group II capacity; Luberef’s two plants in Saudi Arabia, with 1.5 million t/y of Group I and II capacity; and S-Oil Corporation’s unit in Onsan, South Korea, with capacity of 2.12 million t/y. This network gives Idemitsu sourcing options across major production hubs and reduces exposure to regional disruptions, such as the current Iran–U.S./Israel tensions in the Middle East.
Tokyo-based Idemitsu said the framework will help build a more resilient and flexible base oil supply chain supporting its high-value lubricant portfolio. The agreement adds to an existing procurement relationship with Saudi Aramco.
Demand for premium lubricants in Japan is expected by market analysts to grow through the end of the decade as industries intensify environmental and energy-efficiency initiatives. Japan’s industrial lubricants market, for example, is projected to expand at about 3.7% annually between 2023 and 2030, reflecting rising demand for higher-performance formulations used in advanced manufacturing and energy-efficient equipment.
At the same time, overall lubricant volumes in the mature market are expected to remain flat or decline slightly, reinforcing the shift toward higher-value products rather than higher volumes.
Japan’s largest lubricant supplier by sales volume and among the world’s top ten producers, Idemitsu said the partnership will support further expansion of its lubricants business while contributing to industrial development in Japan and overseas.