Saudi Aramco’s base oil subsidiary Luberef reported resilient financial results for 2025, supported by strong margins and disciplined cost management despite a planned refinery turnaround and a challenging global energy environment, the company said in its annual report published last week.
Luberef’s Growth II expansion project, currently under construction and expected to be completed in 2026, will allow the compnay to produce a full range of API Group I, II and III base oils, positioning it as the only producer in the region with a fully integrated base oil portfolio.
The company continues to shift toward higher-value products, particularly Group II and Group III base oils, which are experiencing global demand growth due to stricter environmental standards and increased requirements for fuel efficiency. In contrast, demand for Group I base oils is expected to decline over time.
The company recorded revenue of SAR 8.1 billion and net income of SAR 855 million, reflecting a year-on-year decline primarily due to lower production volumes during scheduled maintenance activities. According to the report, the turnaround was necessary to ensure long-term operational reliability and asset integrity.
Pre-tax earnings reached about SAR 1.1 billion, showing the strength of Luberef’s margin structure despite a roughly 15% drop in sales volumes. Improved base oil crack margins and effective commercial optimization helped offset the impact of reduced output.
Luberef is also strengthening its downstream and geographic footprint. The LubeHub initiative in Yanbu is attracting industrial partners and supporting localization of lubricant production, while expansion into African and GCC markets is helping diversify revenue streams.
Looking ahead, Luberef expects improved performance in 2026 as production normalizes following the turnaround and the Growth II project progresses toward completion. The company is positioning itself to capture long-term value from the global shift toward higher-quality and more sustainable base oils.