Luberef maintained expectations for steady base oils production and sales through the rest of 2026 despite geopolitical disruptions and volatile prices.
The refiner lowered its 2026 sales guidance after a six-week Yanbu shutdown delayed a return to normal operations earlier this year.
Luberef’s stable output contrasted with wider Middle East Group III supply disruptions that tightened global availability since late February.
Saudi Aramco Base Oil expected steady base oils production and sales through the rest of 2026 despite volatile prices and ongoing geopolitical disruptions, positioning the Saudi refiner as one of the few steady suppliers in an increasingly tight global base oils market.
The company, also known as Luberef, cut its forecast sales volume for 2026 to 1.15 million tonnes, from 1.25 million tonnes previously, mostly because its Yanbu plant required several weeks to resume normal operations in January following a six-week shutdown at the end of last year.
“The change in guidance was mainly driven by the events of the first quarter,” Luberef Investor Relations Manager Saleh Alghamdi said in the company’s earnings call. “We do not anticipate any change in the production going forward.”
Luberef’s expectation for steady output and sales contrasted with the disruption to shipments from the Middle East’s other base oils units since late-February that left the global market increasingly short of Group III base oils.
The company said it continued to sell all available production despite disruption to regional cargo flows and markedly higher base oils prices since early March.
“Whatever we are producing, we are selling,” Luberef Chief Financial Officer Saud Kamakhi said during the call. “The demands of our products are there. We at Luberef, especially in Q1, we didn’t see any pushback.”
Expansion plans
Luberef maintained its target for completing the expansion of its Yanbu base oils plant in the second half of the year, with the project 71% complete at the end of the first quarter.
It still planned a shutdown of the Yanbu plant in August as part of the expansion process before full completion. The timing could be adjusted if the recent surge in base oils prices continued.
Luberef’s first-quarter net profit rose by 16% year on year as higher margins for byproducts such as diesel offset weaker base oils sales volume and margins earlier in the year.
The dynamic reflected the faster response of byproduct prices to surging crude oil prices from early March, compared with the more delayed response time for base oils prices.