Luberef Targets Completion Of Yanbu Expansion In H2 2026

Saudi Aramco Base Oil, also known as Luberef, is targeting the second-half of 2026 for the start-up of expanded production capacity at its Yanbu base oils facility.

The expansion would add to a wave of new global base oils production capacity that has begun to come online since late last year, particularly across Asia.

Key Highlights

·         Another 30-day shutdown of the Yanbu plant is scheduled to take place in August to complete the expansion project.

·         The Yanbu plant resumed operations in early January following a 45-day shutdown that included some work linked to the expansion project.

·         Luberef’s base oils sales volume fell to 223,000 tonnes in the fourth quarter, down by 39% year on year, reflecting the impact of the shutdown.

·         Following completion of the expansion project, Luberef’s total base oils production capacity is expected to reach 1.53 million tonnes per year.

·         Luberef is targeting base oils sales of 1.25 million tonnes in 2026, with the domestic market accounting for around 30% of the total.

·         The volume would be up from 1.102 million tonnes in 2025 but still below 2024 levels of 1.295 million tonnes.

Market Repercussions

The planned completion of the expansion project in the second half of 2026, rather than earlier this year, could moderate the impact of a swathe of new supply entering the market.

A new Group II unit in Singapore started operations in the third quarter of last year, while additional capacity in India was completed late last year.

The planned plant-maintenance in Saudi Arabia in the third quarter would also cut supply during that period, cushioning the effects of the typical summer slowdown in demand.