Saudi base oil Luberef’s profit tripled in 2Q

Spanish Market: Oil products
03/08/26

Saudi-state controlled Aramco's base oil subsidiary Luberef nearly tripled its profit on the year in the second quarter of 2026 as a result of record high base oil margins.

The company posted a profit of 734mn Saudi riyals ($196mn) in the second quarter, up from SR245mn a year earlier. Revenue increased by 52pc to SR3.42bn from SR2.25bn in the same period.

In the first half of this year, profit rose by 112pc on year to SR992mn, from SR467mn a year earlier. Revenue rose by 27pc on year to SR5.58bn in first half, from SR4.38 in the previous year.

Second quarter sales volumes stood at 313,000t, marginally higher from year-earlier level, but the company's crack margin rose by 91pc to SR3,625/t, a record high.

Strong demand for Group II base oils in the second quarter supported the firm's profits. Supply of Group II grades partially compensated for the global shortage of Group III base oils, keeping Group II prices supported.

Middle Eastern Group III supply has been disrupted since the start of the US-Iran war at the end of February, leaving global buyers scrambling for volumes. Some blenders that do not require approvals, switched to using more Group II grades with similar viscosities as substitutes for Group III grades.

A planned maintenance at the Yanbu facility, originally schedule for August, has been postponed to October to allow the company to benefit from strong base oil margins. As a result, the Growth II expansion is now expected to come on stream in the first half of next year. Following the expansion, Luberef will have a Group III base oil nameplate capacity of 175,000t/yr.

Addressing concerns about the impact on exports amid current disruption along Bab el-Mandeb strait, the company said there are several alternatives, including re-routing cargoes through the Cape of Good Hope and increasing deliveries by trucks locally. It added that ships are still transiting through Bab el Mandeb and that Luberef's tankers continue to be nominated and accepted, although the company acknowledged that the situation is evolving. Yemen's Houthi militant group started a maritime blockade on Saudi vessels in the Red Sea on 20 July.

In the second quarter, Luberef also signed an agreement with Indian firm APAR Industries to supply base oils at the LubeHub Value Park in Yanbu Industrial City, supporting the local production of transformer and specialty oils.

By Chng Li Li

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03/08/26

Oil futures: WTI falls 5pc as US cancels Iran strikes

Houston, 3 August (Argus) — Benchmark WTI crude futures fell by more than 5pc today after President Donald Trump cancelled plans to launch a new US military assault on Iran and insisted that talks with Iran are ongoing, despite denials from Tehran. September Nymex WTI fell by $4.33/bl to $80.34/bl while October Ice Brent fell by $4.16/bl to $83.77/bl. The October Brent-October WTI spread widened by $2.61/bl to $5.87/bl. WTI at the Magellan East Houston terminal was discussed at a prompt 90¢-$1/bl premium bid-ask spread to the Cushing benchmark at 3pm ET, according to the Argus Crude Market Ticker , down slightly from Friday's $1.03/bl volume-weighted average premium. Trump on Sunday said he cancelled plans to launch a major new military assault on Iran, citing progress on a deal with Tehran. He told reporters that the talks would begin in earnest on Monday afternoon. But Iran's foreign ministry on Monday denied holding talks with the US, noting that, instead, Iran and Oman are negotiating over a safe shipping route through Hormuz. Pressed by reporters on Monday to explain the status of diplomacy with Iran, Trump said that the talks with Iran are in fact "going on right now" and added that "we are straight about it but they deny". Trump also suggested that the strait of Hormuz would reopen fully, perhaps as soon as Tuesday. Oil and gas exports through the strait have plummeted since the start of the US-Iran war on 28 February. The interim peace deal between the two sides in mid-June — which saw transits through the waterway briefly rise — collapsed in early July due to disagreements over control of the strait. This sparked weeks of military attacks by the US and Iran during which Iran and its proxies launched drone and missile attacks on oil infrastructure in neighbouring countries. Meanwhile, the Opec+ core group of seven countries agreed on Sunday to raise collective production targets by a further 188,000 b/d starting in September, completing — at least on paper — the phased unwinding of the 1.65mn b/d voluntary production cuts first announced in 2023. The seven countries participating in the voluntary cuts — Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman — reiterated their commitment to compensate for past overproduction. But quota increases over the past months have not translated into additional physical supply because of disruptions to exports resulting from the US-Iran conflict. Separately, Kazakhstan's energy ministry has denied media reports of a possible complete shutdown of the Caspian Pipeline Consortium (CPC) system. "This scenario is not being considered," it said in a 1 August statement. Loadings of light sour CPC Blend crude have been disrupted by drone attacks on tankers calling at the CPC terminal on Russia's Black Sea coast. At least eight tankers have been targeted by drones at or on route to the terminal since mid-July. Nymex RBOB fell by 25.49¢/USG to $2.9667/USG while Nymex ultra-low sulphur diesel fell by 24.43¢/USG to $3.8772/USG. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

WTI tumbles after US calls off new attacks

03/08/26

WTI tumbles after US calls off new attacks

Houston, 3 August (Argus) — Benchmark WTI crude futures were down by more than 6pc in morning trading today after US president Donald Trump cancelled plans to launch a new military assault on Iran and announced a new round of talks. September Nymex WTI was trading at about $79.30/bl at 10:30am ET, down from its $84.67/bl settle on 31 July. October Ice Brent futures were also down in early trading. Trump has been threatening an escalation in the Iran war in response to an apparent surprise attack on 28 July against US bases in the region. But progress on the "perimeters of a deal" prompted Iran and other Middle East countries to ask the US to hold off any attack to provide more time for negotiations, Trump said in a social media post on 1 August. "I have agreed, for the future benefit of the WORLD and, likewise, the survival of a successful and prosperous Iran, to cancel the attack, subject to being able to rapidly make a DEAL," Trump said. "The Country of Israel joins me in this commitment." Iran, meanwhile, has denied holding talks with the US. "We are not currently negotiating with the US," Iran's foreign ministry spokesman Esmail Baghaei said Monday. Baghaie said that Iran was currently holding bilateral negotiations with Oman to determine a safe shipping route through the strait of Hormuz. But he said these discussions themselves would not lead to a reopening of the strait. Oil and gas exports through the strait have plummeted since the start of the US-Iran war on 28 February. The interim peace deal between the two sides in mid-June — which saw transits through the waterway briefly rise — collapsed in early July due to disagreements over control of the strait. This sparked weeks of military attacks between the US and Iran, during which Iran and its proxies have launched drone and missile attacks on oil infrastructure in neighbouring countries. Meanwhile, the Opec+ core group of seven countries agreed on Sunday to raise collective production targets by a further 188,000 b/d starting in September, completing — at least on paper — the phased unwinding of the 1.65mn b/d voluntary production cuts first announced in 2023. The seven countries participating in the voluntary cuts — Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman — reiterated their commitment to compensate for past overproduction. But quota increases over the past months have not translated into additional physical supply because of disruptions to exports resulting from the conflict between the US and Iran. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Chevron expands base oils distribution network

03/08/26

Chevron expands base oils distribution network

London, 3 August (Argus) — Chevron will become the exclusive distributor of Group II base oils to US firm HF Sinclair Lubricants & Specialties in Canada from 1 May next year, as the companies adjust supply arrangements ahead of HF Sinclair's planned Ontario plant closure. The agreement follows HF Sinclair's decision to retire its 15,600 b/d Group II/III base oils unit in Ontario by 2027 . It was announced alongside a separate multi-year strategic agreement under which South Korea's SK Enmove will supply Group III base oils to HF Sinclair. Chevron said the Canadian distribution deal is part of a broader base oils network that will continue to include Renkert Oil as a distributor for selected products. Renkert will remain Chevron's distributor for Paralux and Paramount process oils in the US, Canada and Europe. It will also continue to distribute Nexbase Group III base oils in the US and Canada, and Chevron Group II base oils in the US outside HF Sinclair's exclusive territory. "Customers need more than high-quality products, they need confidence in their supply partner," Chevron Base Oils general manager Alicia Logan said. "By working with both HF Sinclair Lubricants & Specialties and Renkert Oil, we're building on each partner's unique strengths to deliver reliable supply, local expertise and the flexibility our customers need as markets continue to evolve." Chevron is one of the world's largest suppliers of Group II, Group II+ and Group III base oils. The company said it plans to introduce a Group III+ offering in early 2027. By Gabriella Twining Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Low Rhine levels tighten German oil product supply

03/08/26

Low Rhine levels tighten German oil product supply

Hamburg, 3 August (Argus) — Low water levels on the river Rhine are tightening oil product supply in western Germany by restricting barge deliveries from the Amsterdam-Rotterdam-Antwerp (ARA) hub and cutting off some inland tank farms. Water levels at the key bottleneck near Kaub fell below 0.3m last week. At this level, most barges cannot pass , limiting deliveries from ARA to tank farms along the Upper Rhine and the Main. Traders said last week that oil product supply along the Rhine had become scarce. Motor fuel supply is particularly tight. Germany is typically a net exporter of gasoline, but Rhine restrictions are also limiting movements of blending components needed for gasoline production. This is adding to pressure on finished product availability in inland markets. The restrictions are also creating a regional price split. Suppliers at the Miro consortium's 310,000 b/d Karlsruhe refinery in southwestern Germany are facing rising oversupply, because the refinery usually loads some product on barges for delivery either upstream to Switzerland or downstream towards ARA. Both routes are currently constrained. Sellers in western Germany are raising prices in response to scarce supply, while sellers around Karlsruhe are cutting prices to clear trapped volumes, widening regional price differentials within Germany. Heating oil demand remains subdued, limiting some of the wider impact. Traders reported almost 40pc fewer traded heating oil volumes in July than in June, after higher national prices curbed buying. Ice gasoil futures rose in early July following a flare-up in US-Iran hostilities. Despite weaker spot trade, privately owned heating oil tank fill levels have risen slightly. Stocks reached a national average of 46.8pc on 30 July, up by 2.3 percentage points from a historic low on 17 May, Argus MDX data show. Warm weather is reducing heating oil consumption, but households are still putting more product into tanks than they are withdrawing, allowing stocks to recover gradually. By Natalie Müller Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

HF Sinclair, SK Enmove partner on base oil supply

03/08/26

HF Sinclair, SK Enmove partner on base oil supply

Singapore, 3 August (Argus) — South Korean refiner SK Enmove and US energy company HF Sinclair's Lubricants and Specialties segment announced today strategic agreements to supply Group III base oils to North America. SK Enmove will deliver Group III base oils to HF Sinclair's Lubricants and Specialties segment under a multi-year arrangement, although volumes were not disclosed. HF Sinclair's Lubricants and Specialties segment will also be SK Enmove's exclusive distributor for its key markets in North America. SK Enmove operates as a company-in-company under SK On. The partnership aims to strengthen HF Sinclair's Lubricants and Specialties' supply chain resilience and drive SK Enmove's growth in the North American market, by leveraging the former's sales and logistics network and the latter's consistent supply of premium base oils. The partnership follows HF Sinclair's 28 July announcement of plans to separate its Lubricants and Specialties segment through the creation of an independent, publicly traded company. The company will also retire a substantial portion of its 15,600 b/d Group II/III base oil unit in Ontario, Canada by 2027, and tap on another global producer for Group II supplies. The plant closure is set to squeeze Group III supply availability in a region that is already reliant on overseas supply. According to Argus' base oil supply index, Group III accounted for only 4pc of the region's base oils nameplate production capacity in 2025. While several plants have sought to maximise Group III output, the region remains a net importer because of a significant yield drop resulting from more severe hydrocracking. But it will also coincide with the start-up of two new Group III plants in the US. Chevron is scheduled to start its Group III unit in Pascagoula, US from the fourth quarter of 2026. ExxonMobil's 400,000 t/yr Group III plant in Baytown, US, will begin production in 2028. By Tara Tang Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Saudi base oil Luberef’s profit tripled in 2Q

Related news posts

Oil futures: WTI falls 5pc as US cancels Iran strikes

Oil futures: WTI falls 5pc as US cancels Iran strikes

WTI tumbles after US calls off new attacks

WTI tumbles after US calls off new attacks

Chevron expands base oils distribution network

Chevron expands base oils distribution network

Low Rhine levels tighten German oil product supply

Low Rhine levels tighten German oil product supply

HF Sinclair, SK Enmove partner on base oil supply

HF Sinclair, SK Enmove partner on base oil supply

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