LUBREF Tadawul occupies a prominent position in the interests of investors and followers of the Saudi stock market, especially with the emergence of Saudi Arabian Lubricants Company (LUBREF) as a pillar of the national petrochemical sector. The keyword LUBREF Tadawul ranks among the top financial search terms in Saudi Arabia, highlighting the importance of this company as it represents the first Saudi facility specialized in the production of advanced base oils locally, supported by a strategic alliance between Saudi Aramco and Taiwanese CPC. Since the listing of LUBREF shares in the financial market under the symbol 2223, it has become a central topic for monitoring and analysis, due to its impacts on the energy sector and manufacturing industry, as well as its role in Vision 2030 for localizing industries. In this article, we will detail how LUBREF was established, its products, its market position evolution, and the most important financial and operational indicators of the stock, along with an in-depth analysis of the base oils sector and its main competitors both locally and globally. We will also review the latest news, cash distributions, the company's future plans, and many points of interest for investors or those interested in the Saudi industrial sector, while fully adhering to the Capital Market Authority's rules against providing direct investment recommendations or advice.
Definition of LUBREF in the Saudi Financial Market
Saudi Aramco Base Oils Company (LUBREF) was established in 2014 to be the first local entity specialized in producing Group II and III base oils with high purity. LUBREF is the result of a strategic partnership between oil giant Saudi Aramco (holding over 85%) and Taiwanese CPC (approximately 15%). The establishment of LUBREF was part of Aramco's plans to expand into manufacturing and petrochemicals, so that its operations are not limited to traditional oil exploration and production. The LUBREF complex is located in Yanbu Industrial City, which gives it a logistical advantage near ports and other industrial complexes. In 2022, the company's shares were listed in the Saudi financial market (Tadawul) under the symbol 2223 (LUBREF), allowing local and international investors to trade its shares. The company focuses on producing high-specification base oils to meet the increasing local and regional demand for automotive and industrial lubricants, alongside other derivatives such as low-sulfur diesel products.
Company Ownership and Governance
Saudi Aramco is the largest shareholder in LUBREF, controlling about 85% of the shares, while Taiwanese CPC holds the remaining stake. This alliance represents a model of cross-border industrial integration, combining local resources with international technical expertise. The company is organized as a Saudi joint-stock company with a capital of approximately 2.5 billion riyals distributed over listed shares, with a board of directors adhering to the highest standards of governance and transparency in accordance with the regulations of the Saudi Capital Market Authority. Since its inception, LUBREF has been keen to adopt sound governance policies, publishing periodic reports and committing to disclosing its financial and operational data, which enhances investor confidence and reflects its commitment to best corporate practices.
Products and Operational Activities
LUBREF's operations revolve around the production of Group II and III base oils, which are used as key raw materials in the production of high-quality engine oils and industrial lubricants. The plant relies on advanced refining technologies such as three-screw reactors to achieve high production efficiency and purity. In addition to base oils, the company produces other petroleum derivatives, such as ultra-low sulfur diesel (ULSD), which has become increasingly important in global markets for environmental and operational reasons. LUBREF benefits from its strategic location in Yanbu, close to Aramco refineries and the port network, facilitating product exports and quickly and effectively meeting local and Gulf market needs.
Listing of LUBREF Shares on Tadawul
LUBREF shares were listed in the Saudi financial market (Tadawul) under the symbol 2223 (LUBREF), becoming one of the most important stocks in the basic materials and petrochemicals sector. The listing followed an initial public offering that attracted interest from institutions and individual investors, thanks to the company's position in the Saudi energy system. The stock is now one of the leading stocks in the sector, providing investors with exposure to the advanced base oils industry that supports the automotive and manufacturing sectors in the Kingdom. Since its listing, the stock has seen active trading and fluctuations linked to the performance of the oil sector and the company's periodic financial announcements.
Financial and Operational Performance Development (2024-2025)
By the end of 2024, LUBREF reached its full design capacity with an annual production estimated at around 250,000 tons of base oils, alongside similar quantities of low-sulfur diesel. Data indicates that the company has successfully maintained high and stable operating ratios, despite fluctuations in global oil prices. LUBREF's revenues for 2024 were estimated in the hundreds of millions of riyals, supported by local and regional demand, with positive operating profits continuing until mid-2025. The stock price was around 98.80 riyals in January 2025, while the company's market capitalization was estimated at about 250 billion riyals based on the number of shares issued. The price-to-earnings (P/E) ratio ranged between 30 and 40 times according to market estimates, reflecting investors' expectations for profit growth in the base oils sector. The company also announced a cash dividend of 0.80 riyals per share for the first half of 2025, demonstrating its commitment to sharing profits with shareholders.
The Base Oils Sector and Its Importance to the Saudi Economy
The production of base oils is a pivotal part of Saudi Arabia's strategy to localize manufacturing industries and reduce reliance on imports. Before the establishment of LUBREF, the Kingdom was almost entirely dependent on importing these oils to meet the needs of the automotive and industrial sectors. With LUBREF's entry, it became possible to meet the majority of local demand and enhance exports, achieving the goal of Vision 2030 to increase the added value of national industries. The sector also supports related industries such as petrochemicals, transportation, and heavy industries, and enhances the integration of the industrial value chain in the Kingdom.
Market Competition Analysis Locally and Globally
LUBREF enjoys a clear competitive advantage in the Saudi market, as there is no other local product for base oils of the same size or technology. Globally, the company faces competition from industry giants such as Sinopec (China), ExxonMobil (USA), Shell (Netherlands/UK), SK Lubricants (South Korea), and others. Competition is more pronounced in Asian and European markets, but LUBREF benefits from its logistical proximity to Gulf markets and its partnerships with Aramco. Long-term sales agreements and flexible production lines also enhance the company's ability to maintain its market share and keep pace with technological developments in the industry.
Cash Distributions and Profit Policy
LUBREF is keen to distribute a portion of its profits periodically to shareholders. In the first half of 2025, the company announced a cash distribution of 0.80 riyals per share, equivalent to about 8% of the capital. This policy reflects the company's financial stability and its ability to generate strong cash flows from operational activities. The company is committed to announcing distributions in accordance with the regulations of the Capital Market Authority, and the stock is one of the preferred options for those seeking fixed income from energy sector stocks. However, distributions remain linked to market performance and economic factors affecting sector profitability.
Impact of Oil Price Fluctuations on LUBREF's Performance
LUBREF's financial results are significantly affected by fluctuations in global oil prices, as it relies on petroleum raw materials. Rising oil prices may lead to increased revenues from diesel and base oil products, but at the same time, it may raise operating costs. The company benefits from its long-term contracts with Aramco and some protection from excessive price fluctuations, but profit margins remain sensitive to global pressures. LUBREF management follows flexible policies to mitigate price risks by diversifying products and improving operational efficiency.
Latest News and Strategic Developments
In 2025, the land lease agreement for the Yanbu complex was renewed, enhancing the stability of the company's operations in the long term. The company also signed an agreement with Aramco to sell low-sulfur diesel, indicating diversification of income sources and integration of operations within the Aramco system. LUBREF has not announced major expansion plans until the end of 2025, but it focuses on developing Group III products and exploring export opportunities to regional markets. The company continues to update its infrastructure and increase production line efficiency to meet the growing demand for its products.
Future Prospects and Growth Plans
LUBREF aims to strengthen its position in the local and regional market through horizontal expansion in advanced base oil products. The company is exploring the potential to export its products to Gulf Cooperation Council countries and global markets, in addition to developing high-purity base oil production technologies. The company is expected to remain committed to its dividend policy and enhance its operations to create added value for shareholders. LUBREF is also keeping pace with environmental and regulatory changes in the global industry, focusing on sustainability and reducing emissions in its production processes.
LUBREF's Position within the Saudi Energy System
LUBREF represents a model of industrial integration within the Saudi energy system, contributing to maximizing the benefits of crude oil by converting it into value-added products. The company supports Aramco's plans to transition from a traditional oil company to an integrated industrial giant encompassing all stages of the value chain. LUBREF also contributes to supporting Saudi Arabia's goals of achieving regional leadership in manufacturing industries and reducing reliance on imports, positively impacting the national economy and providing job and training opportunities for the local workforce.
LUBREF's Role in Achieving Vision 2030
LUBREF plays a fundamental role in achieving the goals of Vision 2030 related to localizing petrochemical industries and diversifying national income sources. By producing base oils locally, the company contributes to reducing the import bill and increasing exports, while enhancing the integration of industrial supply chains. The company supports innovation and technology initiatives by adopting the latest production and control systems, and participates in social responsibility projects and environmental initiatives, enhancing the sustainability of the industrial sector in the Kingdom.
Conclusion
LUBREF stock (2223) listed in the Saudi financial market exemplifies the transformation of the Saudi economy towards advanced manufacturing industries and the integration of the industrial value chain. With the support of Saudi Aramco and its strategic plans, LUBREF has achieved a prestigious position in the base oils and petrochemicals sector, maintaining strong financial and operational performance, and its commitment to profit distribution. The company remains subject to the impacts of global oil prices, but its management follows flexible policies to address risks and achieve growth. It is worth noting that making any investment decision in LUBREF stock or others requires careful study and consultation with a licensed and accredited financial advisor, as investment conditions vary from person to person. The SIGMIX platform provides advanced analytical tools to help understand the Saudi financial markets more deeply and comprehensively.
Frequently Asked Questions
LUBREF is the Saudi base oils company and operates in the production of high-purity base oils (Group II and Group III), which are a key component in the production of lubricants for engines and industrial equipment. The company was established as part of a strategic alliance between Saudi Aramco and Taiwanese CPC to meet local and regional demand for advanced oils, and its facilities are located in Yanbu Industrial City.
You can monitor the performance of LUBREF stock through the official website of the Saudi financial market (Tadawul) under the symbol 2223. The platform provides real-time stock prices, financial data, company announcements, and periodic reports. You can also view analyses and charts through specialized financial sites like TradingView and Mubasher.
The largest shareholder in LUBREF is Saudi Aramco with about 85% of the shares, followed by Taiwanese CPC with approximately 15%. A portion of the shares was offered for public subscription in the financial market, allowing individual and institutional investors to enter the ownership structure.
LUBREF produces Group II and III base oils, which are used in automotive engine oils, industrial equipment, and transportation sectors. It also produces additional petroleum derivatives such as ultra-low sulfur diesel (ULSD), which is used to meet environmental requirements in the transportation and industrial sectors.
Yes, LUBREF generates positive operating profits and announces periodic dividends. In the first half of 2025, the board of directors decided to distribute 0.80 riyals per share, equivalent to about 8% of the capital for that period. The company is committed to regular disclosure of its distribution policies through official trading platforms.
LUBREF's profits and product prices are affected by fluctuations in global oil prices, as it primarily relies on petroleum inputs. Rising prices may increase revenues but raise operating costs, while declining prices may lead to reduced profit margins. The company's management focuses on long-term contracts and hedging to mitigate the impact of these fluctuations.
LUBREF focuses on developing advanced base oil products (Group III), exploring export opportunities to Gulf countries and global markets, and increasing production line efficiency. The company also seeks to enhance integration with Saudi Aramco and leverage its logistical position in Yanbu for sustainable long-term growth.
There is no direct local competitor of the same size and specialization as LUBREF in the production of advanced base oils, giving it a relative advantage in the Saudi market. Globally, it faces competition from major companies like Sinopec, ExxonMobil, Shell, and others, especially in foreign markets.
LUBREF plays an important role in achieving Vision 2030 goals by localizing base oil production, reducing reliance on imports, enhancing industrial supply chains, and increasing the contribution of manufacturing industries to Saudi GDP, supporting sustainable economic development.
You can follow the latest news of LUBREF through the official website of the Saudi financial market (Tadawul), in addition to economic press and specialized financial websites. The company also provides periodic reports and official announcements regarding distributions, new contracts, and operational developments through its digital platforms.
The price-to-earnings (P/E) ratio of LUBREF stock ranges between 30 and 40 times according to market estimates in 2025. This ratio reflects investors' expectations for the company's profit growth in the base oils sector in the future, considering the sector's sensitivity to fluctuations in global oil prices.