Saudi Aramco Base Oils Company, commercially known as Luberef, holds a prominent position in the Saudi and global energy markets, being one of the largest suppliers of high-quality base oils in the world. Under the umbrella of the giant Saudi Aramco Group, and supported by strategic local and global partnerships such as with China's Sinopec, Luberef focuses on the production and distribution of base oils that are essential for the lubricant and industrial petroleum products industry. Since its inception, the company has been committed to meeting local and global demand, relying on Saudi oil resources and advanced technological capabilities. In the Saudi stock market, Luberef stands out under the symbol (2223) as one of the key players in the refining and petrochemical sector.
In this article, we detail the company's origins, ownership structure, financial performance indicators, growth strategies, and its impact on the sector both locally and globally. We also discuss the latest developments and financial news, review its competitive position, and analyze the impact of economic variables on its operations. This material aims to provide an in-depth understanding of Luberef for all those interested in the Saudi stock market, while reminding the importance of consulting a licensed financial specialist before making any investment decisions. You can always follow the official stock page at /stocks/2223/ to keep up with the latest updates about the stock.
Overview of Saudi Aramco Base Oils Company and Its Activities
Saudi Aramco Base Oils Company (Luberef) was established as a Saudi joint-stock company specialized in the production of base oils, which are a key component in the lubricant industry. Headquartered in Yanbu Industrial City, it has production facilities in Jubail and has been operating since 2000 following the launch of the Yanbu refinery project. The company relies on refining selected crude oil to produce base oils of global classification (Group II and Group III), allowing it to meet the needs of the automotive, heavy machinery, and high-tech industrial sectors.
Luberef is characterized by its institutional integration with Saudi Aramco and benefits from partnerships with global companies such as China's Sinopec. This integration provides it with a high competitive capacity in production and distribution, as well as access to a global marketing network through Aramco. The company is supervised by the Saudi Capital Market Authority and adheres to disclosure and transparency standards, applying international accounting standards in its financial reports.
Listing on the Saudi Stock Market and Ownership Structure
Luberef was listed on the Saudi stock market (Tadawul) in 2019 under the symbol (2223), allowing individual and institutional investors the opportunity to trade its shares. Major companies, including Saudi Aramco, which holds the largest share, along with strategic partners such as China's Sinopec and Poland's PKN Orlen, contribute to the company's ownership. This structure provides the company with administrative stability and growth strategies aligned with the broader objectives of the Aramco Group.
The company is managed according to the regulations of the Saudi Capital Market Authority and adheres to disclosure and transparency policies, enhancing investor confidence in its results and reports. The presence of international partners also opens avenues for Luberef to benefit from global expertise and foreign markets, reducing risks associated with local market fluctuations.
Recent Financial Performance Indicators of the Company
Recent financial indicators for Luberef show strong performance amid global economic recovery and rising demand for base oils. By the end of 2024, the stock price reached approximately 28.50 Saudi Riyals, with a market capitalization estimated at around 8.0 to 8.5 billion Riyals. The price-to-earnings (P/E) ratio ranged between 7 and 9, reflecting a moderate rate that indicates stable returns in the energy sector.
The dividend yield remains relatively low (around 1% or less), as the company focuses on reinvesting profits for expansion and increasing production capacity. In the third quarter of 2024, Luberef recorded a net profit of approximately 150 million Riyals with revenues of around 400 million Riyals, achieving an annual growth rate between 70% and 100%. This stable financial performance supports the company's market position and reflects the efficiency of its operational management.
The Base Oils and Refining Sector in Saudi Arabia
Luberef operates within the energy and petroleum refining sector, specifically in the manufacturing of base oils. This sector is a vital pillar of the Saudi economy, supporting manufacturing industries, automotive production, and industrial machinery. The produced base oils are used to manufacture lubricants, industrial greases, and gels, playing a crucial role in improving the efficiency and performance of machinery and vehicles.
This sector is affected by fluctuations in global oil prices and production policies such as OPEC+ agreements. There is also an increasing trend towards developing purer and more efficient oils to keep pace with modern engine developments and environmental standards. Luberef contributes to leading this sector through investments in research and development and the production of advanced base oils, giving it a competitive edge in both local and global markets.
Luberef's Competitive Position in the Local and Regional Market
Luberef enjoys a strong competitive advantage in the Saudi market due to its direct connection with Saudi Aramco and its ability to source high-quality raw materials at competitive costs. Despite the presence of local companies such as Ras Tanura Refinery (SASREF) and SABIC, Luberef excels in producing large quantities of pure base oils of both Group II and III, making it difficult for competitors to match.
On the regional and international competitive front, Luberef faces major companies like ExxonMobil, Shell, and Total, which have a presence in the Saudi market through partnerships or imports. However, vertical integration and logistical support from Aramco provide Luberef with advantages in cost and quality, along with the capability to export its products to markets in Asia and Europe through global marketing networks.
Luberef's Expansion and Investment Strategy
Luberef prioritizes expanding its production capacity and developing its products to meet global market demands. Its current strategies include developing new units to produce purer base oils (Group III) and expanding storage and packaging capabilities to support exports. The company also aims to deepen its partnerships with international distributors and enhance its digital supply chain to improve shipment tracking and operational efficiency.
These plans align with Saudi Vision 2030, which focuses on maximizing local content and diversifying national income sources. Additionally, the company's strong financial performance opens avenues for future investments, whether in developing new production units or entering strategic partnerships that enhance its global presence.
Risk Analysis and Challenges Facing Luberef
The base oils and refining sector faces several challenges, the most prominent being fluctuations in global oil prices, as rising prices positively impact company profit margins, while sharp declines can pressure profits. Luberef enjoys some protection from these fluctuations due to its integration with Aramco, but any significant changes in energy policies or global demand may reflect on its financial results.
The company also faces challenges related to the global shift towards electric vehicles and clean energy, as demand for traditional lubricants may decline in the long term. To mitigate this impact, Luberef focuses on diversifying its products and developing advanced, environmentally friendly oils, in addition to monitoring global trends in oil recycling and developing innovative solutions for modern industries.
Latest Developments and News About Luberef (2024-2025)
Luberef has witnessed several significant developments during 2024 and 2025. The company achieved strong financial results, as the mid-year data for 2024 showed notable profit growth, driven by rising oil prices and increased demand for base oils.
Strategically, Aramco announced its intention to expand its stakes in some joint ventures, which may include additional investments in Luberef facilities. The company also signed global marketing agreements to promote its new products (Aramco Dura, Prima, Ultra) in Asian and European markets and worked on developing an advanced digital supply chain.
All these developments enhance Luberef's position in the market and affirm its commitment to expansion and innovation, despite ongoing challenges related to energy market fluctuations and technological changes.
Impact of Financial Results on Stock Price and Market Performance
Luberef's positive financial results reflect stability in its stock price, which ranged between 28 and 30 Saudi Riyals by the end of 2024. The growth in profits and revenues has bolstered investor confidence, especially with the company's commitment to limited dividend distribution and focus on expansion.
The relatively low P/E ratio indicates the stock's attractiveness within the heavy energy sector, reflecting the market's caution towards refining companies compared to high-growth firms. Additionally, the stability of the dividend yield and the clarity of the operational strategy provide the stock with a strong position in the portfolios of investors seeking relative stability with future growth potential.
Effect of the Shift to Clean Energy and Electric Vehicles on Luberef
The energy sector is witnessing an increasing global shift towards electric vehicles and renewable energy, which may lead to a gradual decline in demand for traditional lubricants. However, demand remains strong in industrial, heavy, and agricultural sectors that rely on conventional engines.
Luberef responds to these changes by developing advanced, lower-emission, and more efficient oils, exploring recycling possibilities, and providing solutions for new markets. Moreover, product diversification and a focus on high quality give the company an opportunity to maintain its position even amidst upcoming shifts in the energy market.
Luberef's Role in Achieving Saudi Vision 2030
Luberef's strategy aligns with the goals of Saudi Vision 2030, which aims to diversify the Saudi economy and enhance local content in vital industries. By developing products, investing in modern technologies, and increasing exports, Luberef contributes to achieving the vision's objectives by supporting national industries and creating new job opportunities.
Furthermore, expanding into foreign markets and adopting global best practices in quality and management enhances the company's position as a key contributor to manufacturing and energy industries both within Saudi Arabia and abroad.
Conclusion
Saudi Aramco Base Oils Company (Luberef), listed on the Saudi stock market under the symbol (2223), is a key player in the base oils and refining sector both locally and globally. Thanks to its integration with Saudi Aramco, international partnerships, and ambitious expansion strategy, the company has maintained strong financial performance and sustainable revenue and profit growth in recent years. Despite challenges related to oil price fluctuations and technological shifts in the energy sector, Luberef continues to innovate and develop its products to meet the demands of modern markets.
It is important to note that all information provided aims to increase awareness and knowledge about the company and its stock in the Saudi financial market and does not constitute investment advice or a recommendation to buy or sell. Before making any financial decision, it is always advisable to consult a licensed financial advisor to ensure that investment options align with your personal goals. You can follow the latest developments of the stock through the SIGMIX platform or the official stock page at /stocks/2223/.
Frequently Asked Questions
Luberef specializes in producing base oils, which are the raw material for high-quality lubricant manufacturing. The company focuses on refining hydrocarbons to produce oils of Group II and III, thereby meeting the needs of the automotive, industrial, and heavy machinery sectors both locally and globally. Luberef benefits from Aramco's expertise and its international partnerships in developing competitive products that meet modern technical and environmental requirements.
Saudi Aramco holds the largest stake in Luberef, granting it administrative and strategic control. International partners such as China's Sinopec and Poland's PKN Orlen also participate in ownership. This structure enhances the company's stability and provides it with advanced resources and technical knowledge, while adhering to the disclosure and transparency standards established in the Saudi financial market.
Luberef's financial performance in 2024 and 2025 showed significant growth, driven by increased demand for base oils and rising oil prices. Net profit in the third quarter of 2024 was approximately 150 million Riyals, with revenues nearing 400 million Riyals, and an annual growth rate in profits ranging between 70% and 100%. This positive performance has bolstered investor confidence and reflected on the stock's stability in the market.
Luberef produces a variety of pure base oils (Group II and Group III) used in manufacturing lubricants, industrial greases, and machinery operation products. The company recently launched products under brands such as Aramco Dura, Prima, Ultra, and expanded its marketing reach to Asia and Europe, leveraging Aramco's global network.
Fluctuations in oil prices directly affect Luberef's profit margins, as rising prices lead to increased revenues and profits, while sharp declines may pressure financial performance. The company benefits from relative stability in raw material costs due to its integration with Aramco, but remains exposed to global market risks, thus focusing on production efficiency and product diversification.
Luberef aims to keep pace with global transformations by developing advanced, lower-emission, and more efficient oils, in addition to exploring recycling solutions and expanding their applications in various industrial sectors. The continued need for the company's products in heavy and agricultural industries provides it with an opportunity to maintain its growth despite gradual shifts in the energy market.
Luberef began distributing cash dividends after its listing on the stock market, but the percentage remains limited as the company focuses on reinvesting profits for expansion. The annual dividend yield is estimated at around 1% or less, with the potential for future increases as profits stabilize and production capacity grows according to board decisions.
Luberef's future plans include developing units for producing purer base oils (Group III), expanding storage and packaging capabilities to support exports, and enhancing international marketing partnerships. The company also targets investment in digital technologies to improve the supply chain, aligning with Saudi Vision 2030 to increase local content and diversify income sources.
Luberef faces local competition from companies such as Ras Tanura Refinery (SASREF) and SABIC, but this competition remains limited due to Luberef's superiority in producing large quantities of pure base oils. Internationally, it competes with major companies like ExxonMobil, Shell, and Total, but the integration with Aramco and logistical support provide it with advantages in cost and quality.
You can track the performance of Luberef's stock listed under the symbol (2223) through the Saudi Tadawul platform or via the official stock page at /stocks/2223/. These platforms provide updated data on stock price, financial performance reports, and the latest news and developments related to the company.