Luberef CEO says crack margins fell nearly 30% in 2024

Samer Al-Hokail President and CEO at Saudi Aramco Base Oil Co. (Luberef)

Samer Al-Hokail, President and CEO of Saudi Aramco Base Oil Co. (Luberef), said that crack margins (base oil and feedstock) dropped by $100, or 30% year-on-year (YoY), in 2024.

The company recorded historical sales of nearly 1.29 million metric tons of products in 2024, the highest ever since its inception, Al-Hokail said, affirming Luberef’s financial strength enables growth.

In an interview with Al Arabiya TV, the CEO said that the increase in sales was the result of demand growth in key markets and expansion into new ones. He added that the company sold products in Argentina, the US, Europe and the Middle East.

Al-Hokail highlighted the promising Saudi market in light of the existing and future mega projects of Vision 2030 that rely on base oils.

Al-Hokail said the Yanbu project coincides with scheduled periodic maintenance at the end of the year, with maintenance and installation of the project performed simultaneously. The operation will start in early 2026, increasing the company's production from 15% to 20% to make.

Luberef the sole producer of the three categories of base oils in the Middle East.

He revealed that the company is studying the creation of a new fourth category of high-quality products that will support the automotive and heavy equipment oil market, noting that this project will take two to three years to kick off.

When asked about his expectations for the company's profit and dividends in 2025, the CEO said that this is linked to the market and crack margins, as well as their stability. He stated that the company has periodic maintenance scheduled by year-end for about a month, which may affect crack margins due to the suspension of production.

“However, the company's large production during the first eight months will absorb this impact,” he said.

According to Argaam’s data, Luberef reported a 36% decline in net profit to SAR 972 million in 2024, compared to SAR 1.5 billion in the prior year. Q4 net profit was down 23% YoY to SAR 208.2 million.