Thought Leadership Report

Can Re-Refined Base Oils reinforce Global Lubricant Supply Security amid the Middle East Crisis?

Re-refined base oils can add a local layer of supply as the industry deals with one of its biggest base-oil shocks.

The Middle East Crisis Exposed Base-Oil Risk: Re-Refined Base Oils Can Add a Local Layer of Resilience

The 2026 Middle East crisis showed how one regional base-oil shock can affect lubricant availability, prices and formulation choices worldwide. Re-refined base oils (RRBO) are now seen as a supply-security lever as well as a sustainability play.

Report Overview

When Pearl GTL went offline and shipping through Hormuz was disrupted, European Group III supply fell by 50% in a month and prices rose about 160%. The Middle East Gulf supplied about 62% of Europe's Group III imports in 2025. This white paper looks at whether RRBO can help strengthen global lubricant supply security. It covers regional readiness, the applications where RRBO can be used, the main constraints and a framework for choosing between buying, partnering and building.

Key Insights

Exposure

Group III base oils and Europe are the most exposed, because supply comes from a few large plants, routes are long and switching requires approvals. Pearl GTL has only partly restarted, so logistics and inventory are now the main bottlenecks.

Adoption

RRBO has moved beyond pilot use. Castrol raised RRBO use from 0.1% to 5.5% between 2019 and 2025, and TotalEnergies has OEM approvals for RRBO-based engine oils.

Capacity

Global RRBO capacity is expected to grow by about 33% between 2020 and 2030. Even so, it is still a small pool: about 3.3 MMT, compared with roughly 39.2 MMT of global lubricant demand.

Applications

Hydraulic and industrial oils are the easiest places to start using RRBO in the near term. Passenger car, heavy-duty and marine oils can follow selectively, as approvals and qualification allow.

Constraints

Collection quality is the biggest constraint on the supply side, and qualification is the biggest one on the demand side. Supply security depends on the whole loop working, not only the re-refinery.

Regional Priorities

Europe and North America are strategic priorities. South and Southeast Asia should diversify first and build collection, while the Middle East should monitor the market and use RRBO selectively.

RRBO will not replace virgin base oils, but it can add a dependable local layer of supply once feedstock, quality and approvals are in place. Lubricant companies should protect their critical grades now and build their RRBO capability in parallel. They should scale only once feedstock, consistent output, offtake and economics are all proven. The companies that act early will be in a better position when the next disruption comes.

About the Authors

Shefali Katyal

Senior Consultant,

Energy and Lubricants

Jayanth Joshua

Senior Analyst,