Chevron to produce Group III+ base oils in the U.S.
author: Ann
2025-04-01
Energy giant Chevron recently announced that its plant in Pascagoula, Mississippi, will start production of Group III+ base oil (NEXBASE 4 XP) in the fourth quarter of 2026, marking the company as the first company in North America to locally produce this grade of product. This move will break the monopoly of the global Group III+ market by Malaysia's Petronas and South Korea's SKEnmove, forming a three-legged competitive situation.
As global equipment manufacturers have higher requirements for lubricant performance, the demand for advanced lubricants that meet the latest engine certification standards has surged. Group III+ base oil has become a key raw material with its low viscosity and high stability. Alicia Logan, general manager of Chevron Base Oil, said that NEXBASE 4 XP will give priority to the core European market to help customers optimize supply chain costs and efficiency, and gradually achieve global coverage in the future.
This expansion is a strategic extension of Chevron's layout of the high-end lubricant market. In 2022, the company acquired the Group III business of Neste in Finland, and has acquired the annual production capacity of 250,000 tons of Porvoo Refinery in Finland and 180,000 tons of Sitra Refinery in Bahrain. The latter is operated through a joint venture with Bahrain National Petroleum Company. The new North American production capacity will enable its base oil product line to cover the entire series of Group II, II+ and III, further strengthening its voice in the global market.
Analysis pointed out that Chevron's localized production will directly challenge Petronas and SKEnmove's market share in North America, while alleviating the supply chain risks that previously relied on imports. As the global automotive and industrial sectors continue to grow in demand for environmentally friendly and efficient lubricants, competition in the high-end base oil market may promote technological innovation and cost optimization, ultimately benefiting end consumers.
As global equipment manufacturers have higher requirements for lubricant performance, the demand for advanced lubricants that meet the latest engine certification standards has surged. Group III+ base oil has become a key raw material with its low viscosity and high stability. Alicia Logan, general manager of Chevron Base Oil, said that NEXBASE 4 XP will give priority to the core European market to help customers optimize supply chain costs and efficiency, and gradually achieve global coverage in the future.
This expansion is a strategic extension of Chevron's layout of the high-end lubricant market. In 2022, the company acquired the Group III business of Neste in Finland, and has acquired the annual production capacity of 250,000 tons of Porvoo Refinery in Finland and 180,000 tons of Sitra Refinery in Bahrain. The latter is operated through a joint venture with Bahrain National Petroleum Company. The new North American production capacity will enable its base oil product line to cover the entire series of Group II, II+ and III, further strengthening its voice in the global market.
Analysis pointed out that Chevron's localized production will directly challenge Petronas and SKEnmove's market share in North America, while alleviating the supply chain risks that previously relied on imports. As the global automotive and industrial sectors continue to grow in demand for environmentally friendly and efficient lubricants, competition in the high-end base oil market may promote technological innovation and cost optimization, ultimately benefiting end consumers.
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