Luberef (LUBEREF AB): Buy: Still exceptionally strong spreads

Research evidence excerpt

Luberef (LUBEREF AB): Buy: Still exceptionally strong spreads

Equities ● Oil & Gas

9 July 2026

It remains unclear whether Luberef has been able to fully capture market prices in 2Q 2026.

For the domestic market, we do not rule out compression of domestic price premium or even

discounts. With respect to export margins, we noticed that in 2022, when Luberef was enjoying

a similar spike in base oil prices, its realised crack margins have been responding to changes in

market prices with a time lag. We thus do not rule out a similar scenario in 2026, with weaker-

than-market realised crack spreads in 2Q 2026, and stronger spreads when market margins

start to correct.

Luberef: benchmark-based and realised base oil crack spreads, USD/t

1,100

1,000

1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26e 3Q26e 4Q26e

Realised crack margin ex-freight Benchmark margin GI+II

Source: Luberef, HSBC estimates

Mid-term outlook and investment summary: Luberef guides for completion of Growth II

project in 2H 2026 which should drive stronger volume (we estimate 1.45mt base oil sales in

2027, after 1.15mt in 2026) and a better product mix with exposure to higher-margin Group III

market. These factors and lower capex could help Luberef sustain strong FCF and dividends in

2027, after what has been an exceptionally strong macro environment in 2026 so far.

Going forward, Luberef considers an investment in a new facility which could deliver 350kt of

additional base oil volume with possible FID in 2027. We continue to view Luberef as an

attractive mid-term growth story which is supported by exceptionally strong margins in 2026.

Luberef: uses of adjusted OCF (ex-WC), Luberef: clean FCF and WC changes,

USDm USDm

700 700

600 600

500 500

400 400

300 300

200 200