Exxon Mobil Expands Singapore Refining Capacity, Pivots to Sour Crude Imports

Exxon Mobil has successfully started new production facilities at its Singapore refining complex, a strategic move that boosts its output of high-value lubricants and significantly increases its intake of high-sulphur crude oil. 

The company announced Tuesday that the new unit uses advanced technology to convert residual fuel oil and other low-value crude products into more profitable lube base stocks and distillates. This expansion increases Exxon’s production capacity of Group-II base stocks by 20,000 barrels per day. These base stocks are essential components in lubricants for commercial vehicles and industrial applications, including engine oils, gear oils, marine oils, and greases. 

The operational startup has driven a sharp rise in crude imports to the facility. According to data from analytics firm Kpler, Exxon's Singapore refinery processed a record 541,000 barrels per day (bpd) in August, the highest volume since tracking began in 2016. This surge is fueled entirely by high-sulphur (sour) crude, as the refinery has halted all imports of low-sulphur U.S. crude since April. 

Shifting Supply from Middle East 

The pivot to sour crude has reshaped the refinery's supply chain, positioning the Middle East as the primary source. In August, the United Arab Emirates was the top supplier with its Murban and Upper Zakum grades, followed by Qatar, which supplied al-Shaheen crude. 

Notably, the refinery also imported Arab Light crude from Saudi Arabia for the first time since November 2023. Other key suppliers for the month included Oman and Iraq. The Jurong Island facility, Exxon's largest integrated refining and petrochemical complex, has a total crude processing capacity of 592,000 bpd. 

Summary:

Exxon Mobil has launched new refining units in Singapore, boosting its production of high-value Group-II base stocks by 20,000 barrels per day. This expansion has driven a record surge in crude imports at the facility, which is now exclusively processing high-sulphur grades sourced primarily from the Middle East. The strategic shift includes a halt on imports of low-sulphur U.S. crude, fundamentally altering the refinery's feedstock and supply chain.

Frequently Asked Questions (FAQs)

1. Why is Exxon Mobil expanding its refining capacity in Singapore?

Exxon Mobil is expanding to strengthen its ability to process heavy, high-sulphur crude into higher-value products such as lubricants and distillates. Singapore is also a strategic hub for refining and petrochemical operations, serving fast-growing Asian markets.

2. What are Group-II base stocks and why are they important?

Group-II base stocks are high-quality base oils used to manufacture lubricants for vehicles, industrial machinery, and marine applications. They provide better performance in terms of oxidation stability, volatility, and engine protection compared to lower-grade oils.

3. Why is Exxon Mobil shifting from low-sulphur to high-sulphur crude?

High-sulphur (sour) crude is generally cheaper than low-sulphur grades. By upgrading its technology to handle heavier feedstocks, Exxon Mobil can improve refining margins while ensuring a steady supply from key Middle Eastern producers.

4. How significant is the increase in crude imports at the Singapore refinery?

In August, crude imports surged to 541,000 barrels per day—the highest since 2016. This record intake reflects the new refining capacity and signals growing demand for sour crude in the region.

5. Which countries are supplying crude to Exxon Mobil’s Singapore refinery?

The main suppliers are the United Arab Emirates (Murban, Upper Zakum), Qatar (al-Shaheen), Saudi Arabia (Arab Light), Oman, and Iraq. The shift has deepened Exxon’s reliance on Middle Eastern oil.

6. What is the broader industry implication of Exxon Mobil’s move?

The expansion highlights a wider trend of refiners upgrading facilities to process cheaper heavy crude while meeting rising demand for high-performance lubricants. It also reinforces Singapore’s role as a refining and trading hub for Asia.

7. How large is Exxon Mobil’s Jurong Island refinery?

The Jurong Island complex is Exxon’s largest integrated refining and petrochemical site in Singapore, with a crude processing capacity of 592,000 barrels per day.