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The popular industry perception has it that Hydrocracking-Isodewaxing process is the most economical means of producing API Group III base oils even though there are many other variables involved in its economy. Hydrocracking is a well known method of converting Aromatic components to Paraffinic components that is operated at very high pressure and high temperature.

As illustrated in the following diagram, Hydrocracking unit produces Paraffinic components which give Very High Viscosity Index by cracking condensed aromatics and impurities with hydrogen.
However, some of the long chain normal paraffins, so called wax, have very high Pour Point that is considered to be an undesirable characteristic. The best way of removing the long chain normal paraffins(Wax) is to break and to isomerize them into iso-paraffins. Iso-paraffins render both high VI and good pour point.