S-Oil reported third-quarter operating profit of 1.41 trillion won (US$1.0 billion), up 513.7% from a year earlier, as higher refining earnings and stronger lubricant base oil margins lifted results.
The company attributed the improvement to wider base oil spreads, with Group III grades benefiting from supply disruptions and shipping constraints in the Middle East increasing demand and premiums for South Korean material. It expects tight supply conditions to continue through the fourth quarter.
The lubricant division generated operating profit of 742.7 billion won on revenue of 1.54 trillion won, giving it an operating margin of 48.2%. The division accounted for more than half of S-Oil’s total operating profit during the quarter.
The company said it had maintained refinery operations through long-term crude supply contracts, alternative grades, government stock swaps and ship-to-ship transfers.
S-Oil said its crude slate consisted of around 90% light grades in the third quarter, limiting crude distillation unit utilization to 81%. It plans to increase the share of medium grades and target utilization of about 90% in the fourth quarter.