(LEAD) S-Oil shifts to Q2 profit on high refining margins, lubricant sales

S-Oil, South Korea's third-largest refiner, turned profitable in the second quarter due to high refining margins and robust lubricant sales. The company reported a net profit of 514.6 billion won in Q2, a stark contrast to the 66.8 billion won loss it incurred in the same period last year. The surge in profits can be attributed to the protracted conflict in the Middle East, which has disrupted supply and inflated refining margins.

S-Oil anticipates sustained demand in the second half of the year to maintain profitability, as global inventories of crude oil and refined products dwindle. The firm's sales grew by 40.9 percent to 11.34 trillion won during Q2, up from 8.05 trillion won in the previous year. On a six-month basis, S-Oil recorded a net profit of 1.24 trillion won, reversing the 111.34 billion won loss it reported in the comparable period last year.

The company is also constructing a 9.26 trillion-won petrochemical complex under its Shaheen project, slated to commence trial operations by late 2026. The facility, located adjacent to S-Oil's existing refinery in Ulsan, will produce essential petrochemicals such as ethylene, propylene and butadiene, starting in early 2027. Saudi Arabia's state-owned Aramco owns a 63.4 percent stake in S-Oil.