S-Oil Operating Profit Jumps 513.7% to 1.41 Trillion Won in Third Quarter

Key Facts

South Korea’s S-Oil reported operating profit of 1.41 trillion won for the period from July to September 2026, up 513.7% from 229.2 billion won in the third quarter of the previous year, according to Aju Press. Revenue rose 42.2% year on year to 11.97 trillion won, with the increase attributed to higher crude prices. Net profit surged to 1.44 trillion won from 63.2 billion won a year earlier. The company linked the improved results to higher oil prices, stronger export refining margins and lubricant profitability. The results highlight the contribution of the lubricants segment, which surpassed refining in operating profit during the quarter.

The lubricants segment posted operating profit of 742.7 billion won, compared with 133.6 billion won in the corresponding quarter of 2025, according to Aju Press. Its operating profit therefore exceeded that of the refining segment, although refining remains the company’s flagship traditional business. Coverage attributed the widening of base-oil margins, the main component of engine oil, to ongoing production disruptions and shipping restrictions in the Middle East. Group III products, high-quality base oils, were the most affected by the wider margins. These factors link the segment’s performance to supply disruptions and shipping costs, rather than to a documented increase in demand for lubricants.

In refining, operating profit reached 690.4 billion won, up from 115.5 billion won a year earlier, on revenue of 9.06 trillion won, according to Aju Press. The company attributed the improved results to higher oil prices and stronger export refining margins. The year-on-year comparison shows the segment’s profit widening alongside an increase in group revenue, but lubricants contributed more to operating profit during the quarter. That gave the results a mix of refining activity and base-oil product margins. Production and shipping disruptions in the Middle East remain a factor that coverage linked to base-oil margins.

The company’s other segments did not share in the improvement to the same extent: the petrochemicals operating loss widened to 26.4 billion won from 19.9 billion won a year earlier. This came despite a 34% rise in segment revenue to 1.36 trillion won, according to Aju Press. The divergence between revenue growth and continued widening losses shows that higher sales did not translate into improved operating profitability for this business. The negative performance partly offset strong results in refining and lubricants. The company’s profit surge was therefore driven mainly by those two segments, while petrochemicals remained a weak spot in the quarter’s results.

Saudi Aramco’s ownership of the company ties its results to the regional energy market, at a time when coverage attributed wider base-oil margins to production disruptions and shipping restrictions in the Middle East. S-Oil said in August that the Shaheen project is targeting commercial operations in 2027. The company said the project would allow it to respond flexibly to supply-chain shocks and changes in raw-material prices, citing fluctuations in naphtha supply linked to geopolitical risks. The project forms part of the company’s future plans to increase flexibility in its choice of raw materials. Its target date comes after the current reporting period, while third-quarter data reflected strong performance in refining and lubricants against wider losses in petrochemicals.

In trading, S-Oil shares rose 3.25% to 127,000 won at 2:26 p.m. on Nov. 2, according to Aju Press. In a broader indicator of industrial activity, South Korea’s manufacturing purchasing managers’ index stood at 51.3 in October, down from 53.9 in September, according to Reuters. The index remained above the 50 threshold separating expansion from contraction for the 11th consecutive month. On Nov. 1, EL7 covered South Korea’s export growth of 93.7% in October, describing the increase as the fastest since 1974. These economic indicators provide broader context for the South Korean market, while the company linked its results to oil prices, refining margins and lubricant profitability.