Refining Margins Recover, Boosting Oil Industry... All Three Major Refiners Turn Profitable

SK Innovation, S-Oil, and HD Hyundai Oilbank All in the Black
Refining Margins Recover Despite Steady International Oil Prices
"Strong Fourth Quarter Expected with Winter Peak Demand"

SK Innovation, S-Oil, and HD Hyundai Oilbank, the three major domestic refiners, all succeeded in turning a profit in the third quarter of this year. Despite international oil prices remaining steady, profitability improved as refining margins recovered, the exchange rate rose, and the base oil spread strengthened. The industry expects this solid trend to continue into the fourth quarter, considering global refinery disruptions and seasonal demand growth.

According to the combined results for the third quarter of 2025, SK Innovation, S-Oil, and HD Hyundai Oilbank all posted quarterly profits as of November 3. GS Caltex, which ranks second in sales, is scheduled to release its results on November 7.

A gas station in downtown Seoul. Photo is not directly related to the article content. Photo by Kim Hyunmin

SK Innovation recorded consolidated sales of 20.5332 trillion won and an operating profit of 573.5 billion won in the third quarter, turning around from an operating loss of 423.3 billion won during the same period last year. Refining margins stabilized, and increased demand for power generation fuel also improved the energy division's performance.

S-Oil reported sales of 8.4154 trillion won and an operating profit of 229.2 billion won, reversing an operating loss of 414.9 billion won last year. Despite increased production by OPEC Plus (OPEC+), continued disruptions at Russian refineries led to higher margins for kerosene and diesel. The base oil business was also supported by steady global demand. An S-Oil official explained, "The strength of refining margins and the base oil spread contributed to the recovery in profitability."

HD Hyundai Oilbank also posted a quarterly profit, with sales of 7.3285 trillion won and an operating profit of 191.2 billion won. Performance improved as refining margins recovered and the proportion of high value-added products increased. The company plans to further enhance profitability by optimizing plant operations and expanding eco-friendly refining technologies.

The industry initially expected performance to improve in the first half of this year, but the recovery in refining margins was delayed, resulting in a turnaround in the third quarter. There is analysis that strong refining margins are likely to continue into the fourth quarter, as supply remains constrained due to Middle East risks and disruptions at Russian refining facilities, combined with increased demand for heating oil in winter. However, as the spread of electric vehicles and the slowdown in oil consumption continue, the industry remains cautious.