Seoul: S-Oil Corp., South Korea's third-largest refiner by sales, reported an increase in its second-quarter net losses, driven by the appreciation of the won and a decrease in oil prices. The company disclosed that for the three months ending in June, net losses rose to 66.8 billion won (US$48.5 million) from 21.3 billion won in the same period last year.
According to Yonhap News Agency, the company's refining division faced expanded losses due to the lower oil prices and the stronger won against the U.S. dollar. This decline in oil prices followed an agreement by eight OPEC+ alliance members to augment their combined crude production by 548,000 barrels per day in August. Additional pressure came from U.S. tariff concerns and geopolitical risks.
S-Oil experienced a shift to an operating loss of 344 billion won in the second quarter, contrasting with an operating profit of 160 billion won recorded a year earlier. The company also noted a 15.9 percent reduction in sales, which decreased to 8.04 trillion won from the previous 9.57 trillion won.
Despite the current challenges, S-Oil remains optimistic about a recovery in refining margins in the upcoming third quarter, anticipating support from high seasonal demand during the summer driving period. In the first half of the year, the company reported a net loss of 111.34 billion won, reversing from a net profit of 144.87 billion won a year prior. The operating loss stood at 365.51 billion won, compared to a 614.75 billion won profit previously, with sales dropping by 9.7 percent to 17.04 trillion won from 18.88 trillion won.
Saudi Arabia's state-run Aramco holds a significant 63.4 percent stake in S-Oil, underlining its strategic importance in the global energy market.