South Korea's Refiners See Sharp Q2 Earnings Decline as Oil Prices Fall to $70

According to Yonhapnews, South Korea's major refiners posted significantly lower second-quarter earnings starting in recent weeks, as international crude prices fell sharply from over $120 to around $70 per barrel following Middle East peace hopes.

SK Innovation's petroleum division operating profit is expected to plunge 35% to 1.255 trillion won in Q2 from 1.93 trillion won in Q1, while S-Oil's forecast dropped 11% to 1.0966 trillion won. Some refiners reportedly turned to losses as early as May after depleting pre-war crude stockpiles. Negative inventory effects and lagging losses are expected to worsen in Q3, as companies purchased expensive crude amid high geopolitical risk premiums but must sell refined products at depressed prices. Risk premiums remain above $20 per barrel versus pre-war levels of $0.50.