S-Oil Corp on Monday reported KRW 265 billion ($184.03 million) in net income and KRW 8.79 trillion in revenue for the fourth quarter of 2025, both up from the prior three-month period “on robust fuel and lube spreads”.
By annual comparison the bottom line recovered from net losses of KRW 193 billion to net earnings of KRW 216.9 billion despite revenue falling from KRW 36.64 billion to KRW 34.25 billion, according to results published online by the South Korean downstream company.
October-December 2025 operating income increased 85.2 percent quarter-on-quarter to KRW 424.5 billion. Refining contributed KRW 225.3 billion, up 95.1 percent sequentially. Lubricants accounted for KRW 207 billion, up 54.9 percent compared to July-September 2025. The petrochemicals segment has remained unprofitable for the sixth consecutive quarter but Q4 2025 saw net losses narrow to KRW 7.8 billion.
“Regional refining margins increased, supported by kero and diesel spreads, amid tight supply from global refinery disruptions and the Northern Hemisphere heating season”, S-Oil said of the market environment in Q4.
However, regional refining margins “eased toward the end of the quarter on Russia-Ukraine ceasefire negotiations”, it noted.
Nonetheless for the first quarter of 2026 S-Oil expects regional refining margins “to remain robust supported by steady demand, ongoing supply disruptions and the planned closure of an aging U.S. refinery”.
“Refinery maintenance season beginning at the end of Q1 may further support margins through inventory buildup demand”, it added.
In petrochemicals, the paraxylene (PX) market in Q4 “improved on new PTA startups in China with robust downstream polyester demand” while the benzene market “weakened on slow U.S. import demand and low downstream operation”, S-Oil said.
For aromatics, the paraxylene market in Q4 “improved on new PTA startups in China with robust downstream polyester demand” while the benzene (BZ) market “weakened on slow U.S. import demand and low downstream operation”, it said.
In Q1 2026 S-Oil expects the paraxylene market to “remain firm, on tight annual supply-demand balance and reduced supply due to maintenance of PX plants”. It added, “For BZ, supply pressure from new capacities in China is expected to be offset by maintenance of BZ production facilities”.
For olefins, the propylene market in Q4 “softened as supply increased after T&Is” while the polypropylene market “improved on seasonal demand and unexpected shutdowns of major suppliers”.
In Q1 2026 S-Oil expects the propylene and polypropylene markets to experience “a gradual demand recovery, supported by easing trade uncertainties, despite ongoing capacity additions in China”.
In lubricants, “LBO spread increased QoQ due to a lagging impact from lower feedstock cost despite weak seasonal demand”, it said.
In Q1 2026, “LBO fundamental is likely to see supply pressure partly offset by inventory build-up ahead of the spring oil change season”, S-Oil added.
For the whole year S-Oil said “a tight [refining and paraxylene] market is expected as global demand growth outpaces net capacity additions “.
“Lower oil prices and declining OSP are likely to ease cost pressures, supporting a favorable business environment”, it said.
To contact the author, email jov.onsat@rigzone.com
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