S-Oil Rides Global Refining Crunch to Target Price of 160k Won

S-Oil's strong performance is expected to continue due to the global shortage of refining and base oil supply, which may persist through 2027. Analyst Lee Chung-jae at Korea Investment & Securities Co. maintained a 'buy' rating on S-Oil with a target price of 160,000 won.

The company's second-quarter revenue reached 11.3 trillion won, operating profit was 965 billion won, and net profit was 514.6 billion won. The base oil segment saw a record 37% operating margin due to production disruptions in Qatar and Bahrain, which account for about 20% of the world's Group III base oil supply.

Lee Chung-jae projected it will take time to restore energy facilities in the Middle East and normalize passage through the Strait of Hormuz. The analyst also cited a decline in U.S. crude inventories as a factor supporting oil prices and refining margins.