South Korean Refinery Stocks Rally on Higher Margin Expectations

By Kwanwoo Jun

South Korean refinery stocks rose sharply on expectations of higher profit margins, as China's restrictions on fuel exports added to concerns about global oil supply chains that have already been strained by tensions in the Middle East.

Shares of S-Oil, a Saudi Aramco-controlled South Korean refiner, jumped 12% at the close of regular trading, their largest daily percentage gain in more than five months, before paring some of the gains in after-hours trading. Local peer SK Innovation also finished higher, climbing 10%. The advances outperformed the benchmark Kospi's 0.5% rise.

The rally followed news that China had suspended exports of refined fuel products beyond Hong Kong and Macau, a move that could worsen global supply constraints amid the prolonged Middle East conflict.

The U.S. is sending a third aircraft-carrier strike group and additional Marine Corps ships to the Middle East, as President Trump considers renewing strikes on Iran after the midterm elections, The Wall Street Journal reported.

LS Securities analyst K.H. Chung said Friday that such developments could benefit South Korean refiners, which rely heavily on overseas sales, as the oil market increasingly prices in a risk premium.

Fuel export restrictions by China--and possibly a similar move by the U.S. later--could boost fourth-quarter refining margins for South Korean refiners, which export 50%-70% of their refined petroleum products to overseas markets, Chung wrote in a research note.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

October 02, 2026 04:28 ET (08:28 GMT)