Refiners Face Q1 Earnings Shock on Coronavirus Impact | Be Korea-savvy

Refiners Face Q1 Earnings Shock on Coronavirus Impact

Petrochemical industrial complex in Ulsan. (Yonhap)

Petrochemical industrial complex in Ulsan. (Yonhap)

SEOUL, April 12 (Korea Bizwire)South Korean refiners are expected to report a 2.5 trillion-won (US$2.06 billion) combined operating loss during the first quarter due to lower demand and refining margins, industry sources said Sunday.

The country’s four major refiners — SK Innovation Co., GS Caltex Corp., Hyundai Oilbank Co. and S-Oil Corp. — are forecast to suffer the hefty operating loss in the first quarter as demand fell amid the economic fallout from the spreading coronavirus outbreak and oil prices plunging due to a price war between oil-producing countries.

Last month, Saudi Arabia, the world’s largest oil exporter, started an oil price war with Russia, slashing its selling prices and pledging to unleash pent-up supply to markets already suffering lower demand amid an economic slowdown.

Saudi Arabia’s move was widely seen as a step to punish Russia as it balked at production cuts proposed by the Organization of the Petroleum Exporting Countries (OPEC) amid worsening coronavirus woes.

Even if the oil-producing nations end the price war and agree on production cuts, refiners won’t likely make a meaningful rebound due to sharply lower demand amid the spreading COVID-19 virus outbreak, they said.

The four refiners have entered an emergency management system to respond to the unprecedented crisis.


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