S. Korean refiners boost output to prevent fuel shortages

Published: Thursday, March 19, 2026 at 2:56 am

South Korean Refiners Increase Output to Secure Fuel Supply

Seoul, South Korea – South Korea's major oil refiners are taking steps to bolster domestic fuel supplies amidst growing global energy uncertainties. Industry officials announced Tuesday that the nation's four primary oil refiners are increasing production and delaying planned maintenance to ensure stability in the face of rising geopolitical risks.

This decision comes as refining margins have surged, reaching approximately $30 per barrel, significantly exceeding the industry's break-even point. Analysts are characterizing this as a "super cycle" for the refining sector. Despite the strong profitability, refiners are prioritizing supply stability, driven by concerns over potential fuel shortages. These concerns are linked to escalating tensions in the Middle East and potential disruptions in the Strait of Hormuz.

GS Caltex has postponed major maintenance at its Yeosu refinery by about two months, opting to maintain production during the current high-margin period. This maintenance, which typically lasts around 40 days and involves significant costs, was delayed to ensure a stable supply of fuel, including naphtha. Naphtha, a crucial feedstock for petrochemical production, has seen its price nearly double in the past year, reaching approximately $1,009 per ton.

SK Energy has stated it will continue operating at full capacity while adhering to the government's oil price cap policy. Government authorities are actively monitoring refinery inventories and shipments through a joint task force. S-Oil and HD Hyundai Oilbank are also prioritizing domestic supply, aligning with government measures that restrict gasoline and diesel exports.

Industry sources suggest that other refiners may follow GS Caltex's lead in adjusting maintenance schedules. Shutting down facilities during a period of elevated margins would reduce efficiency. Refiners are aiming to balance robust earnings with their responsibility to prevent a domestic fuel crisis as geopolitical tensions continue.

BNN's Perspective: While the refiners' actions are understandable given the current global climate, the government's involvement in price controls and export limitations highlights the delicate balance between market forces and national security. It remains to be seen how these measures will impact long-term supply and demand dynamics.

Keywords: South Korea, oil refiners, fuel supply, production, maintenance, refining margins, naphtha, geopolitical tensions, Middle East, Strait of Hormuz, SK Energy, GS Caltex, S-Oil, HD Hyundai Oilbank, fuel shortages, energy risks

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