South Korea's four largest oil refiners swung sharply back to profit in the first half, posting combined operating profit of 14.79 trillion won on revenue of 120.63 trillion won after a 1.14 trillion won operating loss a year earlier. SK Innovation led with 5.65 trillion won, followed by GS Caltex with 4.19 trillion won, HD Hyundai Oilbank with 2.76 trillion won and S-Oil with 2.2 trillion won. Second-quarter profit alone reached 8.83 trillion won, up more than 48% from 5.96 trillion won in the previous quarter. The recovery was driven by a spike in international oil prices and refining margins after the late-February U.S.-Iran war and disruptions including a Strait of Hormuz blockade, alongside strong earnings from lubricant base oil. Dubai crude rose to $120 a barrel, while the Singapore complex refining margin averaged $24.7 a barrel in the second quarter, far above the usual breakeven range of $4 to $5. Refiners also benefited from the lag effect, where earlier cheaper crude feeds through to costs later, and from inventory valuation gains as stockpiles rose in value. Lubricant base oil, used to make high-performance lubricants, became another major profit engine after disruptions to Middle East Group III supply and logistics constraints removed about 30% of global supply, pushing spreads to $130-$160 a barrel. Even so, the industry sees a more difficult second half as inventory gains risk reversing if oil prices fall, OPEC+ output increases and regional refinery utilization rises. Refiners also face uncertainty over compensation under South Korea's oil price cap, higher logistics costs as they diversify away from Middle Eastern crude, and legal risk from collusion investigations and indictments involving petroleum product pricing and purchase contracts.