Adds quarterly earnings and analyst comment

SEOUL, May 11 (Reuters) - South Korea's S-Oil 010950.KS, whose main shareholder is Saudi Aramco 2223.SE, said on Monday it expects second-quarter refining margins to remain healthy, as supply disruptions look set to outweigh demand softness driven by high product prices.

In the January-March period, the refiner said it operated the crude distillation units (CDUs) at its 669,000 barrels-per-day (bpd) oil refinery in the southeastern city of Ulsan at 85% of capacity, compared to 96% during full-year 2025.

Here are details of S-Oil's first-quarter results:

• The refiner reported an operating profit of 1.2 trillion won ($817.97 million) in the first three months of 2026, compared with a 22 billion won loss a year earlier, it said in a statement.

• Revenue fell 0.5% on-year to 8.9 trillion won.

• Its refining division posted an operating profit of 1 trillion won, helped by wider regional refining margins driven by strong middle distillate strength amid run cuts and government-led export restrictions following crude supply disruptions.

• Last month, South Korea capped domestic fuel prices to contain the impact of a spike in energy costs stemming from conflict in the Middle East. Prices are being adjusted every two weeks to reflect changes in global oil prices.

• Analysts said South Korean refiners face heightened uncertainty due to concerns over crude oil supply disruptions and the implementation of a domestic fuel price cap system.

• They added that the government’s measures aimed at curbing fuel prices amid the sharp rise in oil prices were resulting in opportunity losses on gasoline sales, weighing on short-term profitability, although the impact is expected to ease once oil prices stabilise.

($1 = 1,467.0500 won)