Yuanta Securities Korea on the 22nd projected that SK Innovation will deliver its best-ever results this year on the back of strong refining market conditions stemming from the Iran war and the high-margin LNG power generation business.
It also maintained a "buy (BUY)" rating and raised its target price to 190,000 won from 170,000 won. The previous trading-day closing price of SK Innovation was 118,800 won.
Hwang Gyu-won, an analyst at Yuanta Securities Korea, said, "As the super-boom phase in the refining sector continues due to the impact of the Iran war, and the value of the LNG power generation business absorbed and merged at the end of last year stands out, a rise in corporate value is expected in the second half." He also projected that this year's operating profit will surge to 5.4 trillion won, a record high, from 500 billion won a year earlier.
Hwang first focused on the possibility that high oil prices and strong refining margins will be prolonged due to Middle East geopolitical risks. "With the Strait of Hormuz effectively blocked, disruptions in Middle Eastern crude supply in 2026 amount to 5.5 million to 6.5 million barrels per day, or about 6% of global crude demand," he said, analyzing that "it will be difficult for international oil prices to fall below $100 per barrel."
He added, "Iran's attacks on Gulf countries damaged refining facilities with a capacity of 2.8 million barrels per day, equivalent to about 3% of global demand," and forecast that "since normal restoration is expected to take 12 to 18 months, the global shortage of refining capacity could persist until mid-2027 even after the end of the war."
He said, "With Qatar's 13 million-ton LNG facilities in April 2026—about 3% of global demand of 420 million tons—damaged, supply disruptions for more than two years are unavoidable," adding, "In Korea as well, with annual supply disruptions of about 5 million tons expected starting as early as this summer, the importance of energy self-sufficiency will come to the fore as SK E&S—absorbed and merged at the end of 2024—brings in about 3 million tons of LNG produced at overseas blocks directly into the country each year."