South Korean refiner S-Oil said high margins for Group II and Group III base oils outweigh the benefit of producing more diesel to take advantage of high refining margins.Diesel prices have surged in recent months on an outright basis and relative to crude prices.The trend has incentivized some refiners to produce more of the motor fuel instead of products like base oils that use the same feedstock. The trend has also raised concern about tighter availability of base oils over the coming months.That incentive remains insufficient for S-Oil, which said more than 90pc of its base oil production capacity consists of Group II and Group III base oils. .Any conversion of its Group I base oils production to diesel involves a very small volume, the company said in a first-quarter earnings conference call.S-Oil’s base oil and lube refinery run rate fell back to 99.1pc in the first quarter, down from 101pc during the final three months of 2021..S-Oil’s Q1 lube profit falls
