An Ampol logo is displayed at a petrol station in Sydney, Australia, March 20, 2026. REUTERS/Hollie Adams
July 30 (Reuters) - Australia's Ampol said on Thursday its Lytton refinery margins more than tripled in the second quarter, bolstered by surging oil premiums linked to the Middle East conflict, lifting its shares to their highest level in more than two years.
The prolonged closure of the Strait of Hormuz had tightened crude supplies to Asian refiners, reducing refinery activity and driving up refined fuel margins due to product shortages, Ampol said.
Going into the third quarter, Ampol said it was well positioned to manage any prolonged conflict, having secured supply arrangements for most of the quarter.
The country's top fuel retailer reported a 255% surge in its second-quarter Lytton refining margin to $30.93 per barrel from $8.71 a year earlier.
However, total group sales volume fell to 6,176 million litres from 6,304 million litres a year earlier.
Earnings strength was mainly driven by exceptional refining margins rather than broad-based volume growth, said Mark Elzayed, chief investment officer at Investor Pulse.
"A sustained easing of tensions around the Strait of Hormuz could reduce geopolitical risk premiums and compress refining margins toward longer-term average levels, creating downside risk for Lytton's refining earnings in subsequent quarters," Elzayed warned.
Shares of the company were up 0.6% by 0418 GMT after climbing as much as 3.4% earlier in the session to hit their highest level since April 2024.
Ampol said its Lytton refinery will be shut between August and October for maintenance, which it expects to reduce annual production by about 300 million litres.
The company expects to manage the reduction through its diversified supply sources, import infrastructure and trading capability.
First-half earnings strength should give the company ample capacity to fund the Lytton refinery turnaround from internal cash flow, Elzayed said.
The fuel retailer said its first-half replacement cost operating profit (RCOP) EBIT was A$1.35 billion ($965 million) on an unaudited basis, more than triple from a year earlier.
($1 = 1.4368 Australian dollars)
Reporting by Jasmeen Ara Shaikh, Shruti Agarwal and Aamir Shaik Khalid in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu
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