Refinery owner reaps profit boost from Middle East war
The owner of one of Australia’s two oil refineries has warned that the crisis in the Middle East continues to increase the cost of “black gold”.
As a result, Ampol’s Lytton refinery in Brisbane experienced a large increase in refinery or profit margin in the first quarter of its financial year.
The difference between what it paid for crude oil and the price at which it sold the refined product increased from $6.07 per barrel to $25.45 per barrel in the same quarter of 2025.
The conflict began with the US attack on Iran on February 28 and resulted in the closure of the Strait of Hormuz, through which approximately 20 percent of the world’s crude oil supply passes.
Before the war, Brent crude oil was trading around $60 a barrel. It’s now just under $100 after hitting as high as $120, pushing up prices at the pump.
Some analysts have warned that crude oil could rise to $150 per barrel if the crisis continues into the second half of this calendar year.
Lytton refinery increased production by 10 percent in the first quarter 1434 million liters.
Ampol also reported that fuel sales increased by 4.7 percent, supported by resilient demand in retail and wholesale channels.
“Our primary focus was on supplying our customers in the Australian and New Zealand markets,” Ampol said in a statement on Wednesday.
However, the consequences of closing the strait continue to create difficulties.
“There is significant uncertainty about the impact and duration of the conflict and the pace of recovery of fuel supply chains,” Ampol said.
The Lytton refinery processes “light sweet” crude oil, measured in Brent price and reflecting sulfur content; this crude is easier to process than standard Persian Gulf “sour” crude, but tends to be more expensive.
“As a result, crude oils suitable for Lytton remain available in the market and crude purchases have been secured through July in line with normal purchasing patterns, albeit at higher landing costs,” he said.
Australia’s other refinery owner is Viva Energy, which operates the Geelong refinery in Corio, Victoria.
That refinery was damaged by a fire in early April, and the facility is not expected to return to near full capacity for several weeks.
The Geelong and Lytton refineries together account for around 20 per cent of Australia’s onshore fuel supply.
Ampol shares rose 4.4 percent to $32.99 in morning trading on the stock exchange.
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