South Korean oil refiners that enjoyed solo boon amid the global-wide slump from depressed oil prices fear the good days may be coming to a close.

South Korea’s leading oil refiners SK Innovation Co., GS Caltex Corp. and Hyundai Oilbank Co. all performed better than expected in the first half. SK Innovation posted 1.96 trillion won ($1.76 billion) in operating profit, up 32 percent from a year ago, in the first six months this year. GS Caltex and Hyundai Oilbank reported operating profits of 1.08 trillion won and 524.8 billion won, respectively.

They bounced back strongly from last year on the back of their worst-ever performance in 2014 due to freefall in oil prices as their bigger storage capacity and abundant inventory kept them safe from the impact from plunges in oil prices to instead bolster their cracking margin as oil prices were soft not from poor demand but from supply glut.

But that was when they kept up cracking margins on the back of cheap crude imports and firm demand.

The benchmark Dubai crude refining margin in Singapore, a proxy for Asian refiners, has been on downhill, slipping to $3.3 per barrel last week from $5.1 last month and $9.9 in January. During their worst year of 2014, the margin averaged $5. The bottom-line margin a refiner usually can make profit from refining crude for wholesale oil products is $4.5.

“Oil refiners cannot make any money if they are refining at a margin in $3 level. They will just be able to see break-even point with the margin at $4.5,” said one industry source.

The industry is keeping its fingers crossed, hoping the downtrend may be seasonal and temporary.

Oil-related demand is usually slow during the summer due to slower industrial activity. It also does not think it will go back to the slump of 2014 when tight margin was coupled with poor oil demand. The rising international oil prices will likely prevent further fall in the refining margin.

The industry is hopeful that business will pick up in the fourth quarter after a slow third quarter.

The local refining sector may do poorly in the third quarter even with revival in oil prices due to poorer refining margin and unfavorable foreign exchange conditions, said Hwang Yoo-sik, an analyst at NH Investment & Securities Co. He, however, predicted refining margin would pickup from the fall.

By Hong Jong-sung and Jung Wook

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