South Korean refiner GS Caltex saw profit from its base oils and lube unit fall in the third quarter to its lowest in more than a year in the face of slower demand and rising costs.

The unit’s operating profit of 79.9bn South Korean won ($62mn) in the three months to end-September fell by 52pc from year-earlier levels and by 47pc from the second quarter.

Profit fell in the face of a 19pc fall in sales to their lowest since end-2021.

Sales fell amid a seasonal dip in demand and lower base oils prices.

Asia Group II base oils prices fell by more than 20pc in the third quarter from year-earlier levels and by 5pc from the second quarter, ICIS data showed.

Crude oil prices fell less sharply from year-earlier levels and rose from the second quarter.

The trend cut the premium of Asia Group II light-grade prices over Dubai crude to $26.80/bl in the third quarter.

The premium fell from close to $40.70/bl in the second quarter to the lowest since the beginning of 2022.

The N150 premium to crude also fell below the diesel premium to crude for the first time this year, GS Caltex data showed.

The N150 premium to crude had been more than $25/bl higher than the diesel premium to crude in the second quarter.

Lower sales and higher costs triggered a fall in the base oil unit’s profit margin to 17.7pc in the third quarter, down from 29.6pc during the previous three months.

The refiner maintained base oils output at maximum levels in the third quarter even with the pressure on margins.