Hosking Partners LLP on Motor Oil (Hellas) Corinth Refineries S.A.
Thesis
Motor Oil is part of Hosking's oil-refining basket, which benefited from disrupted Middle Eastern energy flows during the quarter. The manager believes the refining capital cycle is less mature than the tanker cycle, leaving more long-term upside. Planning restrictions and environmental regulations limit the development of competing refinery capacity, particularly in the West. End-user demand for refined products remains strong, supporting returns for established suppliers.
“we see longer term upside as the refining cycle is still immature”
Key risks
- Refining profitability could normalize if geopolitical energy disruptions ease.
- New refinery investment and capacity additions over time could narrow refining margins.
- Oil prices and fuel demand are susceptible to cyclical changes even if structural barriers remain high.