Portugal's oil and gas company Galp Energia said its refining margins more than tripled in the third quarter from a year earlier to record highs, as the Middle East conflict tightened supplies of refined products, driving prices sharply higher.
In its trading update, Galp said refining margins jumped to $33.8 per barrel in the third quarter from $9.5 a year earlier, doubling from $16.8 in the preceding three months.
Galp owns Portugal's sole 226,000-barrel-per-day oil refinery in Sines, which supplies between 85 per cent and 90 per cent of the country's fuel needs.
Benchmark Brent crude prices surged after the US and Israel attacked Iran in late February, prompting Tehran to effectively shut the Strait of Hormuz.
The resulting disruption to fuel supplies drove diesel, gasoline and other refined-product prices higher than crude, boosting refining margins worldwide and setting the stage for a multibillion-dollar windfall for oil companies.
However, record tanker freight rates in recent weeks are expected to weigh on margins after attacks around the Strait of Hormuz drove up shipping costs across global energy routes.
Galp also said its share of oil and gas production from its prolific offshore fields in Brazil - from where the bulk of its crude comes - rose 14 per cent year-on-year to 131,000 barrels of oil equivalent per day. Average Brent crude prices increased to $97.0 per barrel from $69.1 a year earlier.
Galp is due to report its third-quarter results on October 26 ahead of trading on Euronext Lisbon.
(Reporting by Sergio Goncalves; Editing by Aurora Ellis)