Key facts
- Sinopec's net profit rose 19.3% year-on-year to 25.63 billion yuan in the first half of 2026.
- The company experienced a 5.6% decrease in crude oil processing during the period.
- Refining margins saw a significant increase of 44.1%.
- Sinopec incurred a 16 billion yuan inventory write-down due to price volatility.
- The chemicals segment reported a narrowed operating loss.
China's state-owned energy giant Sinopec reported a 19.3% year-on-year increase in net profit for the first half of 2026, reaching 25.63 billion yuan. This unexpected growth occurred despite challenges including the ongoing Middle East conflict, which has disrupted supply routes like the Strait of Hormuz, and a domestic decrease in fuel demand.
Sinopec processed 5.6% less crude oil, totaling 113.31 million tonnes, compared to the same period in the previous year. However, the company managed to significantly boost its refining margin by 44.1% to 453 yuan per tonne. This improvement was attributed to broadening crude oil sourcing outside the Middle East, strategic timing of purchases, and optimizing product mix.
Despite the overall profit increase, Sinopec had to account for a 16 billion yuan write-down on its inventories due to volatility in oil and fuel prices. The company's chemicals segment remained in the red, recording an operating loss of over 200 million yuan, though these losses narrowed substantially. Output of ethylene, a key petrochemical building block, fell 15.5% amid industry overcapacity.
Looking ahead, Sinopec executives anticipate that pressure on refined oil demand will ease in the second half of 2026. The company projects crude throughput for July to December to be approximately 113 million tonnes, roughly flat compared to the first half, and expects earnings to continue exceeding estimates.