Sinopec H1 profit rises 19.3% despite Iran war, weak fuel demand
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China's Sinopec reported a 19.3% year-on-year rise in first-half net profit to 25.63 billion yuan ($3.81 billion), defying the Middle East conflict and falling domestic fuel demand. The world's largest refiner set aside 16 billion yuan in asset impairment provisions due to oil and fuel price volatility. The refining segment's operating profit surged 381.5% despite a 5.6% drop in crude throughput.
Key Facts
- Sinopec's first-half net profit reached 25.63 billion yuan ($3.81 billion), up 19.3% from 21.48 billion yuan a year earlier.
- The company set aside provisions for asset impairment of 16 billion yuan due to oil and fuel price volatility in the first six months of 2026.
- Sinopec processed 113.31 million metric tons of crude oil in January-June, down 5.6% year on year, or 4.57 million barrels per day.
- The refining segment's operating profit grew 381.5% year on year, driven by broader crude sourcing outside the Middle East and optimized product mix.
- Sinopec's refining margin rose 44.1% to 453 yuan per metric ton, up 139 yuan from a year earlier.
Profit Surge
Sinopec reported net profit of 25.63 billion yuan ($3.81 billion) for the first half of 2026 under Chinese accounting standards, up from 21.48 billion yuan a year earlier. The company said the Middle East conflict caused sharp volatility in international crude oil prices and a substantial increase in imported crude procurement costs. Domestic refined product and chemicals markets remained weak, according to management statements in the filing. Sinopec relies on the Middle East for half of its crude oil needs, making it vulnerable to the Strait of Hormuz supply crisis that has largely closed the waterway since March.
Refining Performance
The refining segment posted a 381.5% growth in operating profit by broadening crude oil sourcing outside the Middle East and closely managing purchase timing. Sinopec's refining margin increased 44.1% year on year to 453 yuan per metric ton, up 139 yuan from the first half of 2025. The company processed 113.31 million metric tons of crude oil in the first six months, a 5.6% decline from the same period a year earlier. China has drastically cut oil imports since the war began in March, freeing up barrels for other buyers and keeping a lid on global prices.
Asset Impairment
Sinopec set aside provisions for asset impairment of 16 billion yuan as a result of oil and fuel price volatility in the first half of 2026. The company said Beijing has forced refiners to absorb the oil price shock by limiting their ability to pass higher oil prices through to fuel consumers. Domestic fuel price hikes lagged the surges in crude oil cost, yet Sinopec still achieved a higher refining margin.
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Sinopec H1 profit rises 19.3% despite Iran war, weak fuel demand
