PetroChina Profit Rises, Revenue Falls Amid Energy Shock From Iran Conflict

By Jason Chau

PetroChina's net profit rose slightly in the first quarter, supported by increased sales of its gas and refined products despite lower revenue amid the global energy shock triggered by the war in Iran.

The listed arm of state-owned China National Petroleum Corp. said net profit rose 1.9% to 48.33 billion yuan, equivalent to $7.07 billion, for the three months ended March. The rise was driven primarily by higher natural gas sales volumes, as well as stronger sales volumes and margins for oil and chemical products, it said.

Quarterly revenue declined 2.2% from a year earlier to 736.38 billion yuan.

Wednesday's results are the first from the oil-and-gas major since the outbreak of the Middle East conflict in late February. The U.S.-Israel war with Iran has significantly damaged regional energy production capacity and caused major disruptions to shipments through the Strait of Hormuz, a vital global energy transit route.

Despite soaring energy prices brought on by the conflict, the group's average realized crude oil price weakened during the quarter, dropping 8.5% to $64.08 a barrel.

Analysts have said that the war could have a mixed impact on PetroChina, which has a strong presence in both upstream production and downstream refining.

The company has the largest Middle East production exposure among China's energy majors, with its oilfields in Iraq facing output cuts due to storage constraints and infrastructure damage, S&P Global Ratings analysts wrote in a recent note.

Feedstock shortages from blocked shipments are also reducing refining throughput, while high oil prices are squeezing refining margins, they said.

According to Citi analysts, however, the company could benefit from disruptions to liquefied natural gas exports from the Gulf. The cost advantage of PetroChina's gas production and pipeline network over the Japan Korea Marker--a benchmark for LNG spot prices in East Asia--is widening, strengthening its position.

PetroChina has also been actively acquiring exploration projects and ramping up its oil and gas output, in line with Beijing's policy to expand energy reserves and bolster energy security. Total oil and gas production reached 470.2 million barrels last quarter, up 0.7%.

Still, demand for refined oil products in China is facing a structural decline as the country rapidly builds out its renewable-energy infrastructure and undergoes a broader shift away from fossil fuels--a trend that could accelerate due to the Iran war.

Both Sinopec and Cnooc--PetroChina's main refining rival and upstream-focused competitor, respectively--posted stronger earnings earlier this week, supported by higher energy prices.

Write to Jason Chau at jason.chau@wsj.com

(END) Dow Jones Newswires

April 29, 2026 06:53 ET (10:53 GMT)