Sinopec's First-Half Profit Rose Amid Continued Energy-Market Uncertainty

By Jason Chau and Megan Cheah

China Petroleum & Chemical Corp.'s net profit rose in the first half as higher oil prices stemming from the Middle East conflict boosted its results.

China's biggest oil refiner, better known as Sinopec, said Sunday that net profit for the first six months was 25.63 billion yuan, equivalent to $3.81 billion, rising 19% from the same period a year ago, under Chinese accounting standards.

Revenue also gained, rising 2.0% from a year earlier to 1.437 trillion yuan.

Sinopec, the first of China's three major energy companies to report interim results, attributed its stronger profit to higher oil prices, as well as the company stepping up upstream development efforts and its production of high value-added products such as jet fuel.

The increase in revenue was largely due to higher petroleum and petrochemical prices on rising crude prices.

The company's earnings came amid continued uncertainty over the war in the Middle East, where fighting has repeatedly flared up as the U.S. and Iran clash over control of the Strait of Hormuz. The key energy transit route has effectively been closed since the conflict began, blocking energy flows and pushing crude-oil and gas prices higher.

While negotiations between the two countries continue, a diplomatic resolution over the Strait remains elusive.

In its earnings report, Sinopec said that the spot price of Platts Brent crude averaged $92.60 a barrel during the first half, up 29% year over year

Still, the jump in crude prices has been much smaller than commodities analysts initially expected at the start of the war, prompting traders to speculate whether Chinese demand destruction may be capping further price gains.

Given Sinopec's focus on refining and chemicals production, analysts said investors may be more focused on trends in refining margins, chemicals profitability and inventory adequacy, rather than the headline numbers, Morningstar director Chokwai Lee said.

"While upstream earnings are largely driven by oil prices, the key swing factors for Sinopec are often the performance of its refining and chemicals businesses," he said.

Sinopec said domestic consumption of refined oil products decreased by 8.6% as high oil prices weighed on demand and drove substitution by new energy. Natural gas consumption grew 1.6% on year.

Write to Jason Chau at jason.chau@wsj.com and Megan Cheah at megan.cheah@wsj.com

(END) Dow Jones Newswires

August 23, 2026 20:55 ET (00:55 GMT)