Sinopec Beats Expectations as Refining Margin Surges Amid Global Disruption

Despite being exposed to the worst supply crisis in history due to the Middle East conflict and falling demand for fuel domestically, China's Sinopec reported a 19.3% year-on-year increase in net profit for the first half of 2026. The company processed 5.6% less crude oil between January and June versus the same period last year, at 113.31 million metric tons, or 4.57 million barrels per day (bpd). However, its refining margin was up 44.1% on the year in the first half of 2026, a surprising jump given domestic fuel price hikes lagged the surges in crude oil cost.

Sinopec's result is all the more surprising given how exposed it was to the Strait and the way in which Beijing has forced the refiner, and others like it, to absorb the oil price shock by limiting their ability to pass higher oil prices through to fuel consumers. The company said it 'closely monitored changing conditions, dynamically adjusted production and operating arrangements, and effectively responded to unexpected shocks and challenges on multiple fronts.'

The chemicals segment remained loss-making, recording an operating loss of over 200 million yuan, but losses narrowed sharply by around 4 billion yuan. Output of ethylene, a key building block for petrochemicals, sank 15.5% on the year to 6.4 million tons in the first half.