Sinopec Diversifies Oil Imports Amid Middle East Conflict

Chinese refiner Sinopec is diversifying its oil sourcing to offset supply disruptions caused by Middle East conflict. The company will increase imports from Brazil and Africa, while maintaining ties with stable producing nations like Saudi Arabia and the UAE.

Sinopec reported a 19% rise in first-half net profit despite exposure to oil supply disruptions and government curbs on passing higher oil prices to consumers. However, its second-quarter refinery throughput dropped 17%, and domestic refined fuel sales fell by 18%.

The company has sufficient crude oil stocks for 20 days of processing and refined fuel for 15 days of sales. To maintain flat processing volumes in the second half, Sinopec's annual crude throughput needs to be about 4.52 million barrels per day, down 10% from 2025.

Sinopec plans to allocate around 20% of its capital spending on new energy and new materials over 2026-2030. The company is also preparing for a potential decline in fuel demand, with China's oil consumption possibly having peaked last year.