Sinopec Sees Fuel Demand Plunge Amid High Oil Prices and EV Surge
China's largest oil refiner, Sinopec, reported a significant decline in fuel demand due to high oil prices and increased adoption of electric vehicles. According to its earnings report, gasoline consumption fell by 7.9% and diesel by 12% in the first half of the year. Chemical products also saw a decline, with ethylene and its equivalents down 9.9% from the same period last year.
The company's refining output dropped 5.6% to 113 million tons, and it expects to maintain this level in the second half, indicating muted hopes for an increase in demand. However, higher oil prices boosted revenue for Sinopec's well-head production and increased the value of its stored oil.
The company's shares rose as much as 1.5% in Hong Kong on Monday. Citigroup analysts believe that Sinopec could see improved margins in the second half due to potential access to cheap Russian crude and lower premiums for Middle East supply.