Oil & Gas

Sinopec will increase crude oil purchases from Brazil, Africa and other regions as it seeks to mitigate supply disruptions caused by the conflict in the Middle East, company executives said on Monday following the release of its interim results. Despite its significant exposure to the disruptions and government restrictions on passing higher oil prices on to consumers, Sinopec reported a 19% increase in first-half net profit.

The Chinese oil refiner also plans to strengthen ties with stable oil-producing countries such as Saudi Arabia and the United Arab Emirates. Chairman Hou Qijun said Sinopec would use “all possible means” to secure crude supplies, including sourcing oil through Saudi Arabia’s Red Sea port of Yanbu and accessing UAE crude transported by pipeline to loading points outside the Gulf.

Sinopec currently holds enough crude oil stocks for about 20 days of processing and refined fuel inventories equivalent to around 15 days of sales, President Wan Tao said. He did not provide details on whether the company was using government-controlled oil reserves, saying only that Sinopec would follow the relevant rules when tapping strategic stockpiles. The company’s second-quarter refinery throughput fell 17% from the first quarter, while domestic refined fuel sales declined 18%.

Looking ahead, Sinopec plans to invest about 20% of its capital expenditure, or more than 30 billion yuan annually, in new energy and new materials between 2026 and 2030. The strategy reflects growing concerns over declining fuel demand and excess petrochemical capacity. Company officials said China’s oil consumption may have peaked last year, while refined fuel demand is expected to fall by 8% this year, following a similar decline in the first half.