Sinopec Reports 19.3% H1 Profit Increase Despite Lower Refining Volumes

China oil giant Sinopec reported an unexpected 19.3% year-on-year (YoY) increase in net profit for the first half of 2026, despite challenges including the Middle East conflict and weakening domestic fuel demand. The company also said it had written down its inventories by 16 billion yuan, Reuters reported.

Net profit for the January-June period reached 25.63 billion yuan ($3.81 billion) under Chinese accounting standards, compared with 21.48 billion yuan a year earlier, Sinopec said in a filing with the Shanghai Stock Exchange reported by Reuters.

Sinopec processed 113.31 million metric tons of crude oil during the first half, equivalent to about 4.57 million barrels per day (mmbbl/d), down 5.6% from the same period last year.

The company said its refining margin rose 44.1% year on year to 453 yuan per metric ton, an increase of 139 yuan per metric ton. The gain came despite domestic fuel price increases lagging behind the surge in crude oil costs.

Operating profit in Sinopec’s refining segment increased 381.5%, supported by broader crude oil sourcing outside the Middle East, closer management of purchase timing in response to market conditions, and optimization of its product mix based on profitability, according to the filing.

China has sharply reduced oil imports since the war began in March, freeing up barrels for other buyers and helping to limit global price increases.

The conflict began in March with Israeli strikes on Iran, followed by Iranian missile and drone attacks on Israel and the involvement of the United States. Fighting disrupted shipping and energy infrastructure across the region, raising concerns about oil supplies and prompting refiners to seek alternative sources.