Sinopec Says Has Enough Oil Inventory to Ensure Stable Production for Now

By Fabiana Negrin Ochoa and Sherry Qin

Chinese oil major Sinopec struck a cautious tone during a post-earnings briefing, saying it has enough inventory to maintain stable production and multiple contingency plans in place as the conflict in the Middle East stokes worries about countries running out of fuel.

However, it said that a prolonged conflict would pose more severe challenges.

At the briefing on Monday, executives at Sinopec, officially known as China Petroleum & Chemical Corp., addressed the recent geopolitical conflicts, saying the Middle East crisis has significantly disrupted the global economic and trade landscape, particularly shipping in the Strait of Hormuz.

About 20% of the world's oil transits through the waterway between Oman and Iran, and Sinopec said the route's blockage poses significant challenges to its operations. Sinopec Vice Chairman Zhao Dong said that some of its crude oil resources in the Gulf could not be transported out, hurting supply.

For now, the energy group said it has enough crude and refined oil stockpiled to ensure smooth output and operations, affirming that it has secured enough resources for the second quarter.

It plans to optimize production to meet domestic demand, but warned that an extended Middle East conflict poses headwinds to the company's refining and chemical business. It has developed multiple contingency plans for different scenarios.

The company has expedited the purchase of crude from Saudi Arabia via ports in the Gulf of Aden by adjusting pipeline routes to avoid the strait. It is also expanding oil sources outside the Middle East.

Shares of Sinopec finished the day 0.7% lower in Shanghai after it posted a drop in 2025 net profit. H-shares lost 3.2%.

Also on Monday, Chinese authorities announced temporary increases to domestic gasoline and diesel prices to reflect the rise in global prices.

The three major oil companies--China National Petroleum Corp., Sinopec, and China National Offshore Oil Corp.--as well as other crude-processing enterprises, are required to ensure refined oil production and distribution to guarantee stable market supply, and strictly implement national pricing policies, the National Development and Reform Commission said.

--Jiahui Huang contributed to this report

Write to Fabiana Negrin Ochoa fabiana.negrinochoa@wsj.com and Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

March 23, 2026 06:13 ET (10:13 GMT)