Sinopec Reports Profit Rise as Oil Prices Climb Amid Iran War

By Jason Chau

China Petroleum & Chemical Corp's net profit rose in the first quarter as international crude oil prices jumped due to the conflict in the Middle East.

The Chinese oil-and-gas major--better known as Sinopec--said late Tuesday that net profit for the first three months of the year climbed 27% to 17.74 billion yuan, equivalent to $2.59 billion.

Meanwhile, quarterly revenue decreased 3.9% from a year ago to 706.70 billion yuan.

Sinopec's earnings are its first set of results that capture the impact of the war in Iran on its business. The conflict has led to the closure of the Strait of Hormuz, a key energy transit route, disrupting flows and driving up the cost of crude oil and gas.

The company said that the spot price of Platts Brent crude averaged $80.60 a barrel during the quarter, up 6.5% year-on-year.

Domestic demand for natural gas increased by 3.1% over the period, it noted, though domestic consumption of refined oil products decreased by 2.3%, mainly affected by alternative energy. Demand for chemicals went up steadily.

The energy major said that it strengthened market research in response to the impact of the Middle East conflict, adjusting production and operation arrangements to maintain steady operation across the industrial chain.

Analysts at S&P Global Ratings see Sinopec as vulnerable to operational disruptions given its heavy dependence on feedstock imports sourced from the Middle East.

The crisis, which broke out in late February, has prompted Beijing to instruct refiners, including Sinopec, to suspend diesel and gasoline exports. Government price caps on refined products aimed at preserving fuel-price stability are also squeezing refining margins, the analysts wrote in a recent note.

Sinopec said in its earnings report that it has intensified exploration and development efforts, striving to increase production. It said it has made significant breakthroughs in gas and coalbed methane projects, and accelerated the construction of key sites.

The refiner reported total oil and gas production at 131.49 million barrels of oil equivalent in the first quarter, up 0.4% on the year. Its capital expenditure reached 25.17 billion yuan.

Write to Jason Chau at jason.chau@wsj.com

(END) Dow Jones Newswires

April 28, 2026 21:08 ET (01:08 GMT)