China’s largest refiner Sinopec has reported a significant first-half (H1) profit slump, as declining oil prices, lower output of some products and weaker margins impacted the company’s financial performance.
Net income fell by 36% to 23.75bn yuan in the six months through June, as reported by Bloomberg, citing a filing.
This update comes after Sinopec, also known as China Petroleum & Chemical Corporation, had warned investors of an expected profit drop.
The refiner has also decided to reduce its full-year capital spending plan by around 5%, having previously targeted expenditure of 164.3bn yuan for the year.
In H1 2025, Sinopec spent 43.8bn yuan. The company faces multiple challenges this year, including reduced gasoline and diesel production due to the rapid spread of electric vehicles and intense competition within the industry.
Despite these challenges, Sinopec anticipates growth in demand for natural gas and chemical products in China during H2.
However, refined oil products are expected to continue facing competition from alternative energy sources.
The company is aiming for oil processing of 130 million tonnes (mt) for the second six months, up from 120mt in H1.
Globally, the average price of crude benchmark Brent was around $71 a barrel (bbl) during this period, down from $83/bbl last year.
This decrease in import prices has led to a reduction in the value of inventories but has also eased feedstock costs.
Sinopec’s drilling activities have remained stable, in line with Beijing’s goal of ensuring energy security.
The company’s refining unit saw profits fall to 2.6bn yuan from 6.4bn yuan last year, while its chemical operations reported a loss of 4.5bn yuan, compared to 3.6bn yuan the previous year.
The upstream drilling division reported a 21bn yuan profit, a decrease from the 26.8bn yuan earned last year.
Additionally, the marketing and distribution unit faced pressure from lower prices, with profits dropping to 7.2bn yuan.
In a separate development, Sinopec announced in May 2025 that its Tiebei 1HF well at Project Deep Earth – Sichuan and Chongqing Natural Gas Base had achieved a vertical depth of more than 5,300m.
