How did Sinopec achieve a 19.3% year-on-year net profit growth in H1 2026 despite Middle East conflict, Strait of Hormuz closure, and falling domestic fuel demand?

Sinopec achieved the 19.3% net profit growth by significantly improving its refining margin (up 44.1% year-on-year to 453 yuan per metric ton), broadening crude oil sourcing outside the Middle East, closely managing purchase timing in line with market conditions, and optimizing its product mix based on profitability — all while absorbing oil price shocks due to Beijing's restrictions on passing higher costs to consumers.

What was the impact of the Middle East conflict and Strait of Hormuz closure on Sinopec’s operations in H1 2026?

The Middle East conflict caused sharp volatility in international crude oil prices and a substantial increase in imported crude procurement costs; as Sinopec relies on the Middle East for half its crude oil needs and the Strait of Hormuz — its key import route — remained largely closed since March, the company faced the worst supply crisis in history, leading to a 5.6% year-on-year decline in crude oil processing to 113.31 million metric tons.

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