China Petroleum & Chemical Corp (Sinopec Corp), the world's largest oil refiner, reported a 20.1% drop in net profit for the first six months of 2022 compared to the same period last year.
Net profit fell to 35.11 billion yuan ($4.82 billion) for the January-June period due to lower crude oil prices, the company said in a filing on Sunday. Revenue declined slightly by 1.1% to 1.59 trillion yuan over the year ago level.
Despite the profit decline, Sinopec processed more crude during the period. Refinery throughput rose 4.8% to 126.54 million tons while refined fuel sales increased 18.5% to 116.6 million tons as fuel demand in China extended its recovery.
Chinese refiners have benefitted from discounted Russian, Venezuelan and Iranian oil amid Western sanctions. Sinopec has imported Russian crude, helping lift processing volumes.
However, refining margins fell 33.6% to 354 yuan per ton for the first half due to lower feedstock prices. Sinopec is stepping up exploration and production in challenging fields to boost reserves.
The profit drop highlights challenges faced by Chinese energy giants from weaker crude oil markets. Sinopec shares have outperformed the broader Hong Kong market so far in 2022.
