China’s top refiner posted a strong first quarter as higher crude prices lifted inventory values and stable domestic fuel sales helped to offset pressure from disrupted Middle East supply.
China Petroleum & Chemical Corporation (Sinopec) reported first-quarter net income of 17 billion yuan ($2.49 billion), up 28% from a year earlier, according to a Shanghai exchange filing. The results land as major oil companies begin showing how the Iran-driven supply shock is feeding through earnings.
Throughput at Sinopec slipped 0.2% year over year to 62.02 million metric tons, or 5.03 million barrels per day (bpd), while refined fuel sales edged down 0.2% to 55.46 million tons. Domestic sales, however, rose 0.6%. China had capped domestic fuel price increases twice during the quarter, limiting margin upside for refiners as crude prices climbed.
The company cut its March refining runs by 5% as the war disrupted Middle East crude flows, yet still grew profit sharply.
Upstream helped carry the quarter. Oil and gas output rose 0.4% to 131.5 million barrels of oil equivalent (boe). Domestic crude production rose 1%. Natural gas output also edged upward.
Capital spending moved sharply higher. Sinopec spent 25.17 billion yuan in the quarter, up from 18.25 billion yuan a year earlier, with 62% directed to upstream oil and gas projects.
Chemicals remained a weak spot. Ethylene output fell 8% as petrochemical margins stayed under pressure.
BP on Tuesday also reported a strong Q1 performance as higher oil and gas prices boosted results, reinforcing how integrated majors with upstream exposure are benefiting from volatility even as supply disruptions strain consuming economies.
By Julianne Geiger for Oilprice.com
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