Chinese refiner Sinopec (0386) will increase the sourcing of its oil from Brazil, Africa and beyond to contend with supply disruptions caused by Middle East conflict, company executives said on Monday after reporting interim results on Sunday.
Sinopec had posted a 19 percent rise in first-half net profit despite its heavy exposure to the oil supply disruptions and government curbs on passing higher oil prices on to consumers.
The company will continue to deepen relations with "stable" producing nations such as Saudi Arabia and the United Arab Emirates, it said.
Sinopec "will try all possible means" to secure crude oil, including from Saudi's Red Sea port of Yanbu and UAE oil exports piped to loading points outside the Gulf, Chairman Hou Qijun told an earnings briefing in Hong Kong.
The refiner has crude oil stocks for 20 days of processing and refined fuel for 15 days of sales, Sinopec President Wan Tao said.
Wan did not disclose details on the use of government-controlled oil stockpiles, apart from saying the company will follow the rules for tapping reserves.
Sinopec's second-quarter refinery throughput slumped 17 percent from the first quarter and domestic refined fuel sales tumbled by 18 percent, a stock market filing showed on Sunday. To maintain flat processing volumes in the second half, its annual crude throughput needs to be about 4.52 million barrels per day, down 10 percent from 2025, Reuters calculations show.
The company plans to allocate about 20 percent of its capital spending, or more than 30 billion yuan a year, on new energy and new materials over 2026 to 2030, Hou said, as the state giant quares up to the challenges of falling fuel demand and petrochemicals overcapacity.
China's oil consumption may have peaked last year and refined fuel use is expected to fall by 8 percent this year after registering a similar year-on-year decline in the first half, outpacing a forecast 4-5 percent drop, company officials said.
Reuters
