Sinopec reports 19% profit jump in H1 2026 despite Middle East crisis

China's state-owned oil refiner, Sinopec Shanghai Petrochemical Co Ltd Class A (SS:600688), reported a significant 19.3% increase in net profit for the first half of 2026, reaching 25.63 billion yuan ($3.81 billion). This marked a substantial jump from 21.48 billion yuan during the same period last year. The company attributed the profit surge to its ability to diversify its oil sourcing away from the volatile Middle East market, despite the Strait of Hormuz remaining largely closed since March.

Sinopec managed this by adjusting its purchase timing based on market conditions and optimizing its product mix for profitability. The company processed 113.31 million metric tons of crude oil, equivalent to 4.57 million barrels per day, marking a 5.6% decrease compared to the previous year. Their refining margin saw a 44.1% year-on-year increase, climbing from 139 yuan to 453 yuan per metric ton.

However, domestic fuel demand has dropped, and Beijing has capped the company's ability to raise fuel prices to consumers due to higher oil costs.