China National Petroleum, responds to high oil price impact!

【Introduction】Sinopec executives respond to high oil prices; refined oil sales remain generally stable

China Fund Reporter Wen Yan

At the March 23rd performance briefing for 2025, several Sinopec executives addressed the impact of high oil prices and their response measures.

Huo Qijun, Chairman of Sinopec, stated that since the escalation of Middle Eastern geopolitical conflicts, the company has closely monitored market conditions, promptly optimized and adjusted plant loads, maintained overall production and operations stability, and met domestic market demand for oil products.

“Refined oil sales are generally stable, and upstream operations can achieve good benefits under current oil prices,” said Wan Tao, Director and President of Sinopec. Currently, the company’s crude oil and refined oil inventories can ensure stable production and operations.

Wan Tao further explained that due to significant increases in crude oil prices, tight import resources, and high freight costs, Sinopec’s refining and chemical operations face considerable challenges.

“If the Middle Eastern geopolitical conflict persists for a long time, it will pose a huge challenge to the company’s refining and chemical businesses,” Wan Tao said. The company has developed multiple contingency plans to address challenges under different scenarios.

According to the official website, Sinopec is one of China’s largest integrated energy and chemical companies, mainly engaged in oil and natural gas exploration and extraction, pipeline transportation, sales, refining, petrochemicals, coal chemicals, fiber, and other chemical products production and sales, storage and transportation, as well as import and export of oil, natural gas, petroleum products, petrochemicals, and other commodities and technologies.

By 2025, Sinopec will continue to strengthen exploration and efficient development in new areas, increase the application of enhanced recovery technologies, strengthen cost control, and solidify its oil and gas reserves foundation. The replacement rate of crude oil reserves is 103%, and natural gas reserves replacement rate is 112%.

Huo Qijun stated that in the future, Sinopec will adhere to the integrated development of oil and non-oil sectors, focus on strategic breakthroughs in large basins such as Sichuan and Tarim, cultivate large-scale reserve growth bases; continue to intensify fine-tuning efforts in eastern old areas, Fuling, Puguang, and others; uphold a low-cost strategy, and fully enhance oil and gas resource reserves.

Regarding the damage to Qatar LNG (liquefied natural gas) facilities and reduced exports, Huo Qijun said that the short-term supply interruption of Middle Eastern LNG resources has a limited impact on Sinopec.

Sinopec will continue to increase natural gas production, diversify resource channels, closely monitor market conditions, and promptly optimize and adjust operational strategies to ensure the smooth operation of the entire natural gas industry chain and guarantee stable market supply.

Huo Qijun mentioned that domestic demand for chemical products is expected to continue growing in 2026, with new capacities in China steadily coming online. However, structural oversupply in the chemical market persists, compounded by the sharp rise in oil and naphtha prices caused by Middle Eastern conflicts, putting significant pressure on chemical gross margins.

Huo Qijun emphasized that Sinopec will strengthen analysis of international and market trends, respond quickly, and make dynamic adjustments to production and operations. The “one plant, one policy” approach will optimize plant loads and product structures to maintain stable and orderly operations.

On March 23rd, Sinopec’s A-shares closed at 6.04 yuan per share, with a total market value of 681.5 billion yuan.

Editor:

Zhao Xinliang

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