China Petroleum & Chemical Corporation (Sinopec) warned that high crude prices and shipping costs will create significant headwinds for its refining segment in the fourth quarter of 2026, despite a sharp rebound in third-quarter earnings, company executives stated during an earnings briefing.
Sinopec Chief Financial Officer Shou Donghua said persistent uncertainty over navigation through the Strait of Hormuz and geopolitical conflicts in the Middle East continue to keep international crude and freight markets elevated. The company projects crude procurement premiums, freight, and insurance costs will stay at or above $15 per barrel in the fourth quarter and could exceed $20 per barrel in December, up from $4.29 per barrel in the third quarter.
The warning followed a strong third quarter in which Sinopec reported net profit attributable to shareholders of 13.36 billion yuan ($2.01 billion) under Chinese accounting standards—a 57.2% year-on-year increase—and 13.6 billion yuan under international reporting standards, up 63.6%. Quarterly revenue rose 9.3% to 769.7 billion yuan, driven by wider refining spreads and higher yields of high-value products such as jet fuel and naphtha.
However, the refiner highlighted continued domestic demand weakness, with China's refined oil product consumption falling 8.6% year-on-year in the first nine months of the year due to high fuel prices and accelerating electric vehicle adoption. Sinopec's crude processing throughput dropped 10.2% to 167.37 million tonnes over the nine-month period.
Sources
- Quantum Commodity Intelligence · 2026-10-30
