October 30, 2026
Major Chinese energy companies recorded a noticeable jump in their quarterly profits, supported by the rise in global oil prices as a result of the ongoing conflict in the Gulf region. This provides it with a financial haven to finance plans to expand local production and enhance energy security.
The results of the third quarter indicated that PetroChina and Sinopec benefited directly from the exploration and production sectors, while refining and marketing activities showed high flexibility despite the sharp contraction in local demand for transportation fuels. CNOOC is scheduled to announce its financial results later on Friday.
These gains coincide with Beijing’s announcement, at the beginning of this month, of a comprehensive strategy to consolidate energy security over the next decade, a step to which the three energy companies responded by revealing ambitious plans to raise production levels and develop strategic reserves of oil and gas.
With China relying on importing about 70% of its oil needs and 40% of its natural gas, global supply disruptions – especially through the Strait of Hormuz – constitute a major challenge to its national security, in addition to the urgent need to replace commercial stocks that were damaged by the prolonged crises in the Middle East.
In response to these developments, a memo issued by investment bank Jefferies, following a briefing to executive officials on Thursday, stated that PetroChina, as the largest oil producer in the country, plans to pump annual investments exceeding 40 billion yuan (equivalent to about 6 billion dollars) in local exploration operations until 2030.
On a related level, the prospects for the refining and petrochemical sector are witnessing a gradual improvement coinciding with the decline of the supply glut, which allows companies to maximize their returns by moving towards foreign markets. Sinopec’s export margins recorded high levels of $65 per barrel during the third quarter, compared to narrow domestic margins that ranged between $10 and $25 per barrel for gasoline and diesel, according to Citigroup data.
