Chinese oil giants are posting record profits on soaring fuel and economy

PetroChina Co, Sinopec and Cnooc Ltd reported historic earnings for the January-June period.

The coronavirus lockdown, property market crisis and domestic economic slowdown were not enough to slow down China’s oil giant, which posted record first-half profits.

PetroChina Co., Sinopec and Cnooc Ltd. each said they earned historic sums in the January-June period.

Businesses are looking to an upturn in the economy to strengthen future performance. PetroChina’s chairman said government stimulus measures are boosting oil demand, and top refiner Sinopec expects domestic fuel sales to rise 11% in the second half of the year compared to the first half.

“China’s economic growth is expected to pick up and remain within a reasonable range,” Sinopec said on Sunday. “Domestic demand for refined petroleum products and chemicals is expected to recover, while demand for natural gas will continue to grow.”

Yet both companies warn the global economy faces threats from stagflation and geopolitical tensions, the latter likely to keep energy prices volatile. Averaged $105 a barrel for the month, more than 60% higher than the same period in 2021, giving producers a windfall after years of falling prices.

Corporate spending plans should also help government efforts to stimulate the economy. All three companies increased their capital expenditures in the first six months, with PetroChina and Sinopec seeing higher spending in the second half as they look to continue increasing oil and gas production to meet China’s energy security needs. We expect it to accelerate rapidly.

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