In the first half of this year, China National Petroleum Corporation (CNPC) faced a rare situation of both operating income and net profit declining for the first time in five years, influenced by the continued downward trend in international oil prices and weak demand in the Chinese market. Meanwhile, China Petroleum & Chemical Corporation (Sinopec) saw a 39.8% year-on-year drop in net profit in the first half of the year, reflecting the significant challenges faced by these two petrochemical giants.
On the evening of August 26, China National Petroleum Corporation (CNPC) released its financial report for the first half of 2025. The data revealed that the company achieved operating income of 1.45 trillion yuan in the first half of the year, a 6.7% decrease compared to the same period last year. The net profit attributable to the parent company’s shareholders was 840.1 billion yuan, down by 5.4% year-on-year.
This marks a situation where CNPC has experienced synchronized declines in revenue and net profit once again since mid-2020.
The company stated in its financial report that the main reason for the decline in performance was the significant drop in prices of core products like crude oil and refined oil.
In the first half of this year, the international crude oil market performed poorly. The spot prices of Brent crude oil and WTI crude oil dropped by 14.5% and 14.4% year-on-year respectively. The sharp fall in oil prices directly impacted CNPC’s profit performance, with the company realizing an average crude oil price of $66.21 per barrel, a 14.5% decrease year-on-year.
Data showed that among the company’s eight major products for external sales, half of them experienced a year-on-year decline in sales volume, with polypropylene, gasoline, and diesel products showing the most significant decline. In addition, the average selling prices of the six major products for external sales generally decreased, with crude oil and diesel prices falling by 12.3% and 9.4% year-on-year to 3,690 yuan per ton and 6,213 yuan per ton respectively.
At the same time, due to the rapid development of new energy vehicles and accelerated competition from alternative energy sources, the consumption of gasoline and diesel in China continued to be suppressed, leading to a sluggish growth in traditional fuel demand.
Furthermore, the prices of major chemical products also faced downward pressure due to the fall in international oil prices, keeping production profits at a relatively low level.
Looking at the specific performance of the company’s four major business segments, only the natural gas sales segment showed a counter-trend increase. On the other hand, the other three business segments all experienced varying degrees of profit decline. The oil and gas as well as new energy segment saw operating profit decrease by 6.8% to 85.686 billion yuan; the refining and chemical as well as new materials segment saw a profit drop of 18.9% to 11.056 billion yuan; and the sales segment witnessed a significant 25.2% decrease in operating profit to 10.104 billion yuan. The sales segment recorded the largest decline in profit, reflecting the intense competition in the end-market.
The predicament faced by CNPC is not unique, as the entire petrochemical industry is grappling with similar market challenges.
China Petroleum & Chemical Corporation (Sinopec) also disclosed its half-year report on the evening of August 21. The company’s operating income in the first half of the year decreased by 10.6% year-on-year to 1.41 trillion yuan, while the net profit attributable to the parent company declined by 39.8% year-on-year to 214.83 billion yuan. Sinopec attributed the declines in revenue and net profit to the downward fluctuation in international crude oil prices, decreased domestic demand for gasoline and diesel, and weak profitability in the chemical industry.
According to Sinopec’s statistics, in the first half of this year, international oil prices fluctuated downwards, with the spot price of Brent crude oil dropping to $71.7 per barrel. On the consumption side, domestic demand for refined oil products was mainly affected by alternative energy sources, with consumption volume decreasing by 3.6% year-on-year, including a 4.6% drop in gasoline consumption and a 4.3% drop in diesel consumption.
In terms of related businesses, Sinopec reported a decrease of 11% in its main business revenue compared to the same period last year, as a result of declining prices of petroleum and petrochemical products as well as reduced sales volume of refined oil products. Among the top ten petroleum and petrochemical products that Sinopec mainly exports in the first half of the year, half of them experienced a decline in sales volume, with crude oil, kerosene, and diesel products seeing the largest drops. All major export products saw an average price decrease, with basic chemical raw materials, kerosene, and diesel leading the way in declining prices.
The announcement revealed that the revenue from Sinopec’s external sales of petroleum products accounted for nearly 60% of the company’s total revenue, reaching 807.9 billion yuan, a 12% year-on-year decrease. The revenue decline was primarily due to the simultaneous decrease in sales revenue of key products like gasoline, diesel, and kerosene. The sales revenue of these three major products plummeted by 13.1% to 669 billion yuan, still representing over 80% of the company’s petroleum product sales revenue.
The current peak status of domestic refined oil products has brought significant impacts to the industry chain enterprises. Ro Jin, Director of Asia-Pacific Polyester at Wood Mackenzie, introduced that as the core battleground for energy transition, the gasoline demand in the Chinese market reached its peak in 2023, and the decline is expected to accelerate after 2030; overall oil demand is projected to peak in 2028.
CNPC and Sinopec, known as China’s “two barrels of oil,” are both wholly state-owned energy enterprises directly under the State Council of China. CNPC focuses on domestic oil and gas exploration, development, and pipeline transportation; while Sinopec emphasizes refining and petrochemical operations as well as sales of refined oil products, forming a market pattern known as “Northern Petro-China, Southern Sinopec.”