Higher oil prices lift China's oil majors in H1 2026, but earnings gains diverge

Geopolitical tension pushed average Brent prices up 23.7% year on year, and together the three companies earned close to RMB 1.2 billion a day, with all three posting double-digit profit growth. But how that profit was made looked quite different at each company.

| Three companies, three different stories

CNOOC benefited the most directly from higher oil prices. As a company focused almost entirely on production, it kept more of the extra revenue, with net profit up 23.4% and its profit margin the highest in the industry. PetroChina had the broadest base of earnings, drawing on production, gas sales, refining and new materials all at once, and its profit topped RMB 100 billion in a first half for the first time. Sinopec grew profit the fastest of the three, but leaned more heavily on one segment, refining, while its retail fuel and chemical businesses stayed weak.

| Production stayed the main profit driver

Production remained the strongest part of the business for all three companies, mainly because of higher oil prices, not higher output. CNOOC's production profit rose sharply as both output and prices increased. PetroChina's production profit grew mostly because of higher prices. At Sinopec, stronger production profit helped offset weaker demand for fuel and chemicals elsewhere in the business.

| Refining had an unusually strong run

Refining profit jumped sharply at both PetroChina and Sinopec, even though both companies processed less crude than a year earlier. Tighter global fuel supply widened the margin between crude oil and finished fuel, giving refiners a rare profit boost despite falling volumes. Sinopec captured this most clearly, more than quadrupling its refining profit by producing more premium products such as jet fuel. PetroChina's refining profit grew too, but at a slower pace, since it shifted more of its crude toward chemicals and new materials instead of fuel.

| Chemicals recovered, and fuel sales fell

Chemical businesses improved at both companies despite still-high oil prices. Sinopec narrowed its chemical losses by cutting output and selling more abroad, while PetroChina doubled its chemical profit on stronger demand for higher-value products. On the sales side, high fuel prices and the growing use of electric vehicles pushed domestic fuel demand lower at both companies, with diesel falling the most. Sinopec's fuel sales business was the one part of its business to actually lose profit compared with a year earlier, while PetroChina's overall sales profit still grew, helped by strong growth in LNG truck refuelling and gas sales.

| Spending priorities are shifting

All three companies are putting more capital into production in the second half of the year, to support long-term energy security and keep domestic crude output above 200 million tonnes a year. At the same time, spending on refining and chemical capacity is being cut back sharply, with capital shifting from adding new capacity to upgrading existing plants and building higher-value chemical and new-materials products. Investment in traditional fuel stations is also being scaled back, in favour of gas, hydrogen and other lower-carbon energy services.

Higher oil prices lifted every major Chinese oil company's earnings in H1 2026, but the source of that profit varied. CNOOC gained the most directly from prices, PetroChina benefited from having a wide spread of businesses, and Sinopec leaned heavily on an unusually strong refining margin to offset weaker fuel and chemical demand. With fuel demand under pressure from high prices and electric vehicles, all three companies are now directing more capital toward production and higher-value chemicals, and less toward traditional refining capacity and fuel retail.

The above content is the major conclusions and highlights extracted from the "Higher Oil Prices Lift China's Oil Majors in H1 2026, but Earnings Gains Diverge" chapter of the latest China Policy Perspective (produced by GL Consulting).

The full chapter includes detailed policy comparison tables, an impact assessment across 16 market segments, and strategic recommendations for investment, trading and partnerships.

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