Sinopec’s net profit falls 6.9% in 2022 as Covid hurts fuel demand

By Luther Animashaun

Chinese oil giant, Sinopec, recorded a 6.9  decline as its net profit plunged to $9.65 billion, or 66.30 billion yuan in 2022, compared to $10.47 billion, or 71.21 billion yuan in 2021, as the negative impact of Covid lockdowns that stormed China’s economy last year weakened fuel and chemicals demand.

A statement by  Ma Yongsheng, the chairman of Sinopec, said the  company’s performance was impacted by complications in 2022, that included global economic slowdown, geopolitical conflicts and weak domestic market demand.

Yongsheng, however, noted that revenues were up by 21 percent, reaching $483 billion, or 3.32 trillion yuan. He added that oil production at home hit a record high last year, at 35.32 million tonnes, with natural gas production also up, to 35.37 billion cubic metres.

For this year, Sinopec plans to take advantage of China’s return to business as usual, with oil and fuel demand set to recover, along with demand for petrochemicals.

China’s post-lockdown recovery is cited by most analysts as the biggest factor in future oil price movements and the reason for many bullish price predictions. The bullishness of these predictions is based on China’s demand rebound, and OPEC+’s evident unwillingness to change anything about its production curb policy that is set to run until the end of this year at least.

According to the International Energy Agency, oil demand growth from China is going to account for nearly half of all global oil demand growth this year. That global demand, for its part, is set to hit a record high of 101.9 million barrels per day, the IEA also said.