China’s Sinopec not Buying Iranian Crude despite U.S. Waiver
Chinese state oil giant Sinopec, Asia’s biggest refiner by capacity, will not buy Iranian oil even after the U.S. waiver on purchases of crude from Iran loaded on tankers as of March 20, a senior Sinopec executive said on Monday.
Sinopec, officially known as China Petroleum & Chemical Corporation, is weighing the potential risks of Iranian oil trade and “basically won't buy”
Iranian crude, the company’s president Zhao Dong said, as carried by Reuters.
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) on Friday issued a general license, which basically authorizes until April 19 imports of Iranian crude loaded on vessels as of March 20. The license even includes authorization of U.S. imports of Iranian-origin crude, amid the frantic attempts by the Trump Administration to curb soaring oil prices.
Reports emerged on Monday that Chinese state refiners are considering the pros and cons of buying Iranian crude which is now ‘unsanctioned’, as is Russian crude already loaded on vessels.
State-controlled refiners in China are considering whether to buy Iranian crude after the U.S. waiver allows legitimate imports again, sources with knowledge of the situation told Bloomberg on Monday.
China has been the biggest and nearly the only buyer of Iranian crude in recent years amid the U.S. sanctions on Iran’s exports, but all these sanctioned barrels were flowing on dark fleets to the independent Chinese refiners. These crude processors, commonly referred to as teapots, don’t care about any sanctions—their primary consideration in choosing supply is the price. The sanctioned Iranian barrels have been sold at much lower prices compared to international benchmarks, due to the illegal activity surrounding shipments and trade.
Chinese state oil refiners, however, have been staying away from Iran’s crude for years to avoid running afoul of the U.S. sanctions.
Sinopec has decided against buying Iranian crude, but it is pushing the Chinese authorities to allow it to tap the massive state petroleum reserves, the refiner’s president said on Monday.
Currently, Sinopec is buying Saudi crude loading from Yanbu on Saudi Arabia’s Red Sea coast. It is also sourcing crude from outside the Middle East, the executive said.
Sinopec Profit Slumps in 2025 as Oil Prices and Chemicals Weigh
China Petroleum & Chemical Corp. posted a marked earnings decline in 2025 as softer crude prices, weaker fuel demand, and continued pressure in chemicals weighed on results, even as the state-controlled major lifted oil and gas output to a record and maintained an aggressive shareholder return policy. The company reported revenue of RMB2.78 trillion and net profit attributable to shareholders of RMB32.48 billion under IFRS, down 9.5% and 33.6% year over year, respectively, while cash flow from operations rose to RMB162.5 billion. It proposed a final cash dividend of RMB0.112 per share, bringing the full-year payout to RMB0.20 per share.
Chairman Hou Qijun said the earnings drop reflected sharply lower international crude prices and weak chemical margins, but he pointed to stable finances, stronger governance, and continued execution across the portfolio. The company said Brent averaged $69.1 per barrel in 2025, down 14.5% from a year earlier, while China’s demand for refined products fell 4.1%, underscoring the pressure facing integrated downstream players.
Operationally, Sinopec highlighted resilience in upstream. Oil and gas output reached 525.28 million barrels of oil equivalent, up 1.9% year over year, with natural gas production climbing 4.0% to 1,456.6 billion cubic feet. The company said domestic oil and gas equivalent production and profitability across its natural gas value chain both hit record highs, supported by breakthroughs in deep, unconventional, and offshore exploration.
Refining was one of the brighter spots. Sinopec processed 250.33 million tonnes of crude, broadly stable year over year, while light chemical feedstock production rose 8.4% and jet fuel output increased 7.3%. Segment operating profit in refining rose 40.7% to RMB9.45 billion as the company pushed its strategy of shifting more barrels toward chemicals feedstocks and specialty products.
The chemicals business remained the weak link. Segment revenue fell 11.4%, and the division posted an operating loss of RMB14.58 billion as new domestic capacity, lower benchmark oil prices, and softer margins continued to squeeze returns. Sinopec said it is responding by cutting feedstock costs, optimizing product slates, and accelerating higher-value materials, including polyolefin elastomers and carbon fiber.
Marketing and distribution also came under pressure from China’s energy transition. Total oil product sales volume fell 4.3% to 229.02 million tonnes, while segment operating profit dropped 46.5% to RMB9.97 billion. Even so, Sinopec said it retained leading positions in automotive LNG, hydrogen refueling, and low-sulfur bunker fuel, and expanded its alternative mobility footprint to more than 13,000 EV charging and battery swapping stations.
The report lands as China’s major refiners face a structurally tougher fuels market, with EV adoption eroding gasoline and diesel demand while petrochemical overcapacity pressures margins. Sinopec is positioning for that shift by investing in ethylene and aromatics projects in Maoming and Jiujiang, advancing its first 40-million-tonne refining base, and building out what management calls a new growth platform spanning hydrogen, power, new materials, biomass energy, and CCUS. Capital expenditure totaled RMB147.2 billion in 2025 and is planned at RMB131.6 billion to RMB148.6 billion in 2026.
Management framed 2026 as the opening year of its “15th Five-Year Plan” agenda, with priorities centered on energy security, refining and chemicals restructuring, sales network optimization, and development of “four new growth drivers” in new energy, new materials, new business models, and new tracks. The company also said it repurchased both A and H shares for a fourth straight year, signaling continued emphasis on shareholder returns despite weaker earnings.
By Charles Kennedy for Oilprice.com
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