PetroChina profit jumps 22 per cent as higher oil prices offset Middle East supply hit
China’s largest oil and gas producer reported a 22 per cent rise in first-half earnings driven by elevated global crude prices, demonstrating how geopolitical supply disruptions are currently shielding state-backed energy majors from weakening domestic fuel demand.
PetroChina posted a 22 per cent rise in first-half net profit, reaching 103.9 billion yuan (US$15.4 billion) for the six months ended in June. The Beijing-based state-backed giant also recorded a 5.3 per cent increase in overall revenue, which climbed to 1.53 trillion yuan (US$227.55 billion) during the period.
The earnings surge highlights how elevated global crude prices are currently insulating major energy producers from structural shifts in the Chinese market. While the adoption of electric vehicles and liquefied natural gas continues to erode traditional domestic fuel sales, higher crude benchmarks have more than compensated for the volume losses. Additionally, robust natural-gas operations helped offset the weaker oil production environment.
PetroChina’s average realised crude oil price jumped 15.6 per cent year on year to US$76.53 per barrel. This pricing power drove a 15.3 per cent increase in operating profit for the oil, gas and new-energy segment, which reached 100.4 billion yuan.
These financial gains occurred despite a 2.8 per cent decline in total crude output, which fell to 462.9 million barrels. The production shortfall was primarily caused by a 14.2 per cent drop in overseas output, reflecting the severe disruption to global energy flows caused by the US-Israeli war in Iran. Domestic crude production also slipped 0.5 per cent, though domestic natural gas output grew 2.4 per cent to support the broader earnings mix.
Management is now focused on stabilising international assets affected by the conflict. Ren Lixin, the company’s executive director and president, noted at a results briefing that the firm is gradually restoring operations at its Middle Eastern projects.
“We are steadily resuming production at our Middle East projects, with output in the region having recovered to nearly 90 per cent of pre-conflict levels,” Ren said. For investors, this rapid operational recovery suggests that the supply-side constraints that initially boosted global crude prices may begin to ease in the second half of the year.
The ability of the producer to deliver strong earnings amid regional conflict and shifting energy consumption patterns underscores the resilience of state-backed energy majors. Market participants will now watch closely to see if the continued restoration of Middle Eastern output eventually pressures the very crude prices that drove this half-year profit expansion.
