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China’s state oil major Sinopec reported lower-than-expected net figures for 2022, citing the impact of Covid lockdowns that stifled China’s economy last year.
The company reported a net profit of around $9.64 billion, or 66.2 billion yuan, for 2022, which compared with a record result of $10.47 billion, or 72 billion yuan, a year earlier.
The main impact on Sinopec’s performance came from lower fuel demand amid the lockdowns. At the same time, chemicals prices were down, affecting refiners’ performance. Sinopec booked a loss at its chemicals department for the last quarter of the year, Bloomberg noted in a report on the news.
Revenues, meanwhile, were up by 21 percent, reaching $483 billion, or 3.32 trillion yuan. Oil production at home hit a record high last year, at 35.32 million tons, with natural gas production also up, to 35.37 billion cu m.
"In 2022, the company encountered complicated, fickle and severe conditions, including global economic slowdown, geopolitical conflicts and weak domestic market demand," said the chairman of Sinopec Group, Ma Yongsheng.
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, on the one hand, 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 bpd, the IEA also said.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com