PetroChina Profit Falls as Oil Prices and Fuel Demand Dip

PetroChina, the largest oil and gas producer in China, reported on Tuesday a 5.4% decline in first-half profit as oil prices fell from a year earlier and domestic fuel demand continued to be pressured by the rise in new-energy vehicle sales.

PetroChina booked $11.75 billion (84 billion Chinese yuan) in profit for the first half of the year, down by 5.4% from the record-high profit for same period last year.

Amid lower benchmark oil prices, PetroChina’s average realized crude oil price was $66.21 per barrel between January and June 2025, down by 14.5% from $77.45 per barrel for the same period last year.

Revenues in the refining and chemicals business slumped by 12.8% from last year, primarily due to lower prices of refined products and most chemical products.

“The domestic refined oil products market continued to be affected by alternative energies, and the consumption of natural gas domestically was basically stable,” PetroChina said in its earnings release.

“In the first half of 2025, the competition of alternative energy accelerated and the consumption of gasoline and diesel in China continued to be suppressed,” the state energy giant said, noting that kerosene demand saw the only growth in fuel consumption amid continued recovery of the air travel market.

Looking forward to the second half of 2025, PetroChina said that “The domestic refined oil products market will continue to face competition from alternative energy, and the demand of the natural gas market will recover to relatively rapid growth.”

Last week, the largest Chinese and Asian refiner, Sinopec, reported a 36% decline in first-half profit on the back of lower oil prices and refining margins and weakening domestic fuel demand.

Sinopec also flagged a 3.6% drop in domestic consumption of refined petroleum products, “mainly affected by alternative energy.”

Over the past year, consumption of the road transportation fuels – gasoline and diesel – has been trailing the levels from just two years ago, when China was emerging from nearly three years of Covid-related lockdowns. That’s not only because of the pent-up demand back in 2023. A large part of the lower gasoline and diesel demand is due to the soaring sales of electric passenger cars and trucks and LNG-fueled heavy-duty vehicles.

By Michael Kern for Oilprice.com

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