The state-owned oil and gas corporation Sinopec has just issued a tough signal: No intention to buy Iranian oil, despite the US just easing partially sanctions on the amount of oil floating at sea. This move takes place in the context of the global energy supply chain fluctuating due to military tensions in the Middle East.
Speaking at the business results announcement meeting, Chairman Zhao Dong said that Sinopec reduced its oil refining capacity by 5% this month due to supply disruptions. In the next 2 months, the group will flexibly adjust production and find ways to increase processing efficiency to ensure domestic supply.
The main reason Sinopec "avoids" Iranian oil is not in the supply, but in financial and legal risks. Although the US Treasury Department under Secretary Scott Bessent granted 30 days of exemption for about 140 million barrels of Iranian oil at sea, payment is still a difficult problem because financial sanctions have not been completely lifted.
Meanwhile, most of this oil is on ships belonging to the old "dark fleet", posing many transportation risks.
We will basically not buy Iranian oil, this is very clear," the Sinopec leader emphasized, although the legal department is still carefully assessing the exemptions from the US.
In fact, most of Iran's oil exports to China are currently undertaken by private oil refineries, while state-owned "giants" such as Sinopec are more cautious in the face of international pressure.
Meanwhile, this group is pivoting its supply. Sinopec is sharply increasing oil imports from Saudi Arabia through the port of Yanbu in the Red Sea, while expanding its search for sources outside the Middle East.
However, with about half of Sinopec's crude oil demand originally dependent on this region, the risk of disruption in the Strait of Hormuz due to blockades remains a direct threat.
The solution promoted by Sinopec is to open a national strategic oil reserve. China currently owns one of the largest oil reserve systems in the world, but the release of this source completely depends on the government's decision. Previously, Beijing was said to have rejected the proposal to propose a reserve of about 13 million tons of oil.
We believe that the government is closely monitoring the inventory and market situation, and will act at the appropriate time" - Mr. Zhao Dong said.
Pressure on Sinopec comes not only from geopolitics. The group is facing a serious profit decline, as competition from new energy increases and petrochemical profit margins weaken. The latest report shows that Sinopec's 2025 profit has decreased by 36.5%.
In another development, on March 23, US President Donald Trump declared that the Hormuz Strait could soon be reopened if diplomatic contacts with Iran develop positively and the Hormuz Strait in the future could be "commonly controlled" between him and the "next supreme leader of Iran".
However, the Iranian Foreign Ministry immediately rejected it, affirming that there was no negotiation, whether directly or through intermediaries.
