Sinopec says some refineries would be hit by a halt in Iranian crude oil buying

A senior executive at Sinopec, China’s largest refiner, said that some of its refineries will be negatively affected if it stops importing Iranian crude, in the first public comment by a senior Chinese oil executive about Washington’s decision to resume sanctions on Iran.

“Some of our downstream refineries were designed for refining Iranian oil,” said Huang Wensheng, vice president of the company formally known as China Petroleum & Chemical Corp. “If we stop imports, the benefits would be affected.”

The comment comes after Reuters reported that State oil trader Zhuhai Zhenrong Corp and Sinopec have taken measures to safeguard supplies, activating a clause in long-term supply agreements with National Iranian Oil Corp that allows them to use vessels owned by National Iranian Tanker Co.

Speaking during a news conference the day after Sinopec reported bumper first-half earnings, Huang said that the ongoing trade spat between the US and China will have a limited impact on the company’s profits.

Sinopec, the country’s largest refiner, said in a statement late on Sunday that first-half-year net income was 41.6 billion yuan ($6.05 billion), up 54 percent from the same period a year ago. That marks its best first-half performance since it listed 18 years ago, a company spokesman said on Monday.

Meanwhile, Sinopec expects its crude oil output to remain stable over the next three years, after crude oil production declined 1.6 percent in the first half of 2018, Huang said.

Sinopec also sees significant growth in natural gas production, Huang said.