PetroChina Cuts Crude Processing 5.6% in First Half as Ethylene Output Jumps 21%
China's largest oil company processed 655 million barrels in H1 2026, down from 694 million a year earlier, while redirecting capacity to chemicals as domestic fuel demand weakens.
PetroChina processed 655.3 million barrels of crude oil in the first half of 2026, according to a quarterly report published Saturday (2026-09-19) — 39 million fewer barrels than the same period of 2025, a 5.6% decline that reflected deliberate throughput cuts rather than supply disruption.5
Output of gasoline, kerosene and diesel fell 8.8% to 54.3 million tons across the six months. Kerosene led the decline at 12.5%, to 8.4 million tons. Diesel was off 7.6% to 24.6 million tons. Gasoline slipped 8.6% to 21.4 million tons. Cuts spread across every fuel category suggest managed throughput reduction, not an isolated operational problem.5
Those figures align with deteriorating fuel economics that Sinopec laid out at its H1 2026 results presentation on Monday (2026-08-24). Marketing and distribution revenues at Sinopec fell 1.5% year on year for the first half, weighed down by declining product sales volumes. "Under these circumstances, how can producing more gasoline and diesel continue to generate revenue?" the company's chairman asked analysts. Domestic fuel sales, he said, had been falling for two years.3
Crude import data points the same way. China's crude arrivals fell to 7.8 million barrels per day in May — the lowest since 2018 — with state refinery run rates hitting 66.3%, a record low for the dataset, according to reporting from July (2026-07-04).1
PetroChina cut fuel output while expanding chemicals in parallel. Ethylene production jumped 20.8% to 5.402 million tons in H1 2026, from 4.473 million tons a year earlier. Chemical product sales reached 21.318 million tons, up 6.7% from 19.971 million tons in H1 2025. Synthetic resin, synthetic fiber raw materials and synthetic rubber production rose 12.4%, 12.4% and 21.4% respectively. The Dushanzi Petrochemical unit completed interim delivery of the Tarim Phase II ethylene facility, adding 1.2 million tons per year of capacity to the group's petrochemical platform.5
The chemicals expansion runs into a soft domestic demand environment. Sinopec reported that ethylene equivalent consumption in China dropped 9.9% year on year in H1 2026. PetroChina's 6.7% gain in chemical sales volumes during the same contraction implies either export-oriented growth or domestic market share capture; the company's report does not clarify which.3
On the supply side, CNOOC's Bozhong 19-6 condensate gas field — described as China's first 100-billion-cubic-meter gas field in the Bohai Sea — entered full operation on August 9 (2026-08-09). China's domestic oil and gas production hit record highs in 2025, state media reported on July 23 (2026-07-23), and the government has committed to raising total domestic output to 440 million tons of oil equivalent, per a Global Times report from August 17 (2026-08-17). The domestic supply push is accelerating as import appetite shrinks.4,2
ICE Brent crude front-month stood at $103.37 per barrel on September 20 (2026-09-20); JKM Asian LNG was at $27.51 per MMBtu. PetroChina's report gives commodity traders a concrete first-half processing figure — 655 million barrels, down 5.6% — from the world's second-largest crude importer, now clearly prioritising chemical margins over fuel volumes.5
Q3 throughput data from both companies will clarify how far the processing cuts extended through the summer months. Persistent diesel output declines alongside weaker refinery run rates would pull Chinese crude import volumes further from the 7.8 million barrels per day registered in May, itself the lowest monthly reading since 2018.1