Sinopec Monitors Middle East Tensions Amid Oil Supply Concerns

Sinopec's Deputy Chairman Zhao Dong announced that the company has activated an emergency plan following the outbreak of conflict between the U.S. and Iraq. According to RTHK, Sinopec is closely monitoring developments in the Middle East. Zhao stated that while the group's processing volume for March has been slightly adjusted, market supply remains unaffected. The company is prepared to make appropriate arrangements for April and May, emphasizing the importance of ensuring the supply of refined oil products to society. Current crude and refined oil inventories are sufficient to meet supply needs for the next two months. Zhao noted that the impact of the Middle East situation is more prolonged than the group anticipated, and the outlook is not optimistic. The disruption of navigation through the Strait of Hormuz has affected the availability of some resources within the Gulf region, impacting crude oil supply. Rising freight costs and oil prices also pose challenges. However, Sinopec has secured resources from Saudi Arabia, bypassing the Strait of Hormuz, and is actively acquiring non-Middle Eastern resources. As the world's largest trader, Sinopec has more means to acquire resources at lower costs. The United States recently announced a 30-day waiver allowing transactions of Russian oil and gasoline products currently in maritime transport. Zhao commented that these resources are relatively limited. He also mentioned that the group is actively engaging with relevant national ministries to advocate for policies such as utilizing social responsibility reserves. Zhao believes that these ministries are closely monitoring inventory levels and will dynamically introduce policies as needed.