PetroChina, Asia’s largest oil and gas producer, reported a sharp decline in first-half profit as weaker crude prices and a sluggish domestic recovery eroded margins across its upstream and downstream segments. The state-owned giant posted a net income of CNY 68.3 billion ($9.4 billion) for January to June 2025, down nearly 10 percent compared with the same period last year, underscoring how fragile energy markets remain despite recovering global consumption.
The company cited falling international crude benchmarks as the key factor behind the earnings drop. Brent and WTI averaged lower year-on-year, trimming revenue from exploration and production activities, while refining operations struggled to pass on costs in a softer demand environment. PetroChina’s natural gas and new energy businesses delivered modest growth, but this was not enough to offset the broader downturn.
Analysts note that the performance reflects a sector-wide challenge rather than an isolated setback. Chinese refiners have been caught between volatile input costs and patchy demand, with petrochemical margins under pressure as global supply continues to outpace consumption. The second quarter was particularly difficult, with narrowing refining spreads and weaker polymer demand cutting into profitability.
Despite the earnings decline, PetroChina emphasized its commitment to investment in low-carbon initiatives and natural gas expansion, framing the transition as critical for long-term resilience. Capital expenditure in the first half was directed toward enhancing oilfield recovery, upgrading refining efficiency, and accelerating renewable projects, in line with Beijing’s broader energy security and decarbonization goals.
Market observers say the outlook for the second half hinges heavily on oil price stability and domestic demand recovery. A rebound in China’s industrial activity could lend support, but persistent global oversupply and policy-driven shifts toward cleaner fuels may cap any significant upside. For investors and policymakers alike, PetroChina’s results serve as a reminder that the sector remains tethered to volatile price cycles while simultaneously navigating the structural challenge of energy transition.
