Sinopec to Reduce Production, Imports on Freight Rate Soar
China Petroleum and Chemical Corp., also known as Sinopec (NYSE: SNP), is considering cutting oil imports and production at its refineries to reduce expenses on skyrocketed freight rate margins in Asia.
The U.S. sanctions against Iran and Venezuela has led to a surge in costs of shipping crude to Asia over the past two weeks, as Reuters reported on Tuesday.
Freight costs have reached as high as $10 per barrel, from West Africa to China, Bloomberg reported.
Sinopec could reduce processing by one million tons of oil by December, equivalent to 5% of the company's refining, according to Bloomberg.
Sinopec reported its first half-year financials in August, saying its revenue reached 103.8 billion yuan, up 18% year-over-year. Net income fell to 49.1 billion yuan, down 20% from a year ago. The company also said it processed 124 million tons of crude oil in the six months through June, up 2.7% year-over-year, and produced 78.94 million tons of refined oil products, up 3.4% year-over-year,
Sinopec's stock fell 48 cents lower on Wednesday to $58.63 per American depositary share.
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