Author | Chen Dazhuang Editor | Lang Ming Image Source | Visual China

The moment to witness history has arrived again. This time, the main players are the “Three Big Oil Companies.” On March 2nd, the A-share oil and gas sector experienced a surge in limit-up hits. By the close of trading, China National Petroleum Corporation (CNPC), China Petrochemical Corporation (Sinopec), and China National Offshore Oil Corporation (CNOOC)—collectively known as the “Three Big Oil”—achieved their first-ever collective limit-ups, becoming the market’s biggest highlight. Among them, China National Petroleum’s stock price hit a nearly 11-year high, CNOOC reached a new high since its 2022 listing, and Sinopec hit a new high since October 2024.

On March 3rd, the rally continued, with all three companies hitting limit-up again by midday. Sinopec even reached an 18-year high. As stock prices fluctuated, the market capitalization of these three companies also increased. Data from Snowball shows that on February 27th, the combined market cap of the “Three Big Oil” was 4.47 trillion yuan; by March 4th, it had risen to 5.35 trillion yuan, an increase of 880 billion yuan over three trading days.

China National Petroleum’s market cap stands at 2.42 trillion yuan, ranking second in the A-share market, just behind Industrial and Commercial Bank of China (ICBC) with 2.52 trillion yuan. In terms of circulating market value, China National Petroleum is the “stock king” of A-shares with 2.14 trillion yuan.

It’s worth noting that as early as November 2007, China National Petroleum was listed and topped the market, with a market value exceeding 8 trillion yuan, making it the world’s largest oil company at the time. It held the top spot in A-shares for eight years until overtaken by ICBC in 2015. Now, China National Petroleum is once again vying for the “stock king” throne in A-shares. Some investors excitedly say that the China National Petroleum shares they signed for in 2007 are finally breaking even after 19 years. According to China National Petroleum’s 2025 third-quarter report, the total number of shareholder accounts is 503,800.

▲ Stock price trend since China National Petroleum’s listing

However, on March 5th, after the two-day surge, the “Three Big Oil” companies experienced a pullback. During the trading session, China National Petroleum and Sinopec both fell more than 6%, and CNOOC also declined over 4%. It seems that reclaiming the “stock king” title in A-shares will not be easy for China National Petroleum.

Is a new “Stock King” in A-shares coming?

The reason China National Petroleum can challenge the top spot in A-shares during this rally is clear. The market often refers to the “Three Big Oil” as a collective, but their businesses actually differ significantly.

First, it’s important to distinguish between crude oil and oil. Crude oil is a viscous liquid directly extracted from underground, unprocessed. Oil is a broader concept, usually referring to crude oil but sometimes also including natural gas and all refined products such as gasoline, diesel, kerosene, etc.

China National Petroleum dominates China’s oil and gas industry and is one of the world’s largest crude oil companies. It holds the richest oil and gas resources in China, especially large oil fields like Daqing, Changqing, and Tarim. Its core business is focused on upstream exploration and extraction of crude oil and natural gas. The company also engages in refining some crude oil and petroleum products, as well as producing and selling derivatives and other chemical products.

Sinopec, while also involved in upstream exploration, mainly excels in downstream operations. It is the world’s largest refining company and the second-largest chemical company. Its strength lies in refining crude oil into gasoline and chemicals, and selling these through a vast distribution network. Consumers often see Sinopec’s gas stations and JET convenience stores, which are among its core assets.

According to Sinopec’s 2025 semi-annual report, the company operates 31,015 gas stations, ranking second in the world, and has 28,689 JET convenience stores. These sales networks are like capillaries, covering highways, expressways, rural areas across the country, selling refined oil, natural gas, non-oil products, lubricants, fuel oil, new energy, and other petrochemical products.

Financial data clearly shows the resource gap between China National Petroleum and Sinopec. In the first three quarters of 2025, China National Petroleum produced 714.3 million barrels of crude oil, while Sinopec produced only 211.17 million barrels. During the same period, China National Petroleum’s natural gas output was 3,977.2 billion cubic feet, compared to Sinopec’s 1,099.31 billion cubic feet. Both figures for Sinopec are less than one-third of China National Petroleum’s.

Looking at CNOOC, China’s largest offshore crude oil and natural gas producer, its mission is to focus all efforts on offshore exploration and extraction. The company’s core areas are in the Bohai Sea, western South China Sea, eastern South China Sea, and East China Sea, with assets spread across Asia, Africa, North America, South America, Oceania, and Europe. In the first three quarters of 2025, its net oil and gas production (including natural gas converted to crude oil equivalent) reached 578.3 million barrels of oil equivalent.

In the energy industry, companies with upstream resources—especially low-cost resources—are often valued higher by the market. China National Petroleum’s massive oil and gas output is its “hard asset” and a core support for its market value.

However, China National Petroleum also faces challenges. In the first three quarters of 2025, the global crude oil market was generally oversupplied, with international oil prices fluctuating downward. The average spot price of Brent crude was $70.93 per barrel, down 14.3% from $82.79 per barrel a year earlier. Meanwhile, domestic demand for refined oil decreased, and natural gas consumption growth slowed.

As a result, China National Petroleum’s average realized crude oil price was $65.55 per barrel, down 14.7% from $76.88. Its average domestic natural gas sales price was $8.81 per thousand cubic feet, down 1.0% from $8.90. This directly led to a 3.9% year-on-year decline in operating revenue to 2.169256 trillion yuan and a 4.9% drop in net profit attributable to shareholders to 126.294 billion yuan in the first three quarters of 2025.

Stock-wise, the share price rose from around 7 yuan at the start of 2025 to about 10 yuan by year-end, and then surged above 13 yuan during this rally.

“The Three Big Oil” has shared half of its profits with shareholders

Under the downward pressure of international oil prices, not only China National Petroleum but also the other two companies have seen their performance affected by the crude oil market. Financial data confirms this: in the first three quarters of 2024, the combined net profit attributable to shareholders of the “Three Big Oil” was 294.29 billion yuan; in the same period of 2025, it decreased to 258.23 billion yuan.

Specifically, in the first three quarters of 2025, Sinopec’s revenue was 21,134 billion yuan, down 10.7% year-on-year; its net profit attributable to shareholders was 300 billion yuan, down 32.2%. This decline is more pronounced than China National Petroleum’s. The main reasons include falling oil and product prices, declining gross margins on jet fuel and aromatics, and increased competition in the chemical industry.

Guoxin Securities’ research report also pointed out that the petrochemical industry faces prominent “involution” competition issues, with low-quality, homogeneous, disorderly competition leading companies into a dilemma of increasing production without increasing profits. The industry’s operating profit margin has fallen from 8.03% in 2021 to 4.85% in 2024, remaining low in the first half of 2025. This phenomenon is caused by overinvestment and repeated construction, leading to product homogenization.

Looking at profitability by sector in the first three quarters of 2025, China Sinopec’s exploration and development, refining, marketing, and chemical sectors achieved operating revenues of 35.5 billion yuan, 7.2 billion yuan, 10.7 billion yuan, and -7.1 billion yuan, respectively. Compared to the same period last year, these are decreases of 7.2 billion, increases of 0.6 billion, decreases of 6.5 billion, and decreases of 2.2 billion yuan. The refining sector saw some improvement, but other sectors weakened.

Unlike China National Petroleum and Sinopec, which have integrated upstream and downstream businesses, CNOOC does not have downstream refining as a “buffer.” Its sensitivity to international oil price fluctuations is higher. The company continues to increase exploration efforts, using volume to compensate for price declines. In the first three quarters of 2025, CNOOC launched 14 new projects, boosting its net oil and gas production to 578.3 million barrels of oil equivalent, up 6.7% year-on-year.

Additionally, the company has reduced production costs through technological improvements. Guoxin Securities data shows that in 2024, the average production cost for China National Petroleum was $33.08 per barrel, Sinopec’s was $38.41, and CNOOC’s was only $29.56. With these measures, in the first three quarters of 2025, CNOOC’s revenue decline was only 4.15%, much less than the 14.3% drop in oil prices; its net profit attributable to shareholders was 101.971 billion yuan, down 12.6% year-on-year.

To cope with adverse market conditions and declining performance, the “Three Big Oil” companies each have their strategies. China National Petroleum, like CNOOC, is also focusing on cost reduction. In the first three quarters of 2025, its unit oil and gas operation cost was $10.79 per barrel, down 6.1% year-on-year.

In recent years, technological innovation, industrial innovation, and green low-carbon initiatives have become hot topics. Oil giants are actively participating. China Sinopec’s Chairman Hou Qijun stated in the 2025 semi-annual report that the company aims to accelerate research and development of new chemical materials related to domestic large aircraft, new energy vehicles, and robotics, and to strengthen the layout of new technologies such as new energy batteries, synthetic biology, and artificial intelligence.

CNOOC also incorporated digital intelligence transformation and green low-carbon strategies into its 2025 semi-annual report. The company said that by integrating offshore oil and gas production with AI technology, satellite remote sensing, unmanned equipment, and AI algorithms, it can maintain production during typhoons and has achieved certain results in energy saving and emission reduction.

Interestingly, Sinopec is increasingly penetrating consumers’ daily lives for revenue. Besides JET convenience stores, by the end of 2025, Sichuan Petroleum (a provincial branch of Sinopec) opened its first “JET Laundry” factory in Chengdu, claiming to provide professional laundry, water washing, and ironing services for customers in the Chengdu area. The station also offers ancillary services like JET Car Care and JET Coffee.

Historically, the crude oil sector has been associated with “high elasticity and strong cycles,” with investment logic mainly revolving around oil price fluctuations, and performance and stock prices highly dependent on industry cycles. Now, this logic is changing.

Wind data shows that since China National Petroleum’s listing in 2007, it has paid out a total cash dividend of 875.28 billion yuan, with an average dividend payout ratio of 47.22%. Sinopec, listed since 2001, has paid 627.59 billion yuan in dividends, with an average payout ratio of 52.34%. CNOOC, listed since 2022, has paid 255.98 billion yuan, with an average payout ratio of 50.64%. The total dividends paid by these three companies since their listings amount to approximately 1.75 trillion yuan.

In comparison, the “big dividend” banks in A-shares seem less impressive. The four major banks—Bank of China, ICBC, Agricultural Bank of China, and China Construction Bank—have average dividend payout ratios of 31.59%, 31.54%, 29.72%, and 31.11%, respectively.

This means that the “Three Big Oil” companies have distributed half of their profits to shareholders, earning the label of “high-dividend assets.”

Market analysts comment that the oil and gas giants represented by the “Three Big Oil” have collectively moved away from the traditional model of “increasing production and expanding capacity.” The sector’s valuation anchor is gradually shifting from “oil price expectations” to “cash flow returns,” transforming oil assets from growth cycle commodities focused on price spreads to stable-yield, high-dividend assets.