China National Offshore Oil Corp.'s profit and revenue rose to records in the first half of the year, fueled by higher oil and gas sales, while production hit a new high as the company navigated an uncertain landscape shaped by the Middle East conflict.

Cnooc said Wednesday that net profit climbed 23% from a year earlier to 85.82 billion yuan, equivalent to $12.77 billion, and revenue increased 17% to 242.66 billion yuan, both reaching the strongest levels for any interim period in its history.

The company, China's largest offshore oil-and-gas producer, is the second of three state-owned energy giants to report earnings that capture the impact of the U.S. war with Iran. Amid on-and-off fighting, the conflict has continued to fuel uncertainty in energy markets nearly six months in, though recent diplomatic developments with Iran have raised hopes for the reopening of the Strait of Hormuz.

"In the first half of 2026, the macro economic environment remained complex and volatile, with external uncertainties continuing to rise," Chairman Zhang Chuanjiang said. "Faced with multiple challenges such as sharp fluctuations in international oil prices and rising expectations of global liquidity tightening, the company remained focused and proactive."

Cnooc also increased exploration and production efforts, while intensifying research and application of key technologies for reserves and production growth, Zhang said.

Oil-and-gas sales, the company's main source of income, increased 20% in the six months ended June. Total net production rose 3.7% to a new record of 398.7 million barrels of oil equivalent.

The energy major also declared an interim dividend of 0.94 Hong Kong dollar a share, equivalent to $0.12, which the company said is a record since its listing.

The results come days after fellow energy giant Sinopec, formally known as China Petroleum & Chemical Corp., also reported stronger earnings, with first-half net profit rising by double digits thanks to higher oil prices.

However, with crude prices likely to moderate as geopolitical tensions ease, analysts have flagged a weaker outlook for the rest of the year, given that domestic demand for oil also remains subdued.

"Chinese oil demand has contracted sharply in the face of the Middle East disruptions, with refiners drawing down inventories, suffering weak refining margins, and ongoing restrictions on refined product exports," S&P Global said in a recent commentary.

Still, China has a high level of energy self-sufficiency, thanks to its diversified sources of coal, renewables and nuclear energy, which helps reduce the economic impact from the energy shock, said Christiaan Tuntono, Asia-Pacific senior economist at Allianz Global Investors.

Cnooc retained its annual production target of 780 million to 800 million barrels of oil equivalent, up from 777.3 million in 2025. It also kept its capital expenditure budget at between 112 billion yuan and 122 billion yuan for 2026.