COSCO SHIP ENGY (01138) saw its shares rally nearly 4% in Hong Kong trading on Tuesday, with the stock last up 3.75% at HK$17.98, on turnover of HK$151 million.
Market sentiment is buoyed by improved supply-demand dynamics in the dark shipping segment and stronger vessel owner confidence, which have pushed freight rates to fresh highs. Last week, VLCC spot earnings on U.S. Gulf and West Africa routes soared to $210,000-$220,000 per day, while the Middle East route's TCE spiked to an impressive $700,000 per day.
Analysts at Guotai Haitong Securities believe geopolitical factors are reinforcing the medium-to-long-term bullish case for the tanker sector. They anticipate that while a resumption of transits through the Strait of Hormuz is possible in the medium term, the oil shipping market will revert to a highly prosperous and sustainable trajectory, while also carrying the optionality of ultra-high prosperity in the compliant market if Iranian sanctions are lifted.
Echoing this view, China Industrial Securities notes that from June to August 2026, tanker rates are expected to hold at elevated levels: the weighted average VLCC freight rate is projected to rise 340.99% year-on-year, which should help extend the company's earnings growth momentum into the third quarter.
Looking ahead, should the Strait of Hormuz resume normal navigation, restocking demand from European and Asian refineries, along with inventory drawdowns by Middle Eastern oil producers, could trigger a simultaneous rise in both tanker shipping volumes and prices. This, in turn, is likely to have a positive spillover effect on segments such as refined products, domestic oil, and LNG transportation.
As one of the world's largest energy shipping service providers, COSCO SHIP ENGY is well-positioned to fully benefit from the ongoing upswing cycle in the oil shipping market.
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