According to a research report from Caitong Securities Co.,Ltd., the crude oil tanker shipping industry has already entered an upcycle, previously catalyzed by multiple positive factors including upstream capacity expansion, tightening compliance regulations, and charterer control. The recent US-Iran agreement in Switzerland has been reached, leading to gradual improvements in transit through the Strait of Hormuz. Subsequent potential excess inventory replenishment is expected to further drive the industry's upward cycle. Should the US completely lift sanctions on Iranian crude oil in follow-up negotiations, the "whitening" of Iranian "black oil" (accounting for 4.1% of global seaborne crude volume in 2025) would unleash compliant demand, potentially further optimizing the structure of crude oil shipping and benefiting freight rate benchmarks. The main views from Caitong Securities are as follows:
Context
1) On June 22, 2026, the US and Iran reached an agreement in Switzerland. The contents include all parties agreeing to establish a high-level committee responsible for political-level supervision of mediation work; establishing a communication channel to ensure the safe passage of commercial vessels through the Strait of Hormuz; agreeing to establish a "conflict de-escalation group"; technical-level talks will continue in Bürgenstock, Switzerland for the remainder of the week.
2) On the 22nd, the US Treasury's Office of Foreign Assets Control also issued an announcement, granting exemptions for transactions involving the production, delivery, and sale of Iranian crude oil, petrochemical, and petroleum products that were previously prohibited by multiple US executive orders and regulations, valid until August 21, 2026. The announcement indicates that importing Iranian crude oil, petrochemicals, and petroleum products into the US is also permitted.
3) Iran's Permanent Representative to the United Nations Office in Geneva, Ali Bahreini, stated on the 23rd that the Strait of Hormuz is now fully open to commercial vessels without any fees.
Strait Tanker Traffic Shows Significant Improvement, Multiple Shipowners Sign In-Gulf Freight Agreements in Recent Week
With the implementation of the US-Iran agreement, the volume of tanker traffic through the Strait of Hormuz has shown significant improvement. As of June 22, 2026, the daily passage of crude oil tankers through the Strait of Hormuz was 7 vessels (pre-war daily average was about 19 vessels, and before the agreement, it was less than 1 vessel per day), with 3 vessels eastbound and 4 vessels westbound. Since the US and Iran reached a ceasefire memorandum of understanding on June 15, according to Clarksons, a total of 34 VLCC freight contracts were signed from June 15 to June 22, including 10 contracts for cargoes within the Persian Gulf. The shipowners involved include China Merchants Energy Shipping, COSCO Shipping Energy Transportation, Sinochem Group, and others, with laycan periods generally in early to mid-July. Currently, Iran has declared the strait free and open for 60 days, and the US has exempted Iranian petroleum products for 60 days. During this period, whether it's the release of downstream restocking demand or the motivation for Iran and Gulf countries to ship cargo, it will catalyze the signing of more freight agreements.
Fleet Shift East Combined with Middle East Cargo Release Drives VLCC Freight Rates Higher Across the Board
As of June 22, 2026, VLCC deployment east/west of the Suez Canal accounted for 77.9%/22.1% respectively. The proportion of fleet deployed east of the Suez Canal has increased by 2.7 percentage points compared to before the US-Iran ceasefire memorandum. Reduced supply pressure on VLCC tonnage in the Atlantic region, combined with the gradual release of Middle East cargo, has driven VLCC freight rates higher across all routes. As of June 22, 2026, VLCC TCE rates for TD3C/TD15/TD22 reached $512,000/$189,000/$155,000 per day respectively, up 4.4%/8.9%/5.4% week-on-week, and up 574.2%/202.9%/257.5% year-on-year. With the further release of Middle East cargo in the future, TD3C is expected to see substantial increases in both volume and price. The earnings potential for domestic tanker shipping companies, as the main carriers, is promising. In the short term, it is advisable to marginally focus on the latest spot freight rates.
Medium-Term Focus on Whether Iranian Crude Fully Transitions to Compliance, Potential for Structural Improvement in Tanker Shipping
Referring to the impact of military action on Venezuela's oil exports, as of mid-June 2026, Venezuela's seaborne crude exports had climbed to 1.5 million barrels per day, representing increases of 142% and 88% compared to 620,000 barrels per day in January 2026 and the 2025 average of 800,000 barrels per day, respectively, showing a significant overall increase. Should the US completely lift sanctions on Iranian crude oil in follow-up negotiations, the "whitening" of Iranian "black oil" (accounting for 4.1% of global seaborne crude volume in 2025) would unleash compliant demand, potentially further optimizing the structure of crude oil shipping and benefiting freight rate benchmarks.
Risk Warnings
Strait of Hormuz reopening falls short of expectations; significant decline in crude oil demand; OPEC+ production increases fall short or shift to cuts; environmental policy implementation lags expectations; war risks, etc.
Comments