Caitong Securities has released a research report stating that the crude oil shipping industry has already entered a prosperous cycle, previously catalyzed by multiple favorable factors including upstream production expansion, stricter compliance, and long-term charter control. Currently, the potential for additional inventory restocking resulting from disruptions to transit through the Strait of Hormuz is expected to further drive the industry's upward trend. The firm recommends core targets such as China Merchants Energy Shipping (601872.SH) and COSCO SHIP ENGY (01138), and suggests monitoring China Merchants Nanjing Tanker Corp (601975.SH). The main viewpoints from Caitong Securities are as follows:
Since the joint US-Israel military action against Iran began on February 28, 2026, the conflict has entered its third week. The current situation involves high-intensity confrontation and continuous mutual strikes, without a declaration of full-scale war. In this context, the Iranian Revolutionary Guard Corps has announced comprehensive control over the Strait of Hormuz, explicitly prohibiting passage for vessels from the US, Israel, and their allies, while assuring normal transit for ships from other countries unaffected by the conflict.
Prior to the conflict, Middle Eastern seaborne crude oil exports were approximately 17 million barrels per day. Even considering maximum alternative supply from pipelines such as Saudi Arabia's East-West pipeline and the UAE's Fujairah pipeline, along with strategic reserve releases from IEA member countries, the global net crude oil shortfall is still estimated to be around 8 million barrels per day.
If the Strait of Hormuz were completely blocked, the combined onshore and offshore storage capacity of Middle Eastern oil-producing nations could only absorb about 25 days of stranded production. Beyond this period, full production shutdowns might be forced due to storage limitations. Currently, constrained by storage capacity, some Middle Eastern countries have begun cutting production. As of March 10, 2026, Saudi Arabia, the UAE, Iraq, and Kuwait have reduced crude output by up to 6.7 million barrels per day.
Considering the composition of primary fiscal revenues for Middle Eastern nations, oil-producing countries have an incentive to resume production swiftly once the Strait of Hormuz blockade is lifted to restore cash flow. Consequently, robust upstream destocking demand in the initial复产 phase could help maintain high freight rates.
The IEA requires member countries to hold strategic petroleum reserves equivalent to no less than 90 days of the previous year's net oil imports. To address the global oil supply tightness caused by the US and Israeli military strikes on Iran, on March 11, 2026, the IEA announced that its 32 member countries unanimously agreed to release 400 million barrels of strategic petroleum reserves. The US will release 172 million barrels of crude oil, a process expected to take 120 days to complete.
Given the current global net crude oil shortfall of approximately 8 million barrels per day, a one-month blockade of the Strait of Hormuz could create a global crude deficit of about 240 million barrels. To replenish this deficit within six months after the strait reopens—specifically to replenish consumed strategic reserves—an additional fleet of roughly 40 VLCCs would be required. This represents about 4.4% of the current global VLCC fleet and 5.3% of the compliant VLCC fleet. Furthermore, considering the potential for excess downstream restocking demand driven by scarring effects, medium-term VLCC demand may exceed expectations.
Risk warnings include a significant decline in crude oil demand, OPEC+ production increases falling short of expectations or shifting to cuts, sanctions implementation being slower than anticipated, slower-than-expected progress on environmental policies, and war risks.