Shenwan Hongyuan Group Co., Ltd. released a research report stating that military actions by the United States and Israel against Iran have led to the closure of the Strait of Hormuz. The sharp decline in vessel traffic through the strait indicates that shipping owners' concerns about a blockade have materialized. In the short term, factors such as concentrated demand release, scheduling disruptions, and uneven vessel deployment could still lead to freight rates exceeding expectations. Over the medium term, the redirection of Venezuelan and Russian crude oil will continue to increase demand for compliant VLCCs. Combined with Sinokor's strategy to control fleet capacity and enhance market concentration, the logic of amplified freight rate levels and volatility continues to play out. Freight rates are expected to remain elevated, with significant upside risks still present.

Key points from the report are as follows:

Event: On February 28, 2026, Israel and the United States launched a joint military strike against Iran. On the evening of March 2, Iran announced the closure of the Strait of Hormuz and stated it would fire upon any vessel attempting passage.

1) Strait Traffic: According to vessel data, daily traffic for all ship types through the Strait of Hormuz dropped from 146 vessels on February 26 to 45 vessels on March 1, and further declined to just 5 vessels during March 2-3. Crude tanker traffic fell from 31 vessels on February 26 to zero during March 2-3. The traffic data confirms that the strait is effectively blocked as feared by shipowners.

2) Vessels Trapped Inside the Strait: Data indicates that after March 1, a total of 76 VLCCs, representing 23.45 million deadweight tons (DWT) or approximately 8.3% of the global VLCC fleet (about 11.1% of compliant VLCCs), remained stationed inside the Persian Gulf. Additionally, 153 crude tankers (32.40 million DWT, 6.9% of the global crude tanker fleet) and 251 product tankers (7.43 million DWT, 3.7% of the global product tanker fleet) were also held within the area.

3) Crude Supply from the Persian Gulf: Major oil-producing nations in the Persian Gulf include Saudi Arabia, Qatar, the UAE, Kuwait, Iran, and Iraq. Their collective crude production in 2025 was 25.37 million barrels per day (bpd), accounting for 23.9% of global output. Crude exports from the Persian Gulf in 2025 were approximately 15 million bpd, representing 34.5% of global crude trade (43.52 million bpd). Of Saudi Arabia's 2025 crude exports of 6.20 million bpd, about 5.40 million bpd were shipped via the Persian Gulf, with the remaining 0.80 million bpd exported from the Red Sea port of Yanbu. Saudi Arabia can utilize the East-West Pipeline (capacity 5-7 million bpd) to transport crude from its eastern fields to Yanbu, enabling exports to Africa or the Mediterranean, albeit with ongoing Houthi threats. Data shows Yanbu's recent weekly shipments surged to 2.23 million bpd. The UAE's Fujairah port, located outside the Strait of Hormuz, handled approximately 1.15 million bpd in 2025, with a maximum capacity near 2 million bpd; recent weekly shipments reached 1.78 million bpd. Considering exports from Yanbu and UAE ports outside the Gulf, restricted crude shipments from the Persian Gulf amount to nearly 10 million bpd, or 22.9% of global crude trade.

Stock Recommendations: For shipping companies benefiting from the unexpected cyclical upturn (high volatility), Shenwan Hongyuan recommends China Merchants Energy Shipping (601872.SH) and COSCO SHIP ENGY (600026.SH, 01138). Investors may also monitor China Merchants Nanjing Oilchem (601975.SH). For international stocks with high sensitivity: dry bulk carriers such as Himalaya Shipping (HSHP.US), Genco Shipping & Trading (GNK.US), and Star Bulk Carriers (SBLK.US); tanker companies like Okeanis Eco Tankers (ECO.US) and CMB.Tech (CMBT.US). For shipbuilding-related stocks with long-cycle logic (lower volatility): consider China CSSC Holdings (600150.SH), China Shipbuilding Industry Group Power (600482.SH), and ST Songfa (603268.SH).

Risk warnings include prolonged conflict leading to global economic recession, slower-than-expected growth in China, and industry antitrust measures.