Key Takeaways:
JPMorgan reiterated its Overweight rating on COSCO Shipping Energy (01138.HK) at a 27 HKD target, citing the US-Iran peace deal as a catalyst for tanker demand.
The reopening of the Strait of Hormuz would normalize crude oil procurement and boost inventory rebuilding, driving demand for very large crude carriers, JPMorgan said in a research report.
Since the conflict began, about 1.3 billion barrels of oil supply have been lost from the market, forcing buyers to source from the US, West Africa and Brazil on longer voyages. That has pushed VLCC freight rates above historical averages. The recent weakness in tanker stocks reflects fading confidence in panic restocking rather than deteriorating fundamentals, the bank said.
The agreement, announced by US President Donald Trump and confirmed by Pakistani Prime Minister Shehbaz Sharif, calls for the reopening of the Strait of Hormuz — a conduit for about one-fifth of global oil and LNG trade. Brent crude fell more than 3 percent toward $84 a barrel after the news. The official signing is scheduled for June 19, with Intertanko urging a return to full freedom of navigation and the removal of mines from the waterway.
The reopening would allow oil procurement to normalize and trigger inventory rebuilding, creating a sustained demand boost for tanker operators. COSCO Shipping Energy, one of China's largest VLCC owners, stands to benefit as global crude supply chains reset. The bank's view contrasts with the recent share price weakness, which it attributes to market skepticism about the pace of restocking rather than a structural downturn. Iran's oil exports plunged more than 90 percent during the US naval blockade, according to earlier reports.
The reiteration shows JPMorgan views the Hormuz reopening as a structural positive for tanker earnings, not a one-off event. Investors will watch the June 19 signing ceremony for confirmation of the deal's terms and the timeline for full navigation restoration.
This article is for informational purposes only and does not constitute investment advice.
