Hong Kong stock concept tracking | North American oil shipping costs to Asia soar, oil shipping companies' risk-return ratios are attractive (with concept stocks)

Trade sources said on Tuesday that due to concerns about more extensive US sanctions on the Russian fleet leading to supply shortages, shipping costs have risen, causing prices for Canadian and American WTI crude oil shipped to Asia to surge. Sources said that in April, discounts on Canadian crude exported to China via cross-mountain pipelines narrowed by 1-2 US dollars per barrel compared to the previous month. On Wednesday, the freight cost for a very large crude carrier capable of transporting 2 million barrels of oil from the US Gulf Coast to China was $9.69 million, an increase of over $3 million since the US imposed additional sanctions on Russia on January 10. June Goh, a senior analyst at market intelligence company Sparta Commodities, expects Asian refiners to secure supplies by purchasing goods from West Africa, Brazil, and Canada, even though the costs of these goods have increased due to rising freight rates and premiums. Guotai Junan's research report predicts that geopolitical influences on oil prices may weaken in the next two years, as the global oil production cycle will increase, with expectations of increased production from OPEC+, South America, and North America driving oil trade growth. The report also suggests that oil shipping supply and demand are expected to perform better than expected in the future, with oil prices possibly falling. The market is expected to return to low levels, with dividend support determining the valuation floor. The risk-reward ratio is once again attractive, as attention should be paid to changes in geopolitical situations and countercyclical opportunities. EB Securities' research report states that by 2025, as the macroeconomic environment improves, Chinese oil demand is expected to contribute a certain increment, and OPEC+ is expected to enter a production growth cycle, with oil shipping demand still expected to grow by 25 years. Due to low contract signings for oil tankers in 2020-2022 and slow capacity growth in 2024, combined with a significant aging of the VLCC fleet, as the dismantling cycle approaches, the report is optimistic about the gradual offsetting of future new capacity injections by increasing oil tanker dismantlings. Clarksons forecast in December 2024 predicts a supply-demand gap for oil tankers of -1.1% in 2025, and a VLCC supply-demand gap of -1.9%. With the enforcement of these sanctions, the exit of oil tanker capacity is expected to accelerate, and the certainty of tight oil shipping supply and demand is expected to further strengthen, with freight rates likely to continue to rise. Related Hong Kong-listed stocks in the oil shipping market: COSCO Shipping Energy Transportation (01138): COSCO Shipping Energy Transportation announced that it is expected to achieve a net profit attributable to shareholders of the listed company of approximately 3.96 billion yuan in 2024, an increase of about 17.2% compared to the same period last year. Morgan Stanley said that US sanctions may lead to the gradual departure of the "shadow fleet" from the market, which will benefit the legitimate oil tanker market. The bank believes that negative sentiment reflecting weaker-than-expected performance in the fourth quarter of 2024 may improve for COSCO Shipping Energy Transportation. The bank's outlook on COSCO Shipping Energy Transportation is positive.