Guotai Haitong: Oil shipping welcomes a super bull market, Chinese fleet's value exceeds expectations.

Guotai Haitong released a research report stating that there will be two phases of super bull market in oil shipping from 2022 to 2025, and in 2026, Middle East conflicts will lead to trade disruptions causing high shipping prices. If the strait is reopened in the future, capacity utilization will remain high, coupled with replenishment demand and long-term control, high prosperity is expected to continue; if Iran sanctions are lifted, changes in the gray market are expected to bring super high prosperity to the compliant market, provide significant performance growth space. VLCC will accelerate aging in the next five years, with a rigid continuance in fleet size under 20 years old, shipyard production capacity bottleneck ensuring a rigid supply, high prosperity sustainable for several years, further providing valuation upside. The strategic value of oil shipping is highlighted, with the operating efficiency of Chinese fleets higher than the industry, and it is expected that the performance in 2026Q2 will continue to exceed expectations. Key views of Guotai Haitong: High-frequency tracking: Middle East conflicts lead to strait blockages and a sharp rise in shipping prices Affected by the US-Iran war, the passage through the Strait of Hormuz was blocked, leading to a sudden decrease in exports and a sharp rise in oil prices, with significant regional price differentials. The disruption in crude oil trade continues, with a sharp rise in shipping prices, large ships fluctuating at high levels and small ships falling back in the near term. Ship passage through the Strait of Hormuz was significantly reduced by more than 80%, leading to a nearly half reduction in Middle East crude oil exports; VLCCs entered Iran, shipping over 40% to China and India. In March-April 2026, crude oil exports increased significantly, estimated to fill nearly three-tenths of the gap in Middle East supply reduction, mainly to several Asian countries. COSCO Shipping Energy Transportation and China Merchants Energy Shipping operate mainly on routes from the Middle East (including Yanbu), West Africa, and the Americas, maintaining high operational efficiency. Export tracking: Constraints in the strait lead to reductions in the Middle East and increased exports from the US and Russia The continued blockade in the strait in April led to a global decrease of about 12% in the volume of global crude oil shipping exports. Middle East exports have been significantly reduced since March, with Yanbu Port filling the gap and still below normal levels in April. Iran has controlled the Strait of Hormuz since March, with exports increasing slightly. Gulf exports continued to grow in March-April, with a 28% increase in April setting a new record, as Europe replaced Asia as their main destination. Russia's exports have remained stable and have been "going further for close ones" since the Russia-Ukraine conflict, with a 7% increase in March-April. South America (excluding Venezuela) continued to increase production in 2026, with a 21% increase in April setting another record. Venezuelan exports briefly decreased earlier in the year before recovering, shifting their direction from China to the US and India. West Africa has maintained a stable volume of exports over the past five years, with a stable export structure. Overall, the gap in the Middle East has been partially filled by the Gulf, Yanbu Port, South America, etc., but global crude oil supply still significantly contracted, and the trade situation continues to be disrupted. Import tracking: Restrictions in the strait lead to import reductions, with a direct impact on Asia. The blockade in the Strait of Hormuz has led to a decrease in import volume, with an estimated 16% decrease in April, with a direct impact on Asia. China's crude oil imports fell by 28% in April, with recent increases in imports at Yanbu Port, reducing the overall proportion of the Middle East (including Yanbu) to below 40%. India's imports decreased by 8% in April, with recent recovery in Russian oil imports. Japan's imports fell by 70% in April, with the Middle East accounting for over 90%, making the impact significant, with increased imports from the Gulf. Europe's imports remained relatively stable in April, with diversification of sources and low dependence on the Middle East, leading to limited impact from the Middle East. Overall, global destocking to combat the crisis has forced major Asian consumer countries to adjust their import structures, but it is difficult to fully compensate for the gap in the Middle East in the short term. Risk warning Geopolitical situations, economic fluctuations, oil prices, industry policies, safety accidents, etc.