HK Stock Market Move | COSCO Shipping Energy Transportation (01138) rose more than 4% in early trading, with the reopening of the Strait adding potential replenishment demand. The oversupply of oil transportation is expected to see a reversal.

COSCO Shipping Energy Transportation (01138) surged more than 4% in early trading, rising 4.63% to HK$16.27 as of the time of writing, with a turnover of HK$72.8 million. On the news front, US President Trump stated that the Strait of Hormuz will be fully open before Friday (19th). Goldman Sachs released a research report stating that with the reopening of the Strait of Hormuz, the previous oversupply situation of crude oil and petroleum tanker transport caused by the strait closure will be reversed by about 9% to 11%. Meanwhile, if exports in the Gulf region return to normal by the end of July, the potential demand for global crude oil inventory replenishment will be about 5%, enough to offset the inventory consumption caused by the strait closure. Goldman Sachs predicts that in the first year after the strait reopens, VLCC equivalent period charter rates (TCE) are expected to reach $250,000 per day, significantly higher than the benchmark forecast of $150,000. If sanctions on Iranian oil are fully lifted, it is estimated that an additional 5% of shipping demand will shift from shadow fleets to compliant fleets. This scenario will further drive VLCC TCE to soar to $350,000 per day in the first year after the reopening.