CICC: Reiterates that COSCO SHIPPING could "increase" its rating, expected to benefit from the reopening of the Strait of Hormuz.

JPMorgan Chase released a research report stating that a peace agreement between the United States and Iran could greatly increase the likelihood of the reopening of the Strait of Hormuz, providing a positive catalyst for oil tanker stocks. The reopening of the strait would increase the possibility of normalizing crude oil procurement activities and rebuilding inventories, thereby driving demand for oil tankers. The bank reiterated its "overweight" rating on China COSCO Shipping Corporation with a target price of HK$27. The report indicated that since the conflict in the Middle East, the market has lost approximately 1.3 billion barrels of oil supply, leading the market to shift towards importing from countries with longer sailing distances such as the United States, West Africa, and Brazil, driving very large crude carriers (VLCC) freight rates to levels higher than historical averages. The bank believes that the recent weakness in oil tanker stocks reflects a weakening confidence in panic buying of inventories, rather than a downturn in industry fundamentals.