CITIC Securities: Focus on undervalued leading oil tanker companies, multiple factors boosting demand for shipping.

According to the research report of CITIC Securities, based on data from Clarksons, the VLCC TCE increased by 31.7% to $45,800 per day in the week of August 24, 2025, and the VLCC TD3C TCE increased by 15.7% compared to the previous period. VLCC freight rates have been steadily increasing for three consecutive weeks since early August, and the year-on-year growth rate has turned positive. We believe that the continued improvement in freight rates during the off-season reflects the tightness on the supply side and the gradual effects of OPEC+ production increases, with expectations of further boost as the peak season approaches. OPEC+ plans to increase production by 547,000 barrels per day in September, one year ahead of the original plan, which is expected to significantly increase the number of VLCC cargoes and resonate with peak season demand. On the supply side, the increase of sanctioned capacity combined with the accelerated aging leading to efficiency losses, if the black and gray market trade windows further shrink, is expected to accelerate the clearance of old vessels and exacerbate supply side constraints. Overall, in the short term, the effects of OPEC+ production increases continue to transmit to cargo demand, while in the medium term, attention should be paid to the impact of changes in Iranian oil exports on compliance demand.