CITIC Securities Sees Potential Hormuz Strait Reopening Lifting VLCC Efficiency and Freight Rates

A CITIC Securities research note said there were signs that transit through the Strait of Hormuz could improve. According to Jin10, the note said that if the strait partially resumes operations in late June, operating efficiency for the VLCC fleet could enter a period of meaningful improvement. In the first phase, bunker fuel within the Gulf would be expected to flow first to fuel-short regions such as Southeast Asia, and freight rates could reach a temporary peak. The note said spot price spreads and smoother supply chains could be the main drivers. It referenced the volumes and transaction prices seen during April 17-18, when expectations for a first reopening of trading transit emerged, and said elevated freight rates could spill over to other routes. In the second phase, the note said the market focus would shift to restocking, with expectations that increased output from Gulf oil-producing countries could coincide with inventory rebuilding by consuming countries. It added that a continuing accumulation of inventory shortfalls could be an important marginal variable over the next year. The note said leading tanker companies’ quarterly results in the second quarter of 2026 were expected to reach record highs, and it flagged a potential valuation inflection point for major oil-shipping firms.