The Zhitong Finance App learned that Guojin Securities released a research report saying that current orders are historically low, supply rigidity is determined, global inventory replenishment provides demand-side support, and increased demand from emerging countries in the Asia-Pacific region such as China and India is driving up demand for oil transportation. The restructuring of global oil trade after the conflict between the US and Iran led to a significant increase in shipping distances. Shipments from long-distance regions such as the Gulf of America, South America, and West Africa have increased, which is expected to further drive up demand for tons and nautical miles. The bank continues to be optimistic about the interpretation of the oil boom cycle. It recommends China Merchants Shipping (601872.SH), COSCO Haineng (600026.SH), and suggests focusing on China Merchants South Oil (601975.SH).
Guojin Securities's main views are as follows:
1. The situation in the Middle East is tense, traffic through the Strait of Hormuz is blocked, and the oil transportation boom continues. The geographical situation in the Middle East is tense and turbulent, and the major oil transportation cycle has begun again. On February 28, the US-Iran conflict broke out, seriously disrupting the passage of the Strait of Hormuz. As the risk premium rose, the TD3C-TCE level rose rapidly and reached more than 600,000 US dollars/day on August 21; however, the market volume of this route is extremely small and does not represent the actual benefits of shipowners. VLCC transactions are mainly concentrated in places such as the Red Sea, West Africa, and the United States and Mexico. Currently in the US-Iran game stage, repeated strait blockades affect market confidence; compounded by the emergence of new geographical risks in the Red Sea region, the market is still repeating this logic in the short term: blocked passage through the strait -> tight oil supply+safe evasion of ships -> rising oil transport prices; therefore, the bank believes that oil transportation will maintain its boom in the short term.
The ship market is driven by freight rates and is highly booming: in the one-year rental market in July 2026, aframax/suezmax/VLCC prices were +0.36%/9.27%/-1.25% month-on-month, +65.13%/+117.44%/+145.93% year-on-year, and ship rental prices stood at an all-time high. Since January '26, the price of a 5-year VLCC ship is higher than that of a new ship, and since July, the price of a 10-year VLCC ship is higher than that of a new ship. Prices have been inverted, reflecting the market's high optimism about the immediate market.
2. Demand: Global oil trade has been restructured, the potential for additional purchases has been realized, combined with increased oil production, and strong potential demand. The 2026 conflict between the US, Israel, and Iran led to the restructuring of global oil trade routes. The closure of the Strait of Hormuz triggered serious cuts in oil supply, and demand for crude oil imports gradually turned to the Atlantic market. At this time, the US increased production of emergency crude oil from strategic reserves and crude oil from American countries, supporting continued strong US Gulf shipments; and since the transportation distance from the US Gulf to Asia was 2.6 times that of the Middle East to Asia, market demand for tons and nautical miles was greatly boosted.
China has increased its procurement of crude oil, and the OECD countries' inventories are relatively low, and the potential for additional purchases has gradually been realized. Supply disruptions in the Middle East led to a rapid decline in the inventories of various oil importers. The oil consumer side as a whole is at a normal level, and the marginal performance of the demand side is stable. In order to ensure the stability of the consumer side, countries' demand to increase crude oil purchases has entered the fulfillment stage. According to a Bloomberg report on August 20, Rongsheng Petrochemical and some state-owned refineries have purchased at least 8 million barrels of Iraqi crude oil, requiring immediate delivery; PetroChina, Sinochem, Unipec, Rongsheng, etc. have purchased a total of 10 million barrels of Saudi stock; in addition, some Chinese refineries have also received at least 14 million barrels of Saudi Arabia's Changjiang quota for shipment in September, and demand for additional oil purchases has entered the implementation stage.
Continued increase in oil production may be beneficial in the long term. OPEC+ has lifted production cuts of 2.2 million b/d and partially lifted production cuts of 1.65 million b/d in October-December 2025 and May 2026; the bank estimates that there is still room to lift production cuts of 3.02 million b/d in the future, which is expected to continue to support crude oil transportation demand; according to EIA forecasts, non-OPEC+ countries will increase production by 800,000 b/d in 2026, and Brazil, Guyana and Argentina will lead production growth, driving up demand for tons of oil transportation.
3. Supply: Ongoing orders have increased dramatically, but the current fleet is seriously aging, and the leading share has increased
In-hand orders have increased dramatically. New orders for 2024Q1-Q2 and 2025Q4-2026Q1 ushered in centralized signing due to the tight transit capacity of ships in the Red Sea crisis, driving the current VLCC, Suez, and Aphra ships to account for 32.6%/29.1%/7.4% of their respective capacity, respectively, and are at a relatively high level in recent years. Delivery is expected to be concentrated in 2027-2029 due to tight shipyard capacity and poor schedule. As of August 2026, the ratio of current orders to capacity of the tanker fleet is 25.21%, down 0.06pct from the previous month, and is at a historical high since 2015.
Currently, crude oil turbines are seriously aging. Crude oil tankers/VLCCs account for 23.11%/20.80% respectively, and the operating pressure is high; the next few years will be a period of concentrated accelerated aging of ships delivered from 2009 to 2012, and the pressure to dismantle ships will increase. The recent rapid increase in on-hand orders may mitigate this potential threat.
Oligarchs are compounding sanctions and increasing supply constraints. The top ten VLCC shipowners in the world control a total of 404 ships, accounting for 42% of the global fleet. The industry concentration is at an all-time high, the supply side is artificially locked down, and the freight and profit center is rising; the share of sanctioned crude oil turbines is rapidly increasing, while shadow/sanctioned fleets are inefficient, and supply or decline.
Risk warning: geopolitical risk, risk of major power relationships, risk of declining market demand or imbalance between supply and demand.