Shares of COSCO SHIP ENGY (01138) tumbled more than 7% in the afternoon session. At the time of writing, the stock was down 7.61% to HK$15.66, with a turnover of HK$473 million.

The decline follows news that while a provisional agreement has been reached between the US and Iran to reopen the Strait of Hormuz, shipowners responsible for transporting crude oil and natural gas globally remain cautious about the practical implementation of the reopening. Many are citing previous instances where ceasefires have broken down and are choosing to wait and see. BIMCO, the world's largest direct member shipowners' trade organization, has warned that several key details in the US-Iran agreement still need clarification and that it cannot be deemed safe for navigation until then.

Analysts have pointed out that for the oil shipping market, the actual impact stems from the transit situation at the Strait of Hormuz. Transit volumes through the strait remained low last week. Future transit conditions are expected to fluctuate with the conflict situation. The view is that improvements in Hormuz Strait transit will be gradual rather than immediate, with core influencing factors such as transit methods, safety, and costs still unresolved. If the strait reopens, it is likely to gradually return to normal levels.