JPMorgan has released a research report maintaining a positive outlook on tanker shipping.

COSCO SHIP ENGY (01138) H-shares and A-shares have recently underperformed the broader market, and the bank reiterates its "Overweight" rating, recommending investors take advantage of the pullback to accumulate positions.

The bank notes three developments supporting its view. Saudi Arabia has sold approximately 60 million barrels of crude oil for delivery offshore Oman in September and October, equivalent to roughly 30 VLCC cargoes, providing significant shipping demand support for the transshipment system outside the Strait of Hormuz. Meanwhile, freight rates across various routes remain elevated, with VLCC average daily time charter equivalents on the Oman-to-China, West Africa-to-China, and US Gulf Coast-to-China routes at approximately $860,000, $525,000, and $414,000 per day respectively. The bank's base case assumes average VLCC daily time charter equivalents of $135,000 and $100,000 for 2026 and 2027 respectively, well below current spot levels. Under the 2027 base case of $100,000 per day, COSCO SHIP ENGY H-shares and A-shares trade at price-to-earnings ratios of approximately 11 times and 14 times respectively; if average daily time charter equivalents reach $178,000, the multiples would decline to approximately 6 times and 7 times, indicating significant upside potential for earnings.