Shares of COSCO SHIP ENGY (01138) have tumbled more than 8% in today's trading session. At the time of writing, the stock is down 8.5% to HK$15.4, with a trading turnover reaching HK$354 million.

The recent decline follows renewed tensions between the US and Iran, stemming from differing interpretations of a memorandum of understanding aimed at ending hostilities, particularly regarding the terms for passage through the Strait of Hormuz. After a brief period of conflict, reports indicate that the US and Iran have agreed to halt attacks on each other and will resume negotiations in Doha, Qatar, on the 30th, with a focus on issues concerning the Strait of Hormuz.

Analysts at Orient Securities note that a full restoration of safe passage through the strait will not happen overnight. Concerns among shipowners regarding safety, insurance, and navigation regulations in the Strait of Hormuz have prevented a significant and sustained surge in freight rates. According to data from Poten, while crude oil shipping rates experienced a brief spike following the initial "reopening" of the strait due to concentrated short-term vessel demand, this did not translate into a lasting, substantial increase.

The primary reason cited is the persistently high level of uncertainty surrounding safety, insurance, routing, and maritime traffic control. These factors have contributed to a subsequent pullback in freight rates, which are expected to remain highly volatile.