COSCO SHIP ENGY (01138) shares dropped more than 7% in afternoon trading, last quoted at HK$13.81, down 5.86%, with turnover reaching HK$213 million. The stock is under pressure as geopolitical risks in the Strait of Hormuz drive up tanker charter costs, with day rates on Middle East routes approaching $500,000.

Clarksons Securities analysts noted that vessel owners willing to enter the Strait of Hormuz for loading are capturing a substantial scarcity premium. In contrast, those choosing to load cargo at Oman Bay outside the strait for Asian destinations see significantly lower average daily earnings, around $147,000.

BOC International issued a research report stating that new cargo volumes on Middle East routes remain limited. With passage through both major straits still restricted, not all vessel owners are willing to assume the associated risks. The availability of compliant vessels is relatively constrained, providing risk premium support for cargoes loaded inside the strait, while the divergence in risk premiums between different loading ports has further widened.

Additionally, new cargo volumes on Atlantic routes have notably decreased, insufficient to sustain a rapid and continuous rise in freight rates.