COSCO SHIP ENGY (01138) shares have surged more than 8% again. As of writing, the stock is up 6.81%, trading at HK$18.2 with a turnover of HK$489 million.

The catalyst for the move is a reported surge in Very Large Crude Carrier (VLCC) spot rates for the Middle East route to over $700,000 per day. This follows a memorandum of understanding signed between the United States and Iran between June 17th and 19th.

Reports indicate that after the interim agreement between the US and Iran was reached, Chinese and Indian refineries sought shipping quotes from vessel owners for transporting Iraqi crude oil by the end of June. They received multiple offers from owners in the range of Worldscale 650-750, equivalent to a daily freight rate of approximately $700,000 to $820,000. This is roughly three times the rate before the recent US-Iran tensions.

Analysts at BOC International noted in a research report that as the passage rules for the Strait of Hormuz transition from an uncertain conflict status to an initial declaration-based management system, the market is reassessing passage routes, waiting times, and compliance costs. Vessel owners are widely adopting a wait-and-see strategy, leading to a short-term contraction in effective shipping capacity.

Going forward, market attention will focus on whether the declaration-based passage system for the Strait of Hormuz stabilizes and converges into a normalized route, and whether the pace of Iran's crude oil export recovery creates a sustained incremental demand for shipping.