COSCO SHIP ENGY (01138) gained nearly 3% before noon, rising 2.27% to HK$11.25 by the time of writing, with a turnover of HK$114 million.

According to industry analysis, VLCC (Very Large Crude Carrier) 1-3 year charter rates have surged since November, with 1-year rates surpassing the peak seen after the Russia-Ukraine conflict in 2022. This reflects strong consensus among shipowners and charterers about sustained growth in the oil shipping market.

Key drivers include tight VLCC supply (due to a high proportion of aging vessels and limited newbuilds for replacement) and rising demand from stricter sanctions on Russian and Iranian crude exports, boosting compliant market demand. Additionally, China's crude import demand and potential restocking needs are expected to further support the market. Analysts remain bullish on VLCC's outlook for the next 2-3 years.

Recent months saw increased crude production from the Middle East and South America, while U.S. sanctions on Russia pushed India to shift imports from Russian oil to Middle Eastern and U.S. Gulf sources—directly benefiting compliant VLCCs and driving freight rates higher.

With concentrated Middle East shipments, bullish owner sentiment, and port disruptions from typhoons, the Middle East-China VLCC-TCE rate surged to over $120,000 last week, hitting a record high. The sector expects Q4 2025 crude tanker profits to reach a decade-high.