Shares of COSCO SHIP ENGY (HKEX: 01138) have fallen more than 6%, extending a decline of over 30% in the past three weeks. At the time of writing, the stock was down 6.42% to HK$12.98, with a turnover of HK$215 million.

On the news front, Iran launched three waves of missiles towards Israel on the evening of June 7 local time. Air raid sirens sounded in multiple locations, including the northern Israeli city of Haifa, and explosions were reported. This marks the first attack by Iran on Israel since the US-Israel-Iran ceasefire took effect on April 8.

It is reported that the conflict has persisted for three months, with the blockade of the Strait of Hormuz leading to a shortage of cargo shipments from the Middle East. As of June 5, the Clarkson VLCC-TCE spot rate was recorded at $86,676 per day, while the one-year time charter rate for VLCCs stood at $106,500 per day.

An analysis from Changjiang Securities noted an oversupply of vessels relative to cargo in the Middle East region. Since May, the VLCC-TCE spot freight rate has been on a sustained downward trend and is currently inverted against the one-year time charter rate. This dynamic is likely contributing to the notable correction in oil tanker stocks.

Separately, Orient Securities pointed out that the entire Strait of Hormuz remains in a state of low traffic flow, high alert, and pending confirmation for passage. Negotiations between the US and Iran are ongoing. Should an agreement be reached, the oil shipping sector would enter a critical period of excess inventory replenishment and the realization of the Iran option, warranting close attention.