Huachuang Securities released a research report stating that the Middle East conflict has persisted for three weeks, with the market highly focused on changes in the oil shipping sector. If the conflict de-escalates rapidly within the next 1-2 weeks and transit through the Strait of Hormuz resumes, a short-term surge in demand is anticipated. From a medium to long-term perspective, if the United States and South America each increase production by 1.32 million barrels per day, the demand gap caused by the strait's disruption could be fully offset. Analyzing long-term demand, OPEC+ still possesses a potential production increase of 3.24 million barrels per day compared to levels before the previous three rounds of output cuts, accounting for approximately 8% of projected global seaborne volumes in 2025. With escalating sanctions enforcement and ongoing geopolitical disruptions, the logic of "black oil" shifting to "white oil" is expected to continue materializing. Huachuang Securities' main views are as follows:

Scenario 1: Should the conflict de-escalate quickly within 1-2 weeks and Hormuz transit resume, leading to a short-term demand surge. Once transit normalizes, oil-producing countries will be motivated to clear storage capacity and resume production promptly. However, the return of shipping capacity will experience a time lag and potential port congestion risks, suggesting freight rates could demonstrate high elasticity. Medium-term, if Iranian crude oil shifts to compliant markets, it could bring about a 5% demand increase. Iran's non-compliant fleet, being highly aged, has a low probability and faces significant difficulty returning to compliant markets.

Scenario 2: If the Strait of Hormuz fails to resume normal transit long-term, how large would the oil shipping demand gap be? Combined, Saudi Arabia's East-West Pipeline and the UAE's Habshan-Fujairah pipeline could offset 56% of the crude oil export turnover from the Persian Gulf. Short-term, if the US and Europe release strategic petroleum reserves, reaching seaborne exports of 2.25 million barrels per day, the demand gap could be fully covered. Medium to long-term, if the US and South America each increase production by 1.32 million barrels per day, the demand gap from the strait's disruption would be completely filled.

Scenario 3: If the conflict persists for several months, strategic reserves are depleted, followed by eased tensions and resumed strait transit, how would the freight market perform? A short-term surge similar to Scenario 1 is expected. From a medium-term perspective, beyond the return of Iranian crude to compliant markets, replenishing depleted strategic reserves would also translate into additional demand increments. If the International Energy Agency's projected release of 400 million barrels of strategic crude reserves is fully replenished within one year after the strait reopens, it would require approximately 25 additional VLCCs, representing about 3% of the current compliant VLCC fleet. Furthermore, nations are likely to place greater emphasis on energy security, potentially raising safety inventory levels and diversifying energy import channels, leading to medium-term additional restocking demand and longer shipping distances.

Scenario 4: If the Strait of Hormuz implements selective passage, how would it impact the freight market? The global crude oil shipping market would form a dual-track system: "Inside Hormuz" and "Outside Hormuz." The former, primarily operated by特许船东, would benefit from high freight rates within the Persian Gulf; the latter's rates would be significantly lower. However, the difficulty of covering the Persian Gulf demand gap through short-term reserve releases or medium-term Atlantic production increases would be substantially reduced. If strait transit recovers to 20%, combined with pipeline alternative exports, an Atlantic production increase of 1.8 million barrels per day could fully offset the demand gap.

Medium and Long-Term View on the Oil Shipping Market: A Major Cycle Approaches. 1) Strongest Medium-Term Logic: Sinokor's aggressive VLCC acquisitions reshape the industry, with MSC emerging as a major player. South Korea's Sinokor Merchant Marine, through purchasing second-hand vessels and time-chartering, has become the world's largest VLCC operator, holding 24% of the spot market and about 20% of the compliant market share. This has fundamentally altered the previously fragmented VLCC competitive landscape, and by replicating a container shipping-like strategy of idling vessels to support rates, has significantly boosted freight prices. 2) Strong Medium-Term Supply Logic: Fleet aging offsets new vessel deliveries. The current orderbook of 22% barely covers the potential scrapping capacity of vessels over 20 years old, with a surplus of only about 2%. Excluding scrapping, projected marginal growth rates for compliant capacity in 2026-27, considering delivery schedules, are 1.4% and 4.4% respectively. 3) Long-Term Demand Logic Expected to Strengthen Continuously: The global crude oil production increase cycle boosts transport demand, and the market share of compliant crude oil continues to rise. OPEC+ still has a potential production increase of 3.24 million barrels per day compared to pre-cut levels, accounting for roughly 8% of 2025 global seaborne volume. With intensifying sanctions enforcement and persistent geopolitical disruptions, the "black to white oil" transition logic is likely to continue.

Quick Look at Core Oil Shipping Targets: COSCO SHIP ENGY (600026.SH, 01138) and China Merchants Energy Shipping (601872.SH). COSCO SHIP ENGY and China Merchants Energy Shipping are the two main listed companies in China primarily engaged in seaborne crude oil transportation, belonging to the COSCO Shipping Group and China Merchants Group, respectively. COSCO SHIP ENGY's international tanker fleet comprises 102 vessels with a total deadweight tonnage of 20.43 million DWT. China Merchants Energy Shipping's international tanker fleet consists of 59 vessels totaling 16.88 million DWT. Their VLCC fleets are similar in size, with 53 and 52 vessels respectively; COSCO SHIP ENGY controls more international small/medium crude tankers and product tanker capacity. Assuming 350 operational days per year and a USD/CNY exchange rate of 6.9, a $10,000 per day fluctuation in VLCC Time Charter Equivalent rates would impact the pre-tax profit of COSCO SHIP ENGY's and China Merchants Energy Shipping's VLCC fleets by approximately 1.04 billion and 1.26 billion yuan, respectively.

Risk warnings include oil shipping demand falling short of expectations, slower-than-expected scrapping of older vessels, and higher-than-expected new vessel deliveries or orders.