CITIC SEC has released a research report noting initial signs of a partial restoration of traffic capacity in the Strait of Hormuz. Iran has begun establishing a "safe corridor" for shipping through its territorial waters, with expectations for a partial recovery in the passage capacity of compliant crude oil tankers. According to previous reports, the rerouting of crude oil via ports such as Yanbu, Fujairah, and Oman is estimated to achieve 6 to 7 million barrels per day. Assuming traffic volume recovers to 40% of pre-conflict levels and considering demand substitution from the Red Sea and the U.S. Gulf, the actual demand gap is expected to narrow to below 10%. Attention is focused on marginal changes in the Strait of Hormuz's traffic capacity. Short-term adjustments in supply chain methods are leading to longer shipping distances, and the release of U.S. strategic petroleum reserves is expected to drive up freight rates for the TD22 (U.S. Gulf–China) route. Once the strait's traffic capacity is partially restored, restocking demand is also anticipated to act as a catalyst for an upward cycle. The main points from CITIC SEC are as follows: Initial signals of a "partial restoration of traffic capacity" have emerged in the Strait of Hormuz. Iran has started establishing a shipping "safe corridor" through its territorial waters, with expectations for a partial recovery in the passage capacity of compliant crude oil tankers. According to Kpler data, since March 1, Iranian crude oil exports have accounted for nearly three-quarters of the traffic through the Strait of Hormuz. CITIC SEC estimates that Iran's crude oil exports have exceeded 2 million barrels per day over the past 20 days, higher than the 1.59 million barrels per day average in 2025. Some crude oil tankers have turned off their AIS signals while transiting the strait and the Persian Gulf, resulting in missing positioning data. In the past three days, two product tankers passed through the strait. From March 20 to 24, the daily traffic volume in the Strait of Hormuz was 2, 1, 5, 7, and 3 vessels respectively (compared to 127 vessels on February 27). Concurrently, signals regarding strait passage policies have emerged. On one hand, the Iranian Ministry of Foreign Affairs stated that vessels "can safely pass through the Strait of Hormuz after coordinating with Iranian authorities, provided they have not participated in or supported aggressive actions against Iran and comply with the safety regulations and measures announced by Iran." Additionally, according to Lloyd's List, several governments, including those of India, Pakistan, Iraq, Malaysia, and China, are reportedly in direct discussions with Tehran regarding vessel transit plans. Officials from the Islamic Revolutionary Guard Corps have established a preliminary vessel registration system for "approved" ships to ensure safe passage. This safe corridor detours north between Iran's Larak Island and Qeshm Island, entirely under Iranian jurisdiction. According to Lloyd's List, at least nine vessels have departed via this route. On March 23, the Panama-flagged container ship "NEW OYAGER," controlled by a Chinese shipowner, passed through the Strait of Hormuz using this channel, becoming the first vessel under Chinese ownership to utilize the route. Expectations remain for a partial recovery in the passage capacity of compliant crude oil tankers. The demand gap caused by limited traffic is expected to be manageable. Assuming strait traffic recovers to 40% of pre-conflict levels and considering demand substitution from the Red Sea and the U.S. Gulf, the actual demand gap is projected to narrow to below 10%. Under limited traffic conditions, the crude oil shipping demand gap resulting from the blockade is expected to gradually shrink. According to EIA data, crude oil shipments through the Strait of Hormuz amount to approximately 14.2 million barrels per day, with 74.6% of this volume destined for Asia. If traffic volume recovers to 40% of pre-conflict levels, this would correspond to crude oil shipping volume of 5.7 million barrels per day. Based on a previous report titled "Oil Shipping Cycle Weekly Discussion—VLCC Concentration Reshaping Freight Rate Mechanisms" (March 18, 2026), rerouted crude oil volumes via Yanbu, Fujairah, and Oman ports are estimated to reach 6 to 7 million barrels per day. According to a March 11 announcement from the U.S. Department of Energy, the U.S. will gradually release 172 million barrels of strategic crude oil reserves over 120 days (equivalent to 1.433 million barrels per day). If all these volumes are directed to the Far East, the actual demand gap under this scenario would narrow to below 10%. In the short term, rerouting and the release of strategic reserves are alleviating the crude oil supply gap. In the medium term, once stable passage is restored, the release of restocking demand and the drawdown of upstream inventories are expected to create a pulse in demand. Short-term projections indicate that increased shipping distances due to rerouting can partially offset the crude oil supply gap caused by the strait's closure. However, ports like Yanbu have relatively weak infrastructure and limited loading and unloading efficiency, leading to potentially longer actual voyages and situations similar to port congestion in container shipping. Additionally, for countries with low crude oil reserves, actual purchasing demand is expected to be higher, with price suitability being a secondary consideration. The pace of strategic crude oil reserve releases will need continued monitoring. From a medium-term perspective, once relatively stable passage through the Strait of Hormuz is restored, crude oil reserve inventories depleted during the closure will need replenishment. Upstream oil producers will need to clear filled crude oil storage tanks to create space for higher operational rates. Meanwhile, some countries may further increase their crude oil reserve requirements to mitigate the impact of future geopolitical risks. These factors are expected to support medium-term demand for oil shipping, helping to maintain VLCC freight rates at relatively high levels driven by demand. Risk factors include a significant increase in VLCC fleet capacity, weaker-than-expected downstream restocking demand, and geopolitical conflicts having a greater-than-anticipated impact.