The share price of COSCO SHIP ENGY (ASX: 01138) has tumbled by more than 7%. At the time of writing, the stock was down 6.45% to HK$18.13, with a trading volume of HK$266 million.

The decline follows recent developments concerning the Strait of Hormuz. A temporary memorandum of understanding was previously signed between the US and Iran. On June 18th, a joint maritime information centre lowered the risk level for the strait to medium, stating the waterway was open and blockades had ceased, but also cautioned about lingering risks from sea mines, mine-clearing operations, and congestion.

Analysis from securities firms suggests that a full return to normal traffic levels through the strait will not be immediate and faces significant hurdles. Notably, according to shipping data, nearly one-fifth of the commercial vessels that transited the Strait of Hormuz on Monday were sanctioned ships involved in transporting Iranian oil.

Data from maritime analytics firm Kpler shows that of the 48 vessels confirmed to have crossed the strait, nine had previously been sanctioned for their role in transporting energy for Iran, Russia, and Venezuela.

In contrast, compliant major shipowners and vessel management companies are maintaining a cautious stance regarding the shipping situation in the Middle East, reflecting ongoing concerns despite the official reopening announcement.