The stock of COSCO SHIP ENGY (ASX: 01138) rose by more than 8% in early trading. At the time of writing, the share price had advanced by 7.82% to HKD 19.45, with a turnover of HKD 415 million.

Reports indicate that last week, vessel transits through a key strait increased by 3% week-on-week, reaching 14% of the average daily volume for February. Very Large Crude Carrier (VLCC) transits specifically saw a 13% weekly increase. Time Charter Equivalent (TCE) rates for VLCCs surged significantly last week. The rate for the Middle East TD3C route jumped to nearly USD 500,000 per day, while Yanbu saw rates of USD 230,000 per day. The US Gulf rate rose by nearly 30% to USD 150,000 per day, and the West Africa rate soared over 80% to USD 170,000 per day.

Analysts suggest a medium-term outlook where tanker capacity utilization could return to high levels if strait transits resume. From a long-term perspective, the potential lifting of sanctions on Iranian oil could create a super-cycle in the compliant tanker market, potentially lasting several years and offering significant potential for both earnings growth and valuation expansion.