Cathay Pacific Haitong: Repeated geographical changes, medium- to long-term logic, focus on lower oil transportation opportunities
The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that geography has repeatedly not changed its medium- to long-term logic, and the oil transportation boom can be expected to continue, focusing on the bottom of oil transportation opportunities. It entered a “super bull market” in two stages in 2022/25. The aging of oil tankers will accelerate in the next five years, and tight platforms will guarantee a “supply bottleneck.” Even without a geographical conflict, the boom will continue for several years. If the strait recovers and the oil transportation capacity utilization rate returns to a high level, Changjin's demand for inventory control and inventory replenishment will be further enhanced. The 2026-27 tanker's high profit will be determined, and dividends will support the lower valuation limit. If Iran lifts the ban, oil transportation is expected to repeat the “demand accident”, compliance requirements will increase by 5%, and it will be difficult for the shadow fleet to return. It will be extremely prosperous and will last for several years, opening up room for rising valuations.
Cathay Pacific Haitong's main views are as follows:
High-frequency tracking: demand for oil transportation has been repeatedly reduced due to repeated geographical reductions, and oil freight rates remain high for a one-year rental period
Strait tracking: From mid-June to early July, the strait recovered for a short time, and freight rates soared and fell; since mid-July, the geography has repeatedly affected the Mander Strait. Bowan exports have been reduced again, and Yanbu Port has also been reduced
Demand and freight rates: Exports from the Middle East have shrunk in the past month, while production has increased slowly in the US Gulf and South America, etc., but shipowners are determined to raise prices based on tightening supply and demand in the medium term, and VLCCTCE still maintains a one-year lease level
Chinese tanker tracking: All COSCO Haineng tankers stranded in Bowan left in June, and 2 VLCCs orbiting the Suez Canal also left the Red Sea in July. Currently, all Chinese oil tankers operate efficiently outside the bay
Export tracking: The strait was briefly unblocked and part of the Middle East resumed, and the US Gulf has not increased production again due to repeated geographical conditions
From mid-June to early July, the strait was briefly unblocked. Due to limited windows, global crude oil shipping exports increased 10% month-on-month, and still fell 5% year-on-year — the Middle East recovered, and the Gulf of America quickly fell to before the conflict
Since mid-July, both Hormuz and the Strait of Mande have been blocked. Exports to the Middle East have declined again, and there has been no significant increase in production in the US Gulf. Global crude oil shipping exports have fallen by more than 10% year on year in the past two weeks
Import tracking: The strait recovery window is limited, and the need to replenish stocks has not yet been reflected
Asia accounts for more than 60% of global crude oil imports by sea, and is highly dependent on the Middle East. The Middle East conflict has had the most direct impact on Asia, with limited impact due to the diversification of European import sources
The impact of imports is lagging behind. In July, global crude oil imports recovered month-on-month, and still shrank by 3% year-on-year. China and India switched to Rosneft, Japan switched to the US Gulf. Demand for stock replenishment has not yet been reflected
Risk warning: risk of geographical situation, risk of economic fluctuations, risk of sanctions, risk of oil price risk, risk of failure to implement environmental policies as expected, risk of safety accidents, etc.