COSCO SHIP ENGY (01138) rallied more than 6% in Hong Kong trading, with shares last up 5% at HK$19.33, reflecting a turnover of HK$85.17 million.

The surge comes as escalating geopolitical tensions in the Middle East intensify, with Houthi forces increasing attacks on Saudi energy infrastructure and seizing strategic coastal positions in western Yemen. This has sharply reduced vessel transits through the Bab el-Mandeb Strait, and the resulting oil price spike is likely to accelerate demand for urgent cargo loading, while soaring war risk premiums have triggered another significant jump in freight rates across major routes.

According to available data, the Middle East-China VLCC TCE surged further last week to $982,000 per day, with the US Gulf and West Africa routes also showing notable gains. The US Gulf-China route climbed to $270,000 per day, while the West Africa-China route advanced to $411,000 per day.

Industry analysts continue to hold a bullish view on the arrival of a major oil shipping upcycle. In the near term, with overseas refined product cracking spreads remaining at elevated levels, any sustained improvement in domestic refined product export trends, combined with the approach of the peak season, could drive a synchronized upward movement in both crude oil tanker and product tanker freight rates.

Looking at the medium to long term, three key demand-side drivers stand out: inventory restocking, the shift of Iranian oil toward compliant markets, and capacity expansion alongside import diversification. On the supply side, the phase-out of aging tonnage is expected to offset new vessel deliveries, with the recent VLCC acquisition spree by Changjin Shipping representing a structural market dynamic that cannot be overlooked.