CITIC Securities: Iran geopolitical conflicts strengthen shipping cycle momentum; leading tanker profits expected to hit new highs by 2026

CITIC Securities Research Report states that geopolitical influence has become the dominant factor in oil shipping cycle freight rates and valuations. Overseas shipowners are driving increased concentration, which is reshaping the formation mechanism of tanker freight rates. In the week of March 1, 2026, the one-year time charter for VLCCs has surpassed $100,000 per day, and the spot rate for TD3C is approaching a historic high of $200,000 per day. In a previous report on February 23, 2026, titled “CNOOC Shipping (601872.SH) Deep Tracking Report Three—Revisiting the Explosive Power of the Oil Shipping Cycle, Multiple Resonances Catalyzed by Geopolitics,” we analyzed that “overseas shipowners increasing capacity control and rising concentration may reconstruct the pricing mechanism.” A quasi-alliance formed by Sinokor, MSC, and Trafigura, including shipowners and major traders, has expanded VLCC capacity through second-hand ship purchases and time charter lock-ins, controlling over a quarter of global VLCC capacity, forming the largest VLCC fleet in history. On one hand, the industry supply side is evolving from a fragmented market to a “quasi-alliance” structure, significantly enhancing shipowners’ bargaining power; on the other hand, even without considering other funding sources like MSC, the fleet’s rental income surplus enables further expansion of VLCC capacity within the alliance, potentially increasing market concentration. Under the dominant geopolitical backdrop, Iran’s geopolitical conflicts strengthen the momentum of the oil shipping cycle, and leading tanker profits are expected to reach new highs in 2026.

• The full text:

Oil Shipping | Rate Mechanism Reshaping, Geopolitical Events Strengthen Cycle Momentum

Geopolitical influence has become the leading factor in oil shipping cycle freight rates and valuations. Overseas shipowners are driving increased concentration, which is reshaping the formation mechanism of tanker freight rates. As of the week of March 1, 2026, the one-year VLCC charter rate has exceeded $100,000 per day, and the spot rate for TD3C is approaching a historic high of $200,000 per day. In our February 23, 2026, deep tracking report on CNOOC Shipping (601872.SH)—“Revisiting the Explosive Power of the Oil Shipping Cycle, Multiple Resonances Catalyzed by Geopolitics”—we analyzed that “overseas shipowners increasing capacity control and rising concentration may reconstruct the pricing mechanism.” A quasi-alliance formed by Sinokor, MSC, and Trafigura, including shipowners and major traders, has expanded VLCC capacity through second-hand ship purchases and time charter lock-ins, controlling over a quarter of global VLCC capacity, forming the largest VLCC fleet in history. On one hand, the industry supply side is evolving from a fragmented market to a “quasi-alliance” structure, significantly enhancing shipowners’ bargaining power; on the other hand, even without considering other funding sources like MSC, the fleet’s rental income surplus enables further expansion of VLCC capacity within the alliance, potentially increasing market concentration. Under the geopolitical influence, Iran’s conflicts reinforce the momentum of the oil shipping cycle, and leading tanker profits are expected to reach new highs in 2026.

• Historical review shows that geopolitical conflicts often lead to short-term rapid increases in VLCC freight rates and valuations. Currently, VLCC rates and valuations are expected to further rise, with the disorder acting as an accelerator.

The Strait of Hormuz is a critical global energy strategic channel. According to EIA data, crude oil and condensate flow account for 35.9% of global shipping volume, mainly heading to China and other Asian countries. Attention is on how long geopolitical conflicts will reduce the strait’s transit capacity. Geopolitical conflicts will directly increase insurance premiums, and the redistribution of capacity combined with operational efficiency impacts can cause short-term regional supply-demand imbalances, often accelerating freight rate increases. During the Gulf War, VLCC TCE rates rose from $27,400 per day on November 26, 1990, to a peak of $65,300 per day on February 24, 1991, highlighting the effect of energy security concerns in the bargaining between shipowners and cargo owners, with the disorder acting as a stepwise catalyst. As of the week of March 1, 2026, the one-year charter rate has surpassed $100,000 per day, and the spot rate for TD3C is approaching a historic high of $200,000 per day. The increased capacity control by overseas shipowners and rising concentration are expected to reshape the pricing mechanism. Under this background, Iran’s geopolitical tensions are strengthening the momentum of the oil shipping cycle, and leading tanker profits are projected to hit new highs in 2026.

• Risk Factors:

Large-scale resumption of non-compliant ships; rapid resolution of geopolitical conflicts; lower-than-expected transportation demand; trade pattern adjustments below expectations.

• Investment Strategy:

Structural opportunities in oil shipping valuation and assets are expected to continue. The supply chain restructuring driven by geopolitical conflicts is the core driver of this cycle. The Strait of Hormuz accounts for about 30% of global crude and petrochemical transportation. Any fluctuations are likely to serve as a “bullish option” for the oil tanker cycle, with VLCCs leading resilience. The freight rate formation mechanism is being reshaped, and the off-season characteristics are weakening. Under the geopolitical influence, conflicts will reinforce cycle momentum, and leading tanker profits are expected to reach new highs in 2026.

(Source: People’s Financial News)