Institution: The oil transportation industry has entered an upturn cycle

CITIC Securities believes that structural opportunities are expected to continue on both the valuation side and the asset side of the oil tanker (oil transportation) market. The supply-chain restructuring driven by geopolitical conflicts has become the core catalyst for this current oil tanker cycle. The unprecedented revolutionary change on the VLCC supply side brought about by Sinokor’s rapid capacity expansion—leading to an improvement in supply-side concentration—may also take the form of a quasi-alliance by coordinating with MSC and Trafigura, setting a precedent in the tanker market for “suspending sailings to support prices” during certain periods. Compared with the container and dry bulk markets, the VLCC market is relatively smaller; therefore, the “quasi-alliance” trend and “suspending sailings to support prices,” as well as the reshaping they bring to the freight-rate mechanism, are likely to be even more pronounced and more durable. Against the backdrop dominated by geopolitical factors, geopolitical events such as the Iran incident strengthen the cycle-driven momentum in the oil tanker industry, and leading oil tanker companies’ profits are expected to hit new highs in 2026.