When the Strait blockade turns the "second-order acceleration" into "no oil to transport," has the oil transportation cycle already peaked?

1. What happened? Why did oil prices surge while shipping stocks “fall instead of rise”?

During this Strait of Hormuz crisis, the market observed a significant divergence: international crude oil prices soared sharply, with expectations of breaking through $120 per barrel, yet shipping core stocks experienced fierce sell-offs since March 4.

After the conflict erupted, the nominal freight rates in the spot oil shipping market indeed hit astonishing historical highs. The WS index for Middle East to Far East routes soared to 465, breaking the peak levels seen during the oil crisis 50 years ago. The VLCC spot equivalent time charter (TCE) approached an incredible $470,000 to $480,000 per day. However, this surge in freight rates was essentially a false prosperity lacking liquidity support.

Currently, the passage volume through the Strait of Hormuz has plummeted dramatically. Under normal historical levels, the daily ship passage in the strait ranges from 100 to 160 vessels, but recently it has shrunk to single digits, a decline of over 90% from normal conditions. Meanwhile, more than half of international insurance companies have issued cancellations of war risk policies, with war insurance premiums increasing by 500% before the conflict. Without war risk coverage, it essentially means a halt in commercial transportation, and oil shipments within the Persian Gulf have fallen into a state of “price without market,” with no actual cargo transactions taking place.

The market’s initial reaction was mechanical—since the Strait of Hormuz accounts for 20% of global oil trade. Once blocked, all VLCCs in the Persian Gulf would be locked in the “bathtub,” with empty ships outside the strait unable to load cargo. Under extreme linear extrapolation, some views suggest that if Middle Eastern oil supplies are completely cut off, global oil consumption could enter a “wartime rationing” scenario, and the shipping industry could face a leap from “freight rate surge” directly into “trade paralysis.”