Tanker owners are reporting the strongest earnings of the war. Scorpio Tankers said its LR2 product tankers have secured fourth quarter bookings averaging 181,000 dollars a day so far, roughly 150 percent above the 72,283 dollars a day the fleet earned in the third quarter, while its medium range tankers are booked at 56,000 dollars a day, up from 31,183 dollars, and Handymax vessels at 40,000 dollars, up from 24,253 dollars. The booking figures are preliminary, covering 44 percent of expected LR2 revenue days.
Scorpio reported third quarter net income of 224.3 million dollars, up about 165 percent on a year earlier, including 152.6 million dollars of vessel sale gains, on a fleet that has shrunk from 99 vessels a year ago to about 75. It held about 2.1 billion dollars of unrestricted cash at October 26 and raised its quarterly dividend to 0.75 dollars a share from 0.45 dollars.
The mechanism is the war itself: longer voyages, displaced vessels and larger ships pulled into crude trades have left fewer product tankers available. Saudi carrier Bahri reported a tenfold profit jump on the same rate surge in results published yesterday. Site market tables put tanker freight up 12.37 percent on the week. The rates hold only while the disruption does, which is the risk Scorpio is pricing by selling vessels and raising the dividend rather than ordering at peak prices, its four VLCC orders excepted.