Financial Data and Key Metrics Changes - In Q3 2024, the company reported a profit of $40.3 million, or $0.18 per share, with an adjusted profit of $42.5 million, or $0.19 per share, reflecting a decrease of $37.8 million compared to the previous quarter due to lower time charter earnings [4][5] - Time charter earnings fell from $283 million in the previous quarter to $248 million in Q3 2024 [4] - Operating expenses increased by $3.1 million from the previous quarter, attributed to a decrease in supply rates and costs related to ship management changes [5] Business Line Data and Key Metrics Changes - The company achieved daily rates of $34,300 for VLCCs, $35,100 for Suezmax, and $31,400 for LR2/Aframax fleets in Q3 2024 [3] - For Q4 2024, 75% of VLCC days are booked at $83,300 per day, 75% of Suezmax days at $60,600, and 51% of LR2/Aframax days at $42,200 [3] Market Data and Key Metrics Changes - Oil in transit has reached record highs, with export volumes growing, particularly from the Americas and the Atlantic Basin [10] - Year-on-year, Middle Eastern producers' exports increased by 1.2 to 1.3 million barrels per day in October [10] - The company noted logistical challenges in trading sanctioned export oil, particularly affecting Lukoil and Rosneft [10] Company Strategy and Development Direction - The company is optimistic about the tanker market, citing a return to a VLCC-centric trade pattern driven by strong export numbers from Brazil, Guyana, and Canada [12][20] - The order book for tankers is increasing, but the company believes that effective fleet growth will remain muted due to the aging fleet and limited new builds [18][20] - The company aims to focus on VLCCs, which have shown better economic returns compared to other classes [55] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the current market developments and the potential for sustained high rates due to limited fleet growth and strong demand for compliant oil [20] - The company anticipates a prolonged period of tightness in the shipping market, with firm refining margins and high utilization rates [20] - Management acknowledged the volatility of the market but noted that key fundamentals are supportive of continued strength [66] Other Important Information - The company has a strong liquidity position with $819 million in cash and cash equivalents and no meaningful debt maturities until 2030 [6] - The average cash-based breakeven rates for the next 12 months are estimated at approximately $26,000 for VLCCs, $23,300 for Suezmax, and $23,600 for LR2 tankers [8] Q&A Session Summary Question: Is the company looking to deleverage the balance sheet while maintaining dividends? - Management indicated that they are not particularly comfortable with low loan-to-value ratios and have been conservative in their financial analysis, focusing on cash generation rather than actively reducing debt [24][25] Question: How do older ships become less efficient without being scrapped? - Management explained that older ships face high insurance costs and limited trading options, making them less efficient in the compliant oil market, which could lead to a gradual reduction in their effective fleet presence without actual scrapping [28][29] Question: What is the outlook for the dark fleet and its impact on the market? - Management noted an increase in vessels sitting idle and discussed potential solutions for recycling sanctioned vessels, indicating that the dark fleet's dynamics are complex and evolving [36][37] Question: How does the current market environment affect vessel demand? - Management highlighted that while there is currently no contango, modest contango could support trade lanes and enhance vessel demand, particularly as oil prices remain firm [41][42] Question: What is the company's view on floating storage demand? - Management clarified that current floating storage is more related to logistics and weather rather than commercial viability, contrasting it with the high demand seen during COVID [61][62] Question: How does the company view Q1 2026 compared to Q4 2025? - Management expressed optimism for Q1 2026, citing strong fundamentals and a tight physical shipping market, although they acknowledged the inherent volatility of the market [66]