Some of you might find this interview on the tanker sector more eye-opening than I did. I did think the interviewer, J Mintzmyer, posed some good questions. But, overall, there was fewer items that were informative for me.
https://seekingalpha.com/article/4721367-frontline-tanker-market-strategy-and-ongoing-disruptions-podcast-transcript?mailingid=36757656&messageid=2800&serial=36757656.3430&source=email_2800&utm_campaign=rta-stock-article&utm_medium=email&utm_source=seeking_alpha&utm_term=36757656.3430
My takeaways
- There is some Russian backed crude tankers utilizing the Red Sea route.
- The interviewer suggested FRO’s leverage was around 40%. IMHO, I don’t think it is that low. That said, FRO CEO did suggest that the company does not push to get leverage down as extreme as other tanker companies
- The LR2/Aframax mix: 17-to-1. For 2024 patterns and Red Sea developments, not too surprising to me. In the recent past, it has been 11-to-7.
- FRO CEO explained the thinking behind the major VLCC acquisition.
I shall try and remember FRO CEO’s warning (paraphrased) - The Summer lull is not the right time to be making tanker investment decisions. Though I am cognizant of the traditional post Summer tanker market weakness, I did make some mistakes with some tanker holdings in 2024.
- Late trading bet on TNK. Bet size made this loss acceptable
- Not harvesting INSW gains. INSW’s supplemental div partially softens this
- With FRO, decision to harvest came too late in the cycle.