Energy Prospectus

Anybody have any thoughts about the current prospects for tankers in this ever more dangerous environment. Top picks?

I don’t own any but is on my mind. I’m hesitant with the future outlook of continued tight oil supply and just saw a zerohedge article the other day about OPEC+ cuts possibly extending into 2024. Key word possibly… so this could mean less shipping volume globally I would imagine.

But at the same time with global turmoil that should help tanker rates..?

Hard for me to tell what risks are factored in already.

I own these:

-STNG - they ship finished products (I own)
-TK they own 300 m in cash t bills . no debt and roughly 10 m shares of TNK a mid sized crude carrier
Trading at a 200 m discount to nav

I don't own these:

TNP - Many different ship types, trading at a big discount, profits are turning, levered

INSW - they ship crude

BWET - If you want real torque an etf that only buys freight futures on crude carriers

LPG & FLNG NVGS LPG ships propane, FLNG as the name ships LNG

There a number of interesting companies to follow, some of which have been mentioned. Most companies are very profitable right now and have low P/Es. Of course a recession could change this situation at any time. In the meantime, geopolitical events have forced many shippers to take longer routes, impacting available capacity. This is dynamic and could change for the better or worse.

The companies do have some moats around them as the cost to replace their fleets exceeds their market cap, few banks will provide funding and the remaining ship building yards are fully committed. The probability of some "accident" is increasing as there are some very old ships being used to transport crude to get around sanctions, some are struggling with insurance and there are tankers being seized for political purposes.

Many of these companies have gone through bankruptcy and diluted their shares. TNP is an exception. The long term chart shows the potential for this market. While there is good potential for the next five plus years, it does come with risks.

Here are some names to look at in the course of one's due diligence:
FRO - Frontline (Crude tankers)
STNG - Scorpio Tankers (Product carriers)
TNK - Teekay Tankers (Crude tankers)
EURN - Euronav Crude (tankers)
DHT - DHT (Large crude carriers)
SBLK - Star Bulk Carriers (Dry bulk carriers)
INSW - International Seaways Inc (Crude & product carriers)
TNP - Tsakos Energy Navigation LTD (Crude & product carriers)
ASC - Ardmore Shipping (Product carriers)
2343 - Pacific Basin Shipping (Dry bulk carriers)
5LY - Marco Polo Marine (Marine logistics services)

I own INSW and LPG. Both pay great dividends. INSW has paid a total of $6.00/share since 12/2022. LPG has paid special dividends of $9.50/share since 01/2022. Since 01/2022 INSW is up 240% and LPG is up 130%.

Tankers seem to have followed in the wake of the oils today.

Some color

https://1975593.fs1.hubspotusercontent-na1.net/hubfs/1975593/Tanker%20Opinions/Weekly%20Opinion%20-%2013%20Oct%202023%20A%20Dearth%20Of%20Diesel.pdf?utm_campaign=Weekly%20Tanker%20Opinion&utm_medium=email&_hsmi=278295923&_hsenc=p2ANqtz-9Dd6ntnu8gINw18AIW2KZN8KkcTlFt6O5EbWd_w0C_w8M8oIhLHXNkG2ZgEjfqFrtOBYTMpkY96i0gij8-wC_okEQTBw&utm_content=278295923&utm_source=hs_email