Scorpio Tankers Inc

The cost of shipping oil in supertankers surged to fresh record highs this week following the biggest wave of attacks on Middle East shipping since the start of the U.S.-Iran war, Bloomberg reported. Earnings for Very Large Crude Carriers on the benchmark Middle East-to-China route hit a record of nearly $800K/day, while the U.S. Gulf-to-Asia run fetched offers at a record lump-sum fee of $29.5M, nearly $15/bbl before additional war risks or delay fees. The Baltic Exchange, which has begun publishing an index covering the voyage from the Gulf of Oman to east Asia, estimates daily earnings on that route spiked 85% to nearly $386K/day this week. VLCC freight rates for the Middle East to Amsterdam-Rotterdam-Antwerp route also spiked to a fresh high, and the escalation had a wider knock-on effect as rates on the West Africa to Asia route reached a record high as well, according to a Reuters report citing Baltic Exchange data. Freight analysis from data intelligence firm Kpler suggests dayrates for VLCCs will stay above $100K into next year, more than double historic levels that rarely went above $45K.

The Strait of Hormuz remains a live flashpoint for global oil markets, keeping risk premiums embedded in tanker rates and crude logistics. Scorpio Tankers reported its strongest quarter in company history with adjusted EBITDA above $300 million and product tanker rates above $30,000 per day, while International Seaways posted record Q2 2026 free cash flow and net income of $295 million, or $5.91 per diluted share, with average spot earnings of roughly $51,500 per day. Delek Logistics Partners reaffirmed full-year 2026 adjusted EBITDA guidance of $520 million to $560 million, citing higher crude prices tied to Middle East conflict as a demand driver. Iran said its shipping agreement with Oman is nearing completion but warned the corridor will not fully reopen until the U.S. meets broader demands including sanctions relief and compensation. Energy has been the top-performing S&P 500 sector in 2026, gaining more than 30% year-to-date, though FactSet projects 2027 sector-wide earnings growth to turn negative as geopolitical tensions ease.

Scorpio Tankers reported record second-quarter earnings and confirmed a US$0.45 quarterly dividend. The company also highlighted vessel sales and refinancing moves, while noting that net debt has been reduced by $2.5 billion since late 2021. The stock has returned 56.69% year to date and roughly 7x over five years, though it declined 6.18% over the past 90 days. One valuation narrative pegs fair value at $99.22, implying the stock is 21.5% undervalued relative to a recent close of $77.86, while a separate discounted cash flow model estimates fair value at $63.53, suggesting overvaluation.

Scorpio Tankers Inc. reported record second-quarter 2026 results, with net income of US$387.54 million and diluted earnings per share of US$7.37. The company achieved adjusted EBITDA above US$300 million, returned more than US$175 million to shareholders, and declared a quarterly dividend of US$0.45 per share payable on August 31, 2026. It also lowered its cash break-even to below US$11,000 per day, strengthening its free cash flow and balance sheet flexibility. However, the investment narrative still faces risks from a 20% product tanker order book and potential future overcapacity, with some analysts projecting revenue could decline to about US$756.7 million and earnings to around US$198.2 million in the coming years.

Scorpio Tankers announced it will redeem its outstanding 7.5% Senior Unsecured Notes due 2030 and has received a commitment for a new credit facility. The notes have an aggregate principal amount outstanding of $200 million and are expected to be redeemed on July 17, 2026 at a make-whole price of 106.4 to par plus accrued interest. The company also received a commitment from Standard Chartered Bank and DekaBank Deutsche Girozentrale for a credit facility of up to $90 million to finance a portion of the purchase price of four scrubber-fitted MR newbuilding product tankers under construction at Jingjiang Nanyang Shipbuilding with deliveries in 2026 and 2027. The credit facility has a final maturity of seven years from each vessel's delivery and bears interest at SOFR plus a margin of 1.20% per annum, with terms similar to existing credit facilities and closing expected in the third quarter of 2026.

Scorpio Tankers announced preliminary daily time charter equivalent rates for the second quarter of 2026, with LR2 tankers in the pool and spot market averaging $80,000 per day across 1,721 expected revenue days, representing 88% of total days. MR tankers in the pool and spot market averaged $53,000 per day over 3,041 expected revenue days, or 90% of total days, while Handymax vessels averaged $54,000 per day over 1,169 expected revenue days, covering 80% of total days. The company also provided time charter and bareboat charter rates for vessels operating outside the pool. Scorpio Tankers estimates its fully diluted weighted average shares outstanding for the three months ended June 30, 2026 will be between 53 million and 54 million shares, reflecting the dilutive impact of its 1.75% Convertible Senior Notes due 2031 issued in April and May 2026.