The provider of seaborne crude oil and petroleum product transportation services Tsakos Energy Navigation Limited (TEN) said that though the tanker market showed upward trajectory, management will keep a close eye on developments and refine its employment approach.
The Greece-based tanker company said in a stock exchange annoucement that "As we approach the end of 2018, the signs that the worst is behind are becoming increasingly evident. Global oil demand is continuing its upward trajectory."
US crude exports are soaring and finding new destinations in China and India and the global tanker fleet where most of that oil will be shipped is tightening, it said.
As scrapping outpaces new deliveries and the much-discussed IMO 2020 sulphur regulations will create supply distortions, the outlook for tankers looks more positive, than over the past three quarters.
The tanker company said that in view of this upturn, management will keep a close eye on developments and refine its employment approach accordingly in order to maximize returns to shareholders, but still maintain a strong complement of vessels on long-term secured contracts to cover the whole fleet’s expenses.
Moreover, cash generation and preservation will remain high on the agenda and therefore efficient, effective and safe vessel management will continue to be pursued vigorously, something the Company has taken pride in since inception.
As asset prices are expected to recover from the recent weakness, management will consider divesting some of its early generation tankers while looking for replacement tonnage.
On the growth front, the LNG and shuttle tanker space remain of firm interest and management is actively exploring industrial opportunities to grow without endangering the healthy balance sheet of the corporation. TEN’s two LNG carriers are employed on contracts that reflect the strong tailwinds currently in existence in that market.
“With three difficult quarters of 2018 now behind us, TEN is already taking advantage of the strong rates available in the fourth quarter. With market fundamentals such as stronger oil demand, lower vessel capacity and adequate oil supplies, particularly from the US, positively affecting tanker trades, this current upturn seems sustainable,” George Saroglou, Chief Operating Officer of TEN stated.
“In addition, with the positive, for owners with young tonnage, disruptions the IMO 2020 rules would create in the vessel supply and demand balance, TEN will be well poised to take advantage of the strong freight environment. The number of vessels in the spot market, those on profit-share arrangements and the 10 ships that will be available for re-charter after expiration of current term employment reinforces this optimism,” Saroglou concluded.