Frontline CEO Lars Barstad distinguished himself from other tanker owners by using a metaphor far away from baseball to make his point.
While tanker CEOs such as Hafnia’s Mikael Skov, Ardmore Shipping’s Anthony Gurnee and d’Amico International Shipping’s Carlos Balestra di Mottola celebrate the impact of continued strength in the tanker market on their deleveraged balance sheets, Barstad noted Frontline’s contrarian path.
Founder John Fredriksen bought 24 very large crude carriers (VLCCs) from Belgian shipowner Euronav for $2.35 billion, a landmark acquisition and a bold show of confidence in the large tanker market.
Gurnee, the only American on the tanker executive panel, used a baseball game metaphor to illustrate the market’s peak season, highlighting trends that will remain strong.
“We’re in a very strong upswing right now and we’re only in the third or fourth inning,” he said.
“We are taking advantage of this opportunity to expand our fleet. If we are right, this will bring good returns to investors,” Barstad said.
“We decided to consciously increase leverage because we don’t think we have reached the peak of valuations yet.”
Barstad then used a baseball metaphor that made him laugh: “We also believe that we are still in the first inning or first base or whatever you want to call it.”
Clarksons said Frontline should be bought before VLCC rates rise back to $80,000/day. Barstad and his peers can smile because they have made a lot of money in the past few years even though VLCC prices have not soared as some had hoped.
Despite their differing views on leverage, they were mostly in agreement on other points, particularly on the prospect of a tanker shortage as a future fuel solution looks increasingly unrealistic in the short term.
“We’ve been underinvesting for a long time,” Skov said. “Everyone thinks[向未来燃料]In fact, we’re seeing oil and gas still growing.”
“Frankly, it’s hard to see any meaningful alternatives in the next five or 10 years. My biggest fear is that we’re going to run out of ships.”
Omar Nokta, chief shipping analyst at Jefferies, asked by the panel moderator which propulsion he would choose if he were to order newbuildings.
John Fredriksen is selling the last of three tankers named after Norse gods.
“Unfortunately for the next generation of ships, the fuel of the future may be fuel oil,” said the boss of an Irish product tanker owner.
“So the key is to improve efficiency and vessel effectiveness, the vessel fuel technology and operational effectiveness, so that it is a conventional efficient vessel with some kind of dual-fuel readiness.”
Nokta concluded the panel discussion by asking each executive about their expectations for the second half of 2024.
Gurnee was in a good mood because the daily sales of the MR market were approaching $45,000. He threw a symbolic bouquet of flowers to Barstad beside him – this time it had nothing to do with baseball.
“I like MR, but I think VLCC is very interesting,” he said.
Barstad responded: “Thank you. Now it’s time for VLCCs to start shining.”
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2024-06-27 12:39:24
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