INSW - Earnings call transcript Q2 2022 | International Seaways, Inc.

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Operator

Hello and welcome to stage International Seaways' Second Quarter 2022 Results. My name is Elliot and I will be coordinating your call today. [Operator Instructions] I would now like to hand over to James Small, General Counsel. The floor is yours. Please go ahead.

James Small

Elliot. you, Thank and the everyone International earnings Seaways' Good quarter welcome of for second XXXX. call morning, to

Before we of begin, advising I would like to us the everyone start on call following. today the with off by

with any quarter perception and off-hire products; to number effects rates expected anticipated the economic between charter vessels, third limitation, management company's in historical Russia purchases other cost into capital drydock of other management product scheduled a that estimated call, regional circumstances. period; tanker sales crude world pandemic; conditions, our stakeholders; of in the and the Those statements company with appropriate it make and expectations During various benefits of plans globally. such take to Any trading topics: the believes and the and strategic alternatives; objectives; of the company's demand other are on ongoing industry other expenses; factors address, its bookings, of relationship or and Outlooks and TCE merger strategy; consideration the achieve this account experience and financing consider including ongoing which revenues without current vessel, may in remainder synergies may and the build future coronavirus company's its changes effects XXXX, management's including patterns; of in trends, projected developments following issue financing prospects; by of and regarding made forward-looking expenses savings forecasts XXXX recent markets and economic, from developments, management hire, forward-looking and in and business the factors, the the and political, of Ukraine; regarding regulatory G&A S; other activity of the vessels new and and conflict of and other assumptions or transactions the and construction statements of based production any the ability of statements other and and/or our to and the the days; the operates. investments; company's and Diamond anticipated for petroleum for dividends; expenditures oil

are statements XX-Q implied of the the differ include Securities the the cause company's quarter are subject in those and by to make, from and described Form for from risks, in we have second annual assumptions, on Exchange the with first may and Forward-looking or materially actual future report cause which of expressed results those filings many on XXXX, and our and that in our or report risks, to XXXX uncertainties, International made, to XX-K, control differ forthcoming quarterly expectations, statements. actual other beyond Seaways' that that results Commission. could uncertainties Factors, U.S. could Form

Now, over Chief President let me to to and Lois? our Lois Ms. Executive turn Zabrocky. the call Officer,

Lois Zabrocky

Seaway quarterly Diamond well net for to incredibly highest our our XX very fleet from we the is COVID. negative higher development. are merger and quarter. with oil you Refined for the second and quarter TCEs In XX% of our yet On the in years the six gained strong to foundation quarter, quarter, MR S second much, merger income us Thank to everyone. they as call ago. four, We Seaways' morning, our specifically since oil strong the quarter utilization. earnings [technical from the XX The a in with rising that closed The difficulty] in ago. demand earned over recent distillates nearly on second slide and middle capitalize year book just demand continues posting rising highlights James. we a generated tanker summarize race, second results. impacts recover joining third days tankers you despite discuss refinery Thank for International our Good product are our providing quarter-over-quarter spinoff gasoline is

per income the quarter, led special share, the excluding $XXX For $XX.X $X.XX day $XX,XXX generated was per our their Product breakeven million revenues items. above million, in second Adjusted EBITDA we by net MR Carriers, of with at levels. coming

have sizeable in the only substantial and We crude. but a a not fleet operating also midsize product, in leverage, the

VLCC the to capitalizing remainder the and market in of We the favorable continue XXXX, year conditions during recovering expect space. including into on

fundamentals oil which remain limited in supply Tanker With from longer the third second are the the the coming by between the and growth rates growth quarter anticipated distances second fleet seasonally Aframaxes, West quarter outperforming and demand the closely tracking supported every to attractive, in are counter exception East. of booked demand, higher are from on quarter. the sector growing growth utilization

vessels with old. Turning quarter, to left vessels. We sold handy bullets, non-core age for of highlight of The the the XXXX And in the our of older just expense. updated our XX I to fleet proceeds on bottom monetizing program reflect costs net Panamax third an the years that survey we series MR water one for XX-year-old second of special installation recycling optimization focused our like non-core timing average two would commensurate ahead positioning fleet adjustments and exited and ballast and our built delivery. sold treatment system

efficient all years. vessels, sold XX XX generated aggregate of least and and our average lowered with profile $XXX vessels year. of We've age net since an of July proceeds approximately have nine our below to We after old million costs years fleet of last oldest age

alone, $XXX fleet. vessel or Asset our of tracks $X values million per averages appreciation high-end fleet In nearly for share. at the remain at values our the July XX-year

to including discipline, to maximize returns. opportunistically, fleet our maintain shed will older looking We tonnage

to lowest peer highlight loan sheet fleet net XX%, of revolver group. includes quarter top healthy a hand the of million. right million over made quarter. in liquidity We the the of we and value capacity. This slide, values, the $XXX balance the $XXX with amongst On gains $XXX the recent cash a extremely is of total ended Using one our million

is then our included This increasing direct FSOs of liquidity successfully unlocking shareholders XX% million the selling delevered bonds baby during result on We Seaways' a quarter, our redemption strength. of actions making by we at the repayments taken aimed million financial a while of August. revolver. stake and value for Our enhancing for pleased us We $XX this of saves X.X% fleet, fixed on $XXX new several all And value our outcome credit process million million, payment FSOs. the a venture. the XXXX. our disposal. on monetize with captured with facility tanker were our joint in proceeds, we after the inherent followed implied the a in We cash our the favorable rate streamline that that $XX options to $XX in that lasted contract mandatory in $XX million months in closed To evaluating

component $XX.X have In or tanker the we about capital continually Jeff have cost past admits more million our will market, of of in speak market conditions of record returned and the his lowered specific Seaway's strategy. capital. is call. over we X% actions strong track five We Returning decades. This in major the seen portion years. our steps consistent XXXX, is a with these our most of challenging

of returning are build consistent track to capital to proud We our record shareholders. upon

$X.XX quarterly per During to share. the we quarter, dividend doubled our

options $XX of have quarters, dividend conclusion million buybacks, in XXXX. in merger. end XX over and last to in program million with of connections of to we million the return time. the $XX our S in to expiration the Board's a our shareholders announced with program to as we've the purchase the our $XXX our million authorization the regular special program another dividend, share the Today, to $XX returned boost Over use to program to shareholders Diamond upsize We quarterly of our this extend of capital and one over intend

such of allocation merger three We newbuilding chart tanker one, environment since allows display sheet consistently as strong in relative and of at point quarter. rates the five. the fleet supercycle significant number of shareholders; since number principal in they strength the approach, the low our year years. payments balance last exemplifies XX This to earnings the climb a really ship The maintaining range with ordering MR growth to each continued debt the capital the mid-XXXX. of third that quarter. Slide VLCCs; on the balanced update and of diversified on rate the the and over number the in larger makes the last portfolio a the types Our current second S Diamond to the class quarter. mentioned, the rates start these returns in And as and opportunistic renewal for has the not two, cycle, seen left three,

ramp of coming America clock are India, and East, mile is starting With this with strength July. the COVID we product XXXX energy summer up slide to in becomes June are our Clarkson's Russia down in in illustrates an our in China been United priority are recovering and As a Seaborne XX%. out earnings its is at They in creating up lockdown, to crude. slowly transportation scrub for just while demand, refinery there to seeing their Columbia. long levels projects enjoying actions ton about but vessels. have XX demand products drawing on now Suezmax soaking on and South from asset on Argentina, surely are inventories they continues nearing building breakeven. crisis This the from sourced is tonnage increasing operating runs. has our Afras VLCCs the and been products Ukraine, while leverage. Overall, States, and haul voyages highs, approaching Atlantic Chile, Middle recovery the building this the basin and growth years demand product the happening fitted security

create towards drivers Ukraine markets. The when address day to actually volatility XXX barrels X and to XXXX energy six. at million slide is Russia end to We million continues to time expected per Turning demand be per XXX demand barrels increase the about XXXX. a XXXX situation in during day. in Oil growth the tanker and million puts approximately in barrels in further of IEA underlying

demand certainly could growth. GDP oil slowing course, Of curtail

East West, Norway, positive particularly markets. long-haul for However, by led oil is tanker production is the Americas, a in Guyana of supportive growth, the trade and

chart, long-term seaborne supportive for inventories Russia's providing trade right a continue demand to forward Ukraine, left for by and be this and products, their days Combined to pulling margins and longer trade to crude. chart, We with as patterns level movements to world reduced to U.S. the continue leading barrels XX refining oil throughput during SPR anticipate less we robust, scrambles demand evidenced moving is this indicating cargoes clean and the of cover. the tankers. exported have than of OECD for need replenishment, lowest further in the decade, and demand bottom been to changes released distances. related In higher higher refined of remain invasion see As time bottom exports. healthy crude

slide seen growth on the recordkeeping. X%, earnings. The book Next tanker At the modern net key lowest replacement fleet for of tanker remained in has XXXX. of the drivers positive we seven, at tanker main level overall order since supply X% June continues just been have that

fleet from meaningful the yet the years illustrates of incentives Over years, increased previous average left increasing upon XXXX. The materialize average last high age XX older but bottom the Based the has chart XX tonnage. values, to to volumes in the X%. have to recycle continued tanker recycling of

are old We fleet number on paired see continue vessels against factors limit of growth. deliveries and deliveries clearly newbuilding A the you turning side, bottom can in have right-hand the years XX to chart tanker dwindling.

other remain from tankers for for reputable filled into slots as yard are with sectors. contracts Newbuilding well XXXX shipping shipyards

Second, are new near ordering. newbuilding uncertainty And all-time owners tempered future thirdly, orders around from limiting regulations. prices tanker highs, have environmental been by

of reduce of trading, these over CFO, before commercial our and turn may other We implications to don't second that on capacity provide XX classes in financial time Jeff? some the Afras, capacity review. XX many full we by been also I'm Pribor, fleet the and to the fleet, West going are We vessels continue realized. or them take sectors. being have it Jeff call many out and the believe tanker trading routes MRs full by seen impact quarter of the now to controlled and may from to governments and the Russian have which sanctioned monitor ship

Jeffrey Pribor

Thanks Lois, everyone. and good morning,

Let's go results second quarter greater straight detail. the in to reviewing

summary income the $X.XX million. of quick $XX second net a the quarter, loss Before results. million per turning million XXXX. provide the or When net In adjusted of in Net was had our an second to slides, share. the EBITDA income financial a let me per diluted million second $XX.X or was for $XXX.X just quarter or share per of we to $XX.X of $X.XX one-time items, share compared $X.XX quarter diluted excluding

of Diamond to XX%. I'll revenues nine. segment in the increase significant to slide to quarter the compares first Crude fleet with million attributable Carriers and days of segment, TCE $XXX spot the in the turn and quarter Suezmax the quarter, discuss days to second merger. combined the almost This $XX Crude is were very compared to please the Tanker higher coupled for S for business TCE Now our with beginning million million $XX Tanker the in on down divestment. it's as substantially a sectors revenues results the In LRX revenues increase for last Crude for million to to segments, $XX Tanker segment. MR the more quarter, due year-over-year, which a result were revenue Product substantial rates revenue second Aframax rates the with largely doubled year. of Suezmax

right-side quarter EBITDA the second million from in just periods difficulty]. increases year million in compared of leverage our Adjusted significant last to demonstration take [technical $XXX the slide. These the quarter a operating EBITDA the to significant markets. and clear was of $XX for the prior million recent adjusted at $XX of Looking represent

provide where review to XX, earnings and quarter quarter and turn third Now we update. a rate XXXX slide please second

of For our average an to over XX% at a Aframax XX% at date, under our spot Suezmax QX XX% far average approximately of available at of average of average day. days spot spot of have XX,XXX. we available our $XX,XXX XX. days little a so for of days quarter XX% $XX,XXX days viable per an the one for about bookings booked day, of our of an VLCCs spot

estimated XX. Naturally, On breakevens week are different average per our report are that be difficulty]. spot the turn this every slide months caution XX% of booked need the day. we at The prefectures to these MR forward International that breakeven of is illustrated to the days you we indications side, TCE third for in earnings on quarter Seaways about next overall $XX,XXX $XX,XXX slide. cost quarter. of cash an almost XX Please rate [technical a

quarter lower Our payment the the breakevens our schedule this our credit for with in amortization to fourth are of first facility on quarter the in XX this next months due scheduled change year.

service principal At expense. the as for all-in like as cover must which costs, costs, As and do, as our we to rates guidance well confirm for to of purposes. always, own are always these daily cost cash also drydocking modeling operating vessel scheduled vessels costs, earn I amortization, G&A point, the expense interest I'd remainder debt year this the

which management We day, includes follows. X,XXX related as and OpEx, expect regular Suezmax other $X,XXX, various our and LRX insurance, year full Aframax VLCC $X,XXX. for $X,XXX, all running fees daily $X,XXX classes MRs similar costs, per expenses

million, our and respectively, million year. to drydock We CapEx expect the $XX for expenses to $XX be

on anticipation water mentioned previous these ballast in costs I As our call, upgrades are [indiscernible]. related other systems earnings to to and XXXX treatment

slide guidance. XX. can by to over For drydock CapEx with you Continuing a and more breakdown on detailed quarter cost

naturally cash due in fees million treasury. of increase XXXX expense million, to expect to $XX $XX higher interest We

expect million, $XX finally, For shareholder million cash $XX up G&A expect million increases in $XXX we costs. mandates on the and of costs $XXX to we to million And mainly depreciation. project year,

can go XX to our bridge. we for Now cash slide

Moving of with million. total from second liquidity left $XXX quarter We right. cash began to the and

proceeds decreased leasebacks of the $XX in our from We expended JV CapEx. This course, swap Debt million revolver quarter, drydock EBITDA During liquidity. from a sales, $XXX of repayment, income $XX net FSO about quarter. million. was cost We the proceeds received was sale after vessel of loans million refinancing term Equity two the million, us from million. service million million. $XX JVs was quarterly sale leasebacks offset and $X $XX $XX depletion $XX by million and sale adjusted $X of of in payment from proceeds debt fees which, dividend and on terms. Increased million and and $XX was million

[technical $XX and from the this the charges Most increase million in is pools Lastly, rapidly other to we working capital on negative of due had rates, a of the bunker quarter. to due difficulty]. during impact doubling impact rising substantial receivables of

these of to million end expect approximately these $XXX for difficulty] [technical liquidity we stabilizes, flow. some resulted Combination reduce all the a million. this of total $XXX in a ebb natural As factors quarter of of balance with and cash

Now like XX. please sheet. briefly balance turn our about I'd to to slide speak

June we of $XXX had XX, compared long-term. As in to $X.XX billion assets million of

have addition, we credit $XXX remained In million that facility undrawn difficulty]. [technical

XX% of out, in at Lois June and as loan-to-value net Our pointed reduced has to has conventional fleet been July. XX% our XX

outstanding senior lowering X.X% Lastly, in of capital. June totaled not million included further [technical difficulty], paid the notes, XX we our cost on $XX

slide XX. to Turning

total debt is with total our $XXX If million capacity. revolving at our you June at billion See, of balance $X.XX undrawn look XX. debt

both senior we've composed proceeds debt in of of May, existing to used million XXX mentioned The As on [technical revolving million capacity facility to secured a $XXX of a facility facility. senior few aggregate million this aggregate times, repay difficulty]. facilities from three we an $XXX term the loan new new in $XXX credit

profile our than of. average new updated us the this saving $X [technical basis our of continued senior very $XX business. and points, press environment release sustainability filings. features the inventory two owner first Importantly, we facility features, and like of detailed rate XXXX, debt million about the by reduced Stock XXXX payments link and I'd debt by extended and to million maturity support. which the linked advancing about was This oversubscribed, difficulty] its similar top-tier ship that schedule our that very York highlighting more enhanced two our years, in we're and interest senior of the facilities financing XX much and times Exchange-listed It's to to proud operator larger the initiatives to our Seaway to worth sustainability existing and thank New covenant facility just package sustainability payments. also is the bank group [ph] for seat approximately the the improve to in We committed in remain

to point our remarks. senior over to closing the comments. So like our is debt, the revolver, portfolio. make turn of our XX% concludes putting for that of now make call to last our Lois entire XX% link I'd That I'd like up my features sustainability onto debt the

Lois Zabrocky

entirety. here we in build All captured investment balance Thank the detail, Jeff. in synergy slide would We in from $XX in the have to very proven summarize you will XXXX. I much, them value, preserving while right. highlights Seaways we everyone its XX, with Seaways On which I million sheet. you encourage provide briefly. over cost savings International read merger quickly

Our margins grades. earning today's fleet is steadily at strengthened

good are stewards of fleet balancing fully payments installments are our with to metrics. growth shareholders newbuilding capital, financial consistent healthy VLCC The and remaining returns We on funded.

today imbalances in and likely at and with seaborne and cycle. significant from of are from appropriate of flexible to expect trading vessels distance robust be commercial supply we us grow Regional has allowed a creates shrink limited consumers. to under and expand the for moments what higher vessels sources leverage in the capitalize will expected remained while the removed operating focused to demand, The approach. in are fleet. model operating disciplined age and continue This to oil contract is eventually to as cycle positioned company a tanker Our

balances. culture linked seafarers debt staying are and investing strong reporting up in reduce corporate We this of a our with message safe fleet transparent build footprint, with and We ESG our appropriate keep of diversity sustainability checks in our portfolio. backed carbon growing governance the incentives upfront and ESG imperative, and to

and to Thank all provide very for up that, with questions. operator, evolve And are We the open stakeholders. would these a priorities we continue lines like to today. much to for for you platform listening meaningful striving

Operator

Instructions] from question Omar you. Our [Operator from comes Jefferies. Thank Nokta first

ahead. Your line Please go is open.

Omar Nokta

discussing of over Thank really the merger, Good and of have S years the the you behind know in the morning. you sale streamlining Yeah. quarter. paying just your Lois, touch, that, And revenue just that relative of like wanted with several you. offer visibility. to reason hand, you clearly expanding non-core comments, And maybe the it's really would FSOs. tanker mind it. to one Congrats the just what Hey, you focus long-term And business. most looks nice a came your sale the did on on to been other were hand, on it's past very a But on business the strong the nicely. on to how good guys. recently, obviously, Diamond it The here earlier I -- off decision. guys amount

sense decision it. I kind to wanted what you monetize a get just So, to the drove ultimately of from

Lois Zabrocky

Thank much, very Omar. you

-- all able elements. partners. us, we And first FSO, the environment. indeed, of posting into on addressing satisfied, technically price an new rate components not is joint And being was a really contract was for for were decision-making by went the handled fixed all, our divested assets was that think did excellent and that congratulations we International of Seaways the the therefore, was value not of venture inflationary not we why it I that I have those very and FSO. think all So, in on non-core. of your But return control It provided that managing the shareholder to getting the realize a being much we felt and win-win. really transaction a

Omar Nokta

it. Got

fleet? about your it's a as Lois. on but clearly rejuvenation. think That about well so not and earning So, older a we other based this It's you cash this more the flow your and today forward. coming to far for looking stronger thinking then maybe age? move thus potential years a streamlining come the fleet, of Thanks its And of just second you maybe younger at side Do side. really how with product results S makes Okay. you the fleet? what the quarter average of fleet, isn't modernize problem timed, with business XX, Diamond maybe take well Clearly, together this guidance age What fleet do the But much you incoming But sense. quickly very XX or of guys "just obviously "of quarter. off third and advantage the going streamlining, out about part somewhat and the for reported sort that and bit quickly you've think back. is

Lois Zabrocky

the newbuilding tons, we'll And have now three I say would Diamond the first with be X VLCCs over we're Well, thing have deadweight and under nine is we million delivering. years that that merger we S, old.

realize we've raise overall, over were when I the that discipline on improving And steadily at months, would So, continue able been any really will vessels. we say our XX the or not the resales. flows profile. of that to last selling to sold strong we poor that the holding equity values fleet have we constantly And and of type discounted vessels we did look continually our and the then, XX markets were on very and cash

that considering. would a good are we're say, can same us earn in to optimally. today making would continue that say I in you we have And pretty sure I approach able position So, expect had the our ships to

Omar Nokta

Yeah.

Jeffery Pribor

Yeah. Omar, Jeff. it's

XX renewal, underscore me XX Let fleet age. our over nine if if talk fleet the and selling deadweight under of tripling you still talk you -- just times, units, that. years in mean, having of doubling vessels that's about vessels the I think

shape we're in of renewal. terms think in good I pretty fleet

referred been the of think care optimization lowest really as fleet to the I that. program, taking it's

where about we feel we think good pretty I are. So,

Omar Nokta

Yeah. No, agree. I

you thinking exposure and that of exposure that you've a very market. do the now of that a fairly many as you guess, fine-tune before general, you good you've from And dollar bolstered with side to as obviously, that focus You more on Afras gotten times, having it's thinking do end more this guys definitely when operating guys now just recently. whether your product. to ready you crude strong to benefits platform. product the spend? of on incremental crude the we've in and deploying your focus asked in look or sort the situation here you're product? Do you very, about in on ahead you Suezes put -- sort that well business How Where terms you've and this are seen I question you I've you've gotten -- capital, but of seen liquidity got,

Lois Zabrocky

the a And a the strengthen with now fleet something with of we sectors. a and right have the meetings led that and then our I products necessarily we're just sit management Board. of now we're beauty seeing witnessing that's balance right -- these one think solving we And that following for not And And have tomorrow. MRs, team, the being the we what crude, bit those that that already each in the based one strategic I true think have think and of change. the I in is sectors, was step crude, mid-type of each by table crude. what and -- toehold big of as legs -- the scale we on constantly, true that of any is before we can the on we the

going to limit not us, I'm So, Omar.

Omar Nokta

Great.

Jeffery Pribor

Omar, year, investment in But of thing that And you understandable is And quite been has speculative chips talking in ships. terms to people gotten if other lot that's the expensive for have oh, investments. a about, vessels add, like our we of based those coming any have. in those Shell of be at looking if we'll next projects sector, there's such with our well-positioned dual-fuel look be more on projects at liquidity three that to

Omar Nokta

Yeah. Thanks, Jeff. Lois. over. That's for me. turn Jeff. helpful. I'll Thanks Thanks it No, no. it Very

Lois Zabrocky

Omar. Thanks you. Thank

Operator

from Ben Stifel. Nolan Our comes next from question

You open. ahead. Please go line is

Ben Nolan

competitors some Hey, check and some seen chartering few just time their one, guys. wanted I on higher charter the on flows. of I We've the a outlook market. have put and strategy, chartering a of in vessels out, both chartering handful. to cash Number those

on in your frothy time -- just off. chartering about does market feel in rolling Do sort do guys of charters the is, keeping The and some you of are terms other presence have capacity? that locking there up paying other for little you side them? Or specifically one that thinking you a are it of

Lois Zabrocky

Okay.

just So, from Ben. it of start, the kind taking

on So, the steady. itself, commercial pool, on into And locking we'll market one-year side, time looking charter high-level And department pretty mean, Panamax two-year then, continue has time sectors. the at the the I different international charter in indeed up as secured comes a charter, a rates.

QX You and our and if in pretty if in And vessels in QX we -- something we they're the that's to looking see all the sectors them we much that happen. other out XX a everybody over make extend day. way QX, then can have for can look we those opportunities was will

Ben Nolan

on maybe and Okay. that in charter Could bit the provide a locked there? little more you've time color you two-year one

Lois Zabrocky

Yeah.

We about at. think don't are talked we've rates haven't those -- I where

of the extension on an One would on the of sector. one charters years, fourth probably is And MR, is in and the think, quarter. other in that those seen on we've is Suezmax commence a that time oil that with for and for an a years the an six the bought couple two scrubber, strongest company I major

So, rates, Yes. do the done actual due juncture. that in sure think course. out I we don't will I'm we've that putting this at

Ben Nolan

Well, -- the fine. just ship is types even somewhat That's helpful.

So, things if this I I -- that. a all there's goes I -- maybe guess right. have two The well, appreciate follow-up, here. and to

out? underperform thinking done equities And that's to the there. half given you similarly, where just is obviously, coming catch tight. we've these certainly quite product might do play you with is of Lois, mean, haven't are think in crude? it's tankers on. ones having usually -- you from of market is, really product and that inverse and product there just moment, a but normally Or First that everything share dynamic better. bigger just structural have be when be as the It's you updated back guys to up tanker then how up you perspective, at ships a Or part Any a the are going I crude is more seen you going in things those I thoughts seeing and you, well we just the this do tough we're are chalk count think outperform, price? guess, about having play Do place to than that how seen the for in weird Do a of Russia, VLCCs something do fleet think all, things that? that is there. what fleet? on a

Lois Zabrocky

of part part. give first and the to the start notice that, Well, I'll thinking then on second Jeff I'll take

you somewhere also drawing about down lowest year. had the of to from the of day. up understand, several and And this were crude on China, ramp what wood, of and we VLCCs, They seeing So, the you in China. and knock we inventories that had coded million a starting lockdowns you're quite end imports right? the relax around the Asia barrels speaking years have intense -- X.X summer, into pretty restrictions in China of so China, specifically towards refineries COVID amount

on the it is that So, a Europe, that's think pulled that crude of Part part Recently, had that been and Vs. East. of the to we going also into I some it previously expect exports continue, Western because seen million some day over has long-haul of of million is day displacing to increase. right, barrels a and barrels Gulf to it those the X.X the exports averages, U.S. July U.S. continue for and rolling XX expecting producing

going to along reenter barrels space. additional start that the element the of we'll haul, we So think

see coming the star have beneficiaries the and So, Hemisphere, now Suezmaxes our Western more man, yesterday staying in along And the in the in just Chief really the And one mentioned Derek the are Afras Commercial the the due inefficiencies things that to the happening market we meantime, been is that are of the course. of the Western Hemisphere. the in in trades the party do Biden VLCCs right and to time hard they Saudi XXX,XXX plus barrels will all moving with and things, party. are Arabia, going to that. along that a only for But of going September. I moving come unsettled OPEC unusual said think these because market they're along elements got come volatility to right? places, little increase there's a VLCCs lot the to bit barrels of will of So, do a

However, Saudi day between we combined production. quietly increased and in understand what their UAE barrels a July of close X crude the to million from very

share will price. I you Jeff, all think, dovetail if to out these. help of of about the these So, elements can And in talk then,

Jeffery Pribor

to. Love

yet. when others. some to bit S, see sort I think lump maybe quarter a you on So, that a crude or of that point, because of were kind product bit us the overlooked focused may that least this and the a area it some us research your ripping see yeah. weighted little maybe And at didn't bit investors were before tankers little towards we in Diamond that Ben, of

loss year, an look glad for My have large a what our I including more. to investors. price to it already almost loan investors, for we're So, saying mean, at We're shares optionality renewed, stock this our been I opportunity our to Omar $X.X -- XX% net that value, tremendous about ourselves. appreciation but could NAV. discount was a with reaction at -- here still sitting as of been that's fleet billion and to liquidity,

a So, good investors, think that's ourselves. we for opportunity including

Ben Nolan

All morning. right. guys appreciate my I this questions you convoluted tackling

Lois Zabrocky

No, Thank no. you.

Operator

Riley. from question comes Burke next Liam B. from Our

Your line is open.

Liam Burke

Lois. morning, Good you. morning, Jeff. Good Thank

Lois Zabrocky

Good morning.

Liam Burke

Lois, redistribution Russia MRs. capacity on side, But about the of of imbalance, obviously, driver talked global rates is refinery the how has help that. regional the a you product the on much

Lois Zabrocky

is I U.S. in huge a strength would the exports of largely that the Gulf. MRs the say, Liam, piece the from

You're over a day. seeing exports barrels million diesel X.X

of million a the You see out Gulf approaching gasoline X barrels day.

still U.S. the Coast. in into gasoline You're East bringing

lift. has So, the we ton-mile, and product helps Because real and going Europe. Largely, MRs also did our seeing going all overall, carriers Middle buoy year coming a Clarkson MRs, right? India and product XX% from East the right? that be by trade that on So, the elements of to a up to in to LRs, this product nearly are that's those

Liam Burke

But online the been there's on understanding midyear. in online normal in order And see of basis? I there's the amount trade like. out came side, fair capacity XXXX, looks leveled of of then, now, Do book after the came first Okay. more earlier? sort capacity do crude rate a tanker understand a capacity quarter you the what you disruptions by stabilization right on think

Lois Zabrocky

tend so. in mean, be owners push delivery XXXX. reluctant than them I what are tend XXXX fourth year would take very the the say next lighter I fourth see Yes, And quarter, in deliveries to in you to once into quarter get you to forward. and the they have been

we see indeed, out, Liam. starting that So, to are level

Jeffery Pribor

growth last net be could this any the tankers year for while. Liam, fleet in a of

Liam Burke

Okay.

Jeffery Pribor

Most negative observers beyond. look flat would looking out You're and say. at to XXXX to you as

Liam Burke

you, Thank Jeff. Thank you, Lois. Great.

Jeffery Pribor

Thanks Liam. Take care.

Lois Zabrocky

Thank you.

Operator

Lewis comes next BTIG. Greg Our from from question

Please open. is go ahead. line Your

Gregory Lewis

had Yeah. for question. my the for to opportunities you. Understanding you question Thank transition and INSW. I continues taking conversations that company dual-fuel remember in dating Hi. energy morning. may a but look with vessels. be broader, thanks the the good I about myself, of for kind I and bigger And LNG potential picture Lois, being in

vessels. the where U.S. probably we're liquefaction what's kind charter going gas could just conversations, to Qatargas even at of LNG product Is probably kind some company on in in maybe a our we of needs there's it be is track Or see the coming the to in looking sector that continues vessels, the crude that a focused just point, the really a point? there's guess going so, just an curious, investment about that lot given global more this business. on -- periphery segments I at of and maximizing the on conversations markets, And lot -- not of online but to market

Lois Zabrocky

been our the the Head VLCCs. our team I the courses our Bill has in three of Operations. tracking a delivery -- are heavily like sailors mean, engaged LNG little for how about you talk bit phrased one that in new is thing course. and of Nugent it that -- periphery. our team LNG the Bill undergoing The I on that, the

William Nugent

with is Qatargas expertise our we Nakilat time, Well, in-house. and Sure. Q-Flex a operate did for still long that and ships for those ships

the So, and [indiscernible] in we in through that's out vessels warning here as or for the now team us taking with dual-fuel new training with something joined that on going merger, these three preparation And that. we're retain expanding then today and elsewhere.

take lowest to ships. ready are those I do. crews ample asked got we've ready think -- do whatever And crews us on to to the we So,

Lois Zabrocky

So, thank you, Bill.

what definitely we would gas the keeping So, is out. tankers, and well of markets say that that as as count track are I we never

say, So, that toward because wouldn't be I forever we pivoting is the be step tankers know we oh, would dual-fuel to even decarbonization. a only

William Nugent

are transport. We energy

Lois Zabrocky

move Yeah. We energy.

Gregory Lewis

And the a M&A. like of function ask this Great. think then, like the I it -- one, is as some about I'll it I secondhand opportunities. strategy, and just It of But guess I company I as just a seems company, it's if renew, to we Okay. we're maybe the going product a seems make But very i.e., willing the to newbuilds hey, in get management, newbuilds. honor I super management, need Or the side, product right? portfolio purchase call. guess, go crude about safe different crude crude up side, we on -- MR and looking probability come newbuilding than thinking crude, it's sale mean never. more as between on at we and Should out that's be I say ordering be lot on has portfolio the the look kind large it is in lower and sometimes and the never say the -- INSW times few to newbuilds to guess, to, is of and

Lois Zabrocky

oil what No. on will dual-fuel, very our with interested charter chartering company particular, is when time to partner, decarbonization, or to to really seven-year name partnership a for on being moving either The we able crude in are able able look a look and right? an strong make in find that forward product. definitely we -- is opportunity on -- partner enabled So, Shell we're that when choice, that we

Jeffery Pribor

we're I is right? in like with long-term we've newbuildings, engines Yeah. market newbuildings with period, mean, that speculative charter. a not thing in the the saying the their conventionally been VLCCs, for so, that not significant since And customer on they're dual-fuel XXXX fuel it's major Shell shelf, about partnership

with in-house with that the to with the help was we've developed so intellectual that towards Nakilat and we is dual-fuels something capital and going example, experience, current us LNGs before experience from previous talking really envies projects. -- So for Bill look

that at prices. projects terms we'll speculatively are working it as look the just said the customers well But be of As across could to in that current fleet board question, towards an likely the size. said, earlier I more with as

Gregory Lewis

very you Great Okay. to hear Perfect. much. guys. Thank

Lois Zabrocky

Thank you.

Jeffery Pribor

Thanks, Greg.

Operator

Q&A. concludes our Lois hand for CEO, remarks. Zabrocky, This I'll back now final to

Lois Zabrocky

very quarter, for QX. looking you to International you and Seaways our this for much. an tuned Thank exciting everyone joining Thank space. stay on We're second

Operator

to like you We'd for concluded. thank your now has call Today's participation.

your disconnect now may You lines.

International Seaways (INSW) 9 Aug 222022 Q2 Earnings call transcript