Super profits for tanker shipping companies thanks to Ukraine war

MARGIN OF MORE THAN 38%

Tanker shipping companies are experiencing golden times, partly due to the consequences of the Russian invasion of Ukraine. This is evident from an analysis of the results of five listed shipping companies by ShippingWatch.

The five, Hafnia, Torm, D’Amico, Scorpio Tankers and Ardmore Shipping, saw combined sales more than triple last year to $5.7 billion. No less than 2.2 billion of this remained as net profit, a margin of over 38%. The best was Scorpio Tankers with a 51% margin.

The Russian invasion on February 24 last year immediately caused chaos in energy markets and demand for crude oil and fuels skyrocketed, leading to an explosion in tanker rates. At that time, they were already on the rise because the global economy was just starting to recover from the consequences of the corona pandemic, according to the Danish analysis.

Then Western sanctions were added, with the British and American ban on the import of Russian oil in the first instance. At the end of 2022, the European Union will also ban the import of Russian oil by sea.

According to CEO Robert Bugbee of Scorpio Tankers, this has in fact created a dichotomy of the global tanker fleet. There is a so-called shadow fleet that is still involved in the transport of Russian oil, but cannot deliver to sanctioned countries.

Then there’s the other fleet — which Bugbee claims Scorpio Tankers belongs to — which doesn’t carry Russian oil. According to him, this dichotomy leads to an inefficient use of the world fleet, which in turn puts extra pressure on the rates.