Scorpio Tankers (NYSE: $STNG) reported the biggest quarterly profit in its history on Thursday, and said that tonne-miles will go “through the roof” when the EU ban on Russian oil goes into effect later this year.
Last year the company lost $52.8 million in the second quarter of 2021, but this year the company made $191 million instead.
The profits were boosted this year by a number of factors. First, when restrictions on Covid-19 were eased, people were able to move around more and there was more demand for refined petroleum products. Second, record refining margins and low inventories have led to big increases in the amount of refined products that are exported. Th third important factor has to do with how the conflict in Ukraine has caused prices to change, which has changed the way trade flows.
The tanker owner said that bookings were strong for the third quarter, and the company has put nine product tankers on time charters for more than three years because they think the market will be strong in the next few years.
“In the second quarter, Scorpio Tankers made its biggest quarterly profit in the company’s history,” said CEO Emanuele Lauro. “Our customers expect the current market conditions to be sustained as shown by the rise in time charter rates, duration, and activity, and we agree with them.”
The company also said that tonne-mileage would be “supercharged” after the EU fully enforces its ban on Russian oil shipped by sea next year.
“Tonne-miles are going to go through the roof,” said Lauro. “Every market in the world, including Russia, wants and needs the oil, which is coming from farther away.”
A tonne-mile is a unit of measure used to calculate the transportation of goods. It is equal to the movement of one tonne of goods over one mile. Tonne-miles are used to assess the efficiency of transportation systems.
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