Torm PLC Class A

The cost of shipping oil in supertankers surged to fresh record highs this week following the biggest wave of attacks on Middle East shipping since the start of the U.S.-Iran war, Bloomberg reported. Earnings for Very Large Crude Carriers on the benchmark Middle East-to-China route hit a record of nearly $800K/day, while the U.S. Gulf-to-Asia run fetched offers at a record lump-sum fee of $29.5M, nearly $15/bbl before additional war risks or delay fees. The Baltic Exchange, which has begun publishing an index covering the voyage from the Gulf of Oman to east Asia, estimates daily earnings on that route spiked 85% to nearly $386K/day this week. VLCC freight rates for the Middle East to Amsterdam-Rotterdam-Antwerp route also spiked to a fresh high, and the escalation had a wider knock-on effect as rates on the West Africa to Asia route reached a record high as well, according to a Reuters report citing Baltic Exchange data. Freight analysis from data intelligence firm Kpler suggests dayrates for VLCCs will stay above $100K into next year, more than double historic levels that rarely went above $45K.

TORM reported its best quarter ever, with second-quarter TCE earnings of $512 million, more than double the $208 million from a year earlier, and net profit hitting a record $338 million, driven by chaos around the Strait of Hormuz that rerouted tankers and boosted day rates. EBITDA jumped to $416 million from $127 million, and earnings per share rose to $3.31 from $0.60, with management raising full-year TCE guidance to $1.4 billion to $1.6 billion and EBITDA guidance to $1.0 billion to $1.2 billion. The board approved a $2.40 per share dividend, a $246 million payout, continuing a run that has returned $16.10 per share, or $1.5 billion, since 2023. However, CEO Jacob Meldgaard warned that the gains are fragile, as oil flows had recovered from roughly 17% below pre-conflict levels in April and May to about 10% below by July, before renewed hostilities disrupted trade again. The company also noted that roughly 70 LR2 vessels have shifted from clean products into crude, cutting effective clean product capacity by about 5%, while a quarter of the combined LR2 and Aframax fleet is under sanctions, but the tide can turn just as fast with a ceasefire.

TORM reported its strongest quarter in history, with TCE earnings of USD 512 million, more than double the same period last year, driven by exceptionally strong freight markets amid Middle East geopolitical tensions. EBITDA reached USD 416 million and net profit USD 338 million, with a fleet-wide average TCE rate of USD 59,301 per day. The Board approved an interim dividend of USD 2.40 per share, totaling USD 246 million. The company raised its full-year TCE guidance to USD 1.4-1.6 billion and EBITDA guidance to USD 1-1.2 billion, citing sustained market strength and increased visibility. TORM also expanded its fleet to 97 vessels and continues a phased newbuilding pipeline through 2029, while noting that effective clean product tanker capacity has declined by roughly 5% despite nominal fleet growth.