Teekay Tankers: The recent rally is not sustainable
The year 2022 began on a sluggish note for the crude tanker shipping market amid the Omicron-led demand concerns, coupled with highoil prices (a result of curtailed supply from OPEC+) that limited the seaborne trade. On the contrary, the crude tanker market boomed as
spot TCE rates of crude tankers in general and of mid-sized vessels, in particular, rallied in the aftermath of the Russia-Ukraine conflict,
which led to global oil trade disruptions and the rerouting of cargos.
Heightened geopolitical risk (rising tension between Russia and the West) coupled with high inflation and expectation of reduced economic
growth led to a decline in key market indices, but Drewry’s crude tanker index rallied over the past three months to register a growth
of 21.1% (44.6% YTD). Comparatively, the stock price of Teekay Tankers (TNK) skyrocketed to a record 93.2% YTD as the company’s
Suezmax and Aframax vessels (80% of TNK’s fleet) benefitted the most from the market disruptions. Furthermore, nearly 94% of its fleet
operates in the spot market, which proves to be an advantage for the company in the strengthening rate environment. Moving forward,
we believe rates will remain elevated in 2Q22, highlighting the potential of generating a significant cash flow.
Drewry, since 1970, has been providing research and advisory services on the global Maritime and Shipping industries and has established itself as a firm with long history of credibility and expertise on various aspects of the maritime industry. Leveraging this in-depth market knowledge and understanding, we have extended our offering to deliver a unique, independent investment research service on globally listed companies operating in the maritime industry. Under the brand Drewry Maritime Equity Research and in accordance with the FCA, DMER led by Rahul Kapoor and his team, offers fundamental analysis on listed companies. DMER analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. By combining these market-leading resources with seasoned sector expertise and commercial awareness, we are able to offer a highly differentiated and comprehensive investment research service to prospective investors in listed maritime companies. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.
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