Q4 2022 Scorpio Tankers Inc Corporate Sales Call
Hello, everyone and welcome to the Scorpio tankers incorporated commercial update conference call.
After todays presentation, there will be an opportunity to ask questions. Please note today's event is being recorded.
At this time I would like to turn the floor over to James Doyle head of corporate development and IR. Please go ahead Sir.
Thank you for joining us today welcome to the Scorpio tankers commercial end market update call on the call with me today are Emmanuel a Lauro Chief Executive Officer, Robert Bugbee, President Cameron Mackey, Chief operating officer wire Stinker Nelson commercial director.
Today, we issued a press press release, which is available on our website at Scorpio tankers Dot Com Inc.
The information discussed on this call is based on information as of today December 14th 2022, and May contain forward looking statements that involve risk and uncertainty.
Actual results may differ materially from those set forth in such statements for a discussion of these risks and uncertainties you should review the forward looking statements disclosure in the press release as well as Scorpio tankers SEC filings.
All participants are advised that the audio of this conference call is being broadcast live on the Internet and is also being recorded for playback purposes.
Archive of the webcast will be made available on the Investor Relations page of our website for approximately 14 days.
Be giving a short presentation today the presentation is available at Scorpio tankers Dot com.
On the Investor Relations page under reports and presentations.
Slides will also be available on the webcast. After the presentation, we will go to Q&A.
Asking questions. Please limit the number of questions. So two for any modeling questions. Please reach out to Brian or me after the call.
With that I would like to turn it over to our President Robert Bugbee.
Alright, thank you ever so much.
First of all thank you.
To our shareholders. Thank you you too.
Supporting analysts that we have.
I think that the we enter the holiday season, we had entered in good cheer I think that through all of the boys and girls who have been good. This year right on staying I think that you'd want to have lots of presence at the end of the year.
And I think that the those few of you have been.
Little bit Naughty and a short stay whole adult staying that's clearly.
Clearly not going to be having somebody presence.
I'd like to look at the actual press release itself and.
Just goes through the table related to rates quickly.
I think it's very important on the left hand side, we see the rates that we booked so far this quarter.
Those by themselves or their.
Their confirmation really of what we would say in October that solid Oh.
Going to be most analyst expectations.
Yeah.
Pete.
But they may not buy themselves. So what is actually going on out there in the market right now and what could happen as.
As we can see that basically there's about 10% lower than days left.
And on the right hand side.
Up until let's say last Friday.
This became December the.
Last Friday.
We can see a tremendous gain in rates.
But right now those right sells up until Friday have been passed by what we are fixing in the market and what we're seeing in the market.
So that last 10% could have quite a high delta.
And that could be so high that it could materially affect the that those bookings for a quarter, even though the.
Yeah.
Actual fixtures that were doing this time of year are starting to really be put it in the book for the first quarter. So what do you have here is a market that strengthening beyond what we've got here on the table.
And we have a market and we have.
Is that all closed in fourth quarter higher than the average acuity yeah.
Opening the first quarter.
Simply extraordinary outstanding numbers at all you know we are already at all time highs.
These numbers that are coming into the first corner right now.
Huge theres no other way to say that and what you will see through the presentation. We don't see this market backing off at the moment.
Real seasonal spike.
Real cold come into the northern Hemisphere.
And we had very strong underlying fundamentals that are being respected thought.
Pieces at a time charter rates for one year charter rates of me very strongly.
That's how I'd like to introduce the policy to James is talking to the details and then we'll go to Q&A with law.
Thank you very much.
Thanks, Robert well not as exciting as LR twos at $90000 per day, but it's been an exciting year for the company and we wanted to provide a brief update on recent events before the commercial discussion. So if we could please go to slide six.
Strong cash flows are transforming the balance sheet of the company and improving the quality of Scorpio tankers as an investment.
December we gave notice to exercise purchase options on six more vessels under sale leaseback.
And in total since August we have given notice to exercise the purchase options on 29 vessels under sale leaseback financing, which when completed will reduce debt by close to 500 million.
So far we used repurchases have been financed with cash flow, but with two new credit facilities for up to $166 5 million, whereas today, we can accelerate the repurchasing of more expensive lease financing and replace it with less expensive commercial bank financing.
The new facility bear interest at <unk>, plus a margin of one 9% to 195%, which is substantially lower than that 3.2 to five 4% lease financing it's replacing.
In December we repurchased $28 6 million of the company's shares at an average price of $51.20 and since July we have repurchased $3 $7 million of the company's shares for approximately $149 3 million.
And lastly, we entered into a time charter agreement for an hour or two at 37 five per day, which is subject to final customer approval, but reflects the continuing improvement in outlook and rates from our customers.
Seven place.
Well with the conversion of the convertible bond and fix additional lease repurchases. The company will reduce its indebtedness by approximately 1.3 billion this year.
And the last time the companies that was below the $2 billion was December 2017, with a fleet of 78 on vessels. So we're very excited about the progress we're making.
Slide eight please.
So far in the fourth quarter and the fleet is booked an average TCE rate of over $45000 a day.
On an annual basis, that's sort of equate to $1 3 billion in free cash flow or a little over $22 a share.
Despite extending their sensitivity chart to $60000 per day and you can tell from the December fixtures current rates are well above that but in the event rates were at average say 60000.
For the year, the company will generate almost $2 billion in free cash of $39 per share.
Slide 10 please.
Since March the refined product tanker market has been resilient.
Rates have oscillated between 30 and $60000 per day, even during seasonally weaker periods such as refinery maintenance.
Recently, we've seen a substantial increase in rates.
A confluence of factors and degree to which those factors are impacting our markets as well.
Unprecedented.
Slide 11 please.
Global inventories remain at record lows with demand continuing to outpace supply over the last two years. The U S has grown over 471 million barrels of crude oil and refined products at the same time globally distillate inventories have decreased over 240 million barrels.
Plus refinery maintenance rents have increased over the last two weeks U S. Gulf refineries operated at $98, two and 97, 3% utilization in these merits are very much needed higher refinery runs are named both now that's when our approaches and as Robert mentioned, but also next year with demand expected to increase through 2000.
'twenty three.
Slide 12 please.
T. Born refined product exports have reached record levels product exports are averaging $25 3 million barrels per day over its first two weeks of December .
With inventories near historic lows refining capacity closures and demand increasing product tankers now more than ever are being used to supply more immediate demand and from further afar.
The impact of refinery closures in places like Europe , and Australia as the parent both regions are experiencing record levels of refined product imports as you can see in the graph.
Yeah.
Since listing attack export quota as China's refined product exports have increased significantly however, as COVID-19 restrictions ease and domestic demand increases it's unclear of China will be able to maintain their current levels. What is clear is that the barrels are needed trade routes are changing exports are at record levels and ton miles are increasing.
The incremental barrel continues to become more difficult to find next year, new middle Eastern refining capacity additions will be critical to meet incremental demand.
Especially if there is an impact to a change in Russian refined product for us.
13th place.
Last week, the EU implemented its Russian crude oil import ban, stating that any vessels transporting Russian crude sold at a price above $60 price cap is prohibited from European insurance and finance.
One week is a small sample size, so far seaborne Russian crude exports have declined by almost 50%.
China and then he had been the incremental buyers since the invasion of Ukraine.
On February 1st that you implemented similar band for refined products. So.
So far we have yet to see a major shift in refined product flows and actually over the last two months Russian product exports have increased and most of the imports have gone to Europe .
In the event Russian exports of rerouted to different regions. After February 5th there would be a substantial increase in ton mile demand.
Fresh and exports decline refined products will need to be served sourced from further field, leading to a substantial increase in ton mile demand.
Every replacement scenario requires sending a barrel longer desk skin tightening vessel supply and increasing ton miles.
Slide 14 please.
Next year, we expect here linked quarter over quarter increases in refined product demand driven by increases in gasoline and jet fuel naphtha with region with regional imbalances expected to persist due to refinery dislocation demand, increasing and the potential impacts from Russia's invasion of Ukraine seaborne.
Product exports are expected to increase almost a million barrels a day and ton mile demand over 9% next year.
Since 2000, and seaborne exports of refined products had increased 19 of the last 22 years, even during the global financial crisis lower freight rate environment had typically been due to oversupply. Today. This is much different supply could be the most attractive part of the equation.
Slide 15 please.
The order book is at a record well with four 8% of stuff, we get an order yards are booked until 2025 and using minimal scrapping assumptions the fleet will grow less than 1% over the next three years.
Using higher scrapping assumptions do the fleet age and upcoming environmental regulations.
Street, the fleet will shrink over the next three years.
Seaborne exports in ton mile demand are expected to increase 3.6 and $9 seven.
Next year outpacing food crops.
The confluence of factors in today's market are constructive individually.
Historically, low inventories, increasing demand export and ton miles structural dislocations in our refinery system.
Central changes to Russian product flows limited fleet growth and upcoming environmental regulations. However, collectively together there are precedents with that I'd like to turn it over to Q&A.
Ladies and gentlemen at this time, we'll begin the question and answer session.
To ask a question you May press Star and then one on your Touchtone telephone.
If you are using a speaker phone, we do ask that you. Please pickup your handset prior suppressing the keys to ensure the best sound quality.
Withdraw your question you May Press Star then two once again that is star and then one to join the question queue.
Our first question today comes from Omar Naphtha from Jefferies. Please go ahead with your question.
Thank you Hey, guys good morning.
Yeah. Thanks for the update clearly a lot of positive things are happening both in the market and your earnings and your balance sheet.
And as you highlighted Robert for Qunar looks to be the top quarter of the year and once you're starting off here at had an exceptional or extraordinary level.
Wanted to ask basically if you could just maybe frame what's been going on in the product market recently, and especially the the six weeks or so since you reported earnings whats happened to cause rates to get to this point, where LR twos, earning as you show here 90000, a day and 75 on the Mr's.
Hum.
Uh huh.
Yeah, I'll give it a.
Hi, Omar.
To be honest the market back then was also very strong what.
What we have seen is just a continued improvement of the.
Stable strength and one of the things that we can see now as a ship owner is that we enjoy you know front haul economics, even on past calls as well so when you look at.
The TC one index as a market you know it will probably print today at 70 $75000 a day and at that time. It was probably 55 to $60000 a day, but the fact of the matter is that because of this huge exports out of North Asia.
Where the.
Destination Optionality has really kind of presented itself with a lot of the kind of chances and options for for the owner. So we are moving a lot too is now you know out of North Asia to Singapore at let's call. It a $100000 a day, we're moving it at $110000 a day $120000 range, Australia, we can reload out of Australia with condensates, which.
There's also a nifty thing for the LR twos, which with backhaul economics into the AG is also presenting yourself with about $80000. A day. What we've also seen as we moved into the back end of the fourth quarter has been an increase in exports as well coming out of the Mediterranean. So there has been an active malik market of.
Light ends moving from the mid <unk> going back to Asia. So as we've been fixing our ships with distillate into.
Into the continental into Mediterranean, we've been able to quite successfully being loading vessels as well out of the Mediterranean and the continent back to Asia. What we're seeing here is an elongation of our position. So if you look at our position is today.
On the 14th of December and in the Middle East on the LR twos, you'll see them, probably the tightest position list that we have seen for a long time and it is my view that we're going to start seeing that market to react as well even more positively. So today, it's probably printing of the world's got three O five trading 85000 on pure round voyage, but in reality because of all this.
Passengers that we can see in terms of triangulation rates are going to be substantially higher from that.
Thanks, Laura so yeah, so it sounds like that 90% and 75.
Or are low relative to what you're seeing today and I guess I wanted to make sure.
James mentioned this but is any of what we're seeing today.
As a result of the Russian ban at least some products coming in February is this or is that still a catalyst to come.
I believe it's a catalyst that's going to really show itself as we move past the fifth of February we have obviously seen a lot of the same molecules moving from the bolt on the black sea into the same European destinations and that is still continuing and as James said, we've seen an increase in volumes as we are wrapping up the stocks as much of Europe can do after the fifth.
February but the fact that the metal roof.
And this is really important is that it doesn't matter what market you're in you can be in the.
Far eastern market.
The middle Eastern market, you can be in South America, or the U S. Gulf all markets on all sizes are all ramping up so you don't have any weaknesses.
Say you that positions are being moved from that area to another area. You know you've got a good market a very very good market in all areas at the moment irrespective of what's happening with Russia now clearly what we have been seeing over the last couple of months has been this increase.
Imports into Europe distillate in particular.
But you know as we go past that fifth of February deadline replacement products will ultimately have to travel further.
The ton miles will certainly also increased for the L. A and also with more product carriers.
So one thing of course, you've got refineries are running even harder.
High utilization rates across the board.
The potential of some of these tripping over.
Kris due to the the way they run them, so hard which of course it will also increase the dislocations in the arbitrage to start moving up even further.
So there's certainly plenty of product that we've seen to move we can see increase in volumes both in China and also in the Middle East and also our products.
All of the West Coast, India, all of it going long haul and there's nothing no not necessarily only going to.
To Europe , and we're seeing also stopped going to West Africa to South America, and so on again, we're seeing this optionality on destination, which certainly for a ship owner who wishes to triangulate very effectively is very good news.
Got it yeah. Okay. Thanks, Thanks for that additional color Lars and then one final one for me just on the three year charter on the on the LR to that 37500 is the new high at.
At least I think from what we've seen in the market recently.
He noticed that this is on a forward delivery basis, just wanted to get a sense from you guys that you know how how far forward as that deployment and any thoughts on why the charter it doesn't take that ship today.
I think well I think we are.
And I wanted to instill.
Subject position I think we'd just say.
Last quarter.
Our first quarter and the why is not the childhood Hawaii.
These two as well I mean, obviously, where the market is hot and not necessarily even cause a great rate like 37, and a half thousand for three years.
You're still not anxious to you know, we're not they're anxious to pick some tonnage out.
We've got a very hot spot position were very confident of the present market.
I would leave it at that.
Got it.
Thanks, Robert I think I'll, just add to that Omar.
In terms of activity in the in the time charter market and inquiry levels that we're seeing on our projects Department. It certainly has not abated yet I mean, there is plenty of interest from for top tier customers wanting to take long term charters going forward.
Very good alright, well, thanks, guys I'll turn it over.
Our next question comes from road Mark at all from Clarksons Securities. Please go ahead with your question.
Thank you hi, guys.
Hi, Mark it's really strong.
Alright.
Yeah.
It is strong yes, so 90000 per day for a lot of juice in December .
Hello.
Considering that the market is improving by the day could you tell me.
What's the outlook in the next future.
Oh hold on just one site allows has already said that he expects me a hard no big thing in the hundreds.
Amit a lot too.
I'd say, it's sort of you know I know you stuck your neck out and said that a while back when it was quite controversial at the time that we would see.
No 150 to $200000 a day you don't have options this winter.
I would just like to comment that youre going to see 150 $200000 a day on.
You know most probably this winter but.
Probably you'll probably actually going to see that on our handy sized vessels, but.
That will give you credit for your.
What was the time.
To be by summer is a very extravagant cool the laws I don't know if you want to add to that.
I would not surprise me that this winter, we will see over 100000 don't hand ease or in malls, LR twos, which obviously a lot of it was already doing I think all segments on file.
Perfect that's great.
I guess my next question.
You know in order to explain this because.
Temporary or if it hasn't happened yet right. So have you have you seen any unusual.
The arbitrage movements.
Uh huh.
In connection with the.
Or maybe ballast leg.
<unk>.
I would say, Florida, but to answer your last question the ballast legs at the moment are decreasing and we're seeing a lot more triangulation on ela choose than we've ever seen we are seeing a lot of triangulation on M. L. A as well.
You know so.
It certainly is not increasing when it comes to the first part of the question. We're seeing a lot of product as I mentioned earlier coming out of the Middle East is certainly.
Ramping up and she signed they're ramping up and absorb.
There are also a kind of increase their production.
West Coast, India and of course.
With the the high processing that we've seen in China.
You know I think the exports going to Europe that has trebled just this year alone. So we're seeing a lot of volume, it's not only going to Europe is always a lot of it's going down to Australia. As we mentioned before that'll be that's also going to South America, we're seeing volumes going long haul longer haul than we've seen before going into west.
Our Western Africa as well so in terms of ton miles. It's not only this is defined by the fact of.
Preparing ourselves for the band Postscript of February but it is.
Fundamentals are around the globe that is kind of pushing this market into this great strength.
Yeah.
That's good color I guess on the ballot.
I guess at least the Russian potash could target to be in.
Has to be moving on more inefficient round voyage basis.
Do you think.
Well a couple of the fifth of February and obviously this is either or this is what we assume is that the doctor read of what's been called now we'll be moving this product further afield as well they wouldn't because they're only going to be doing Russia there'll be balancing back.
So that is inefficient utilization of that particular fleet, which of course suddenly means that your utilization all of the normal fleet will increase and will fundamentally contract.
The supply overall.
Yeah.
Perfect. Thank you that's all.
Yeah.
Yeah.
Our next question comes from Ben Nolan from Stifel. Please go ahead with your question.
Hey, guys a good.
They appreciate it.
Robert You you had mentioned that at this point you guys are already beginning to fix spot into <unk> I'm. Just curious if you can maybe frame in how much of one key you already have booked in and are they the kind of the rate levels that you have.
Laid out in the press release there.
Well the rate.
We haven't got it to how box.
Did that but the rate, but I could say we could infer.
That they would be at.
It did.
Up until Friday, we close down on Friday that you're reading that basically a lot of the fixtures that were done between what were some of the first of all slide eight those averages you could see it might be 70 565 would be the let's.
Let's say the starting rate of.
Q1, right now this week.
If you're talking about I'm not allowed to take those kind of longer voyages for the food.
Gonna be starting you you're starting now putting thinks he's been on the books for this week that aren't in those calculations.
Those calculations only go out to last Friday with losses.
Some of the fixes going up plus 100.
So.
Nike shops through each week more and more of that of the voyages go into Q1. So.
So basically by the end date.
Simba.
Indeed, this year you would say.
Definitely had let's say the first three weeks of Q1 booked.
Which one you know.
Crazy right.
What I was supposed to be weeks it could be.
Rising rates those three weeks you could virtually and what you want in the third and the fourth quarter and the first three weeks.
They call them you'd get to everyone comes back on January the 10th you'll have 33% to 35%.
The entire first quarter book.
Now that I think is what's super exciting is that these rates are so high and have such depth Bret.
That they have a an immediate effect related to your earnings and your.
Your your cash position.
You know you can count the backwoods, if it's 33% by let's say January .
10.
And.
That's how to how to approximately calculate bookings for it.
Okay. That's that's helpful color.
And then as it relates to just sort of the market and appreciating that as long as you laid out.
The February sanctions, they could be a catalyst or create inefficiencies that effectively shrink the.
Size of the fleet, how should we think about next year's refinery maintenance season or turnaround season.
It sort of coincides with we're pretty close to a two.
Two when the sanctions are coming in I mean, how does that I don't know how does how do you.
[noise].
Square the circle on on how all of those things are going to.
Operate it simultaneously.
Well, if we look at 2022 in terms of what that seasonality meant when it comes to refinery turnarounds, we had full steam ahead.
In the second quarter, the third quarter, which tends to be the the strongest part of our refinery maintenance period.
We're down to $2 2 million barrels that's outage in December for this month.
Compared to October was 7.6, you know in October the market was also just a strong I think that the underlying.
Element of what we're seeing today.
With capacity utilization theoretically is so high now.
No.
No kind of extenuating the type of bottlenecks. So you know this is structural so in terms of saying that there is a refinery that has to go into turnaround there will have to supply them with the you know what.
A smaller fleet of ships available to them and take that further afield and I only see that this market will kind of ride through any kind of seasonality in terms of refinery maintenance and maintain its strength.
Okay, Alright, I appreciate it thanks a lot.
Our next question comes from Ken Huckster from Bank of America Merrill Lynch. Please go ahead with your question.
Hey, Greg Congrats on finally getting to this point working through what was a certainly a longer downtime that you thought you.
I guess Robert that doesn't interest if if you're you're getting so much interest in in time charter outs and and you keep pushing it off in rates keep going up too does that ever turn into orders from the major maybe talk about the cost of Newbuild details I know, there's not much of an order book, but but what's going on in the market now.
I guess I'm you know in.
In our analytical view it.
When things are too good something typically goes wrong.
Yeah I think.
That's a great question I think at the moment, it's sort of been are.
It's been an okay place is actually at an okay place for a major.
Hey.
Being able to take that.
There's enough of a discount in the time charter rate, whether it's one year one year allowed to.
Well I was just talking to me. This morning is in 50.
50, $55000 a day so it all points to 50 55 or.
Three year right to get to the charter is getting kind of.
Profit on this fast growth.
Part of it.
So that's kind of a comforting thing they secure tonnage for a period, while skirting a profit on them.
The extremely strong market.
So they're able to get coverage when they are you know short tonnage.
At some kind of present cash flow.
Whereas if they were to translate that into a new building theyre not doing anything you're not getting that ship for.
Yes, it doesn't do anything to alleviate the problem, but the pregnant then they have cashed out.
No no no further down the curve you get the more you get the more everyone with discounted and they've just left themselves massively exposed at the front.
So you know.
Hum.
Net loss is there anything else to add having worked for major the calculation right now.
You know what will happen to do a three year charter if we cannot or why would we go upstairs.
And order something at record prices with something in the future that does not help.
Extremely stressed position than the present.
Yeah.
Makes a lot of sense.
James you talked about the you know the.
Turning to take down debt faster, obviously I think you originally were.
I think something like 300 million now youre talking the cash flow can be up to a billion. Three are there any constraints as you look into next year on what you can draw down.
And then Robert we'd typically you always tell us to wait until Thanksgiving and and see what's going on with rates. Obviously this looks at just completely different than the normal calendar. So maybe is there anything on the horizon that seasonally you know switches this or is it just going into a refinery maintenance that you were just talking about what changes the kind of run here seasonally.
James do you want to go as fast.
Yeah.
Sure. So Ken we did six more leases for till the end of this year, we still have <unk>.
Normally 60 60 vessels are more that are under lease and so there is definitely more to do recently, we've been doing it through cash flow and obviously over the next year well, we will have new loans. Since these vessels that are unencumbered and we can we can draw down on those loans and then accelerate those repurchases.
Obviously, the financing in terms of the commercial bank loans are really attractive.
And so we're going to continue to look to do that and then at some point next year, you'll start to see the impact on that kind of lower interest and principal of breakeven.
What we're really looking forward to it.
Well when it comes to the rates right now.
When I look at it it's very hard to.
You can think of things that are going to push the rates, even higher such as the February 5th situation because the products, it's kind of.
Maybe even more wacky when crude because there isn't so much as a dog fleet and product.
And even if the dog treat itself is likely to be it looked like they're going to be taking products to China or products to India, and you're saying, where the crude oil market is there going to be taking product too.
South America are all points in Africa, so huge long distances, that's going to occur but these are all things that.
So we can just create even more bullish construct and you can see from what we're talking about now we kind of don't need that the market is already.
It's me from I mean bullish she's not too weak word for it I mean, I don't know how to describe something that's meaningful.
[noise] bullish they're very bullish to Red Hot I mean white Hot I don't know what after that and it's very hard now you've got winter, we actually go to winter now in the northern Hemisphere.
And I think that that's putting a check into because we've seen the attempt dominion shipbuilding you've seen gas being built we've seen some form of energy complacency depart by the fact that world inventories are low and then suddenly you are getting this shock coming in with the extreme cold.
So because of the season itself nothing to do with Russia, because of the season itself and the.
The actual capacity of the supply.
Supply side capacity at the moment.
It is hard to think that this market is going to be anything but strong.
Yeah.
For this sort of you know.
Joining its normal seasonal period, which would normally law school way through too.
With a little bit of a hiccup with with refinery maintenance Grieco, let's say early mid June .
Oh, Hi, Robert and team. Thanks, so much for the time cause yet.
Our next question comes from Greg Lewis from BTG. Please go ahead with your question Hey, Thank you. Thank you and good morning, everybody and thanks for the update.
James I I did have a question around the fourth quarter.
Percent of days fixed.
And real and kind of really what I'm looking for are like as we think about.
Planned days and maybe some unplanned days for the quarter is there any kind of any kind of guidance you can give us there in terms of as we think about total revenue days for the quarter and then also with that you know, sometimes we see like a ballast leg of of a.
Although vessel you see that a lot in crude where maybe.
Maybe it's not ends up being like some some zero revenue days is can you provide us any color around that just is.
I think that would be helpful.
Yeah. So there was some additional off hire days and those were updated and.
So those came down and that's because the dry docks are taking a little bit longer due to COVID-19 restrictions in China.
In terms.
A great generally I think you know what what we see which is probably a little bit different than crude.
And probably you will see a little bit more of a some triangulation and triangulation on the mr's.
Obviously pretty well now and where it's very surprising now it's what wires and his team has been able to do on the LR twos and I'll, let him speak to that but what you have is a incredible amount of distillate that needs to go from Asia to the west and so it is creating some very very nice backhaul and it's also benefiting the M ours as well.
And that's really when you look at kind of a benchmark rates and where we are how we're benefiting from that.
I think if you look at you know what we're doing now and in the current curve.
I think youre seeing the benefit of that triangulation and that's probably the biggest difference can paper correct.
Okay.
Great and then and then I did have a question as we see more realizing that the MSR market in the Atlantic Basin tends to really be we fix it and we get to work.
As we see more cargos are loadings out of the middle East as those refinery runs.
Is there a refinery.
Volumes increase.
Is there any way and I think Robert you touched on a little bit of a way to like as we think about fixing forward I E are we.
At today on today's mid December .
It is kind of the actual loading time for that vessel. That's fixed today is that kind of seven to 10 days is that like a seven to 10 days ahead of its actual loading and starting to realize that right.
Is that kind of a fair a rough way to think about it.
So last why don't you discuss the linearity.
All right. Thanks, I'll start with you.
Yeah look I'm, Greg on MRO.
It's seven to 10 days it can be it can vary a little bit depending if it's east to west or with the U S Gulf and the U S Gulf tends to be even shorter than that could be three to five days sure. When it comes to choose it tends to be anywhere between two weeks to three weeks out.
Depending on where that particular load port is but mainly for the middle east there'll be two or three weeks I'll, probably two weeks when it comes for North Asia and it is a little bit more tricky when it comes to we're loading out of Australia with the condensate is worried that can be also even further out and you need to make sure that you have enough ships start to kind of maintain.
That makes sense, but that's about right.
Okay, Great and then and then I just did have one other question just as we think about it.
Everybody is seeing the impact of that.
The crude oil embargo and the Turkish Straits and locking up our.
I guess I guess.
Parties are trying to prove out.
Where that crude on those vessels as you know it was originated from as we think about the product market and in the upcoming an embargo that's taking hold in early February .
Everyone knows the headline numbers of Russian refined product seaborne exports.
Any kind of rough guidance are or where you can talk about in terms of what's coming from that region as opposed to what's coming out of the Baltic.
Yeah.
First of all that there is more product coming out of the bolt, who then out of the Black Sea.
Turning to the first point in terms of all the issues around Turkish Straits.
It is at least to my knowledge now has been sorted out with the P&I clubs with the wording that has been adapted or adopted by the different players and ships are now transiting through the funny thing is it was more because of the vessels loading out of kind of the CPUC with the Kazak crude which of course was not sanctioned making sure that the P&I.
Average was in place.
We have seen now that that has now been sorted.
Sorted out when it comes to the volumes out of the Black Sea posts fifth of February is a very very good question.
It certainly is all down to what supply of ships is available in the dark fleet to be able to move it because they will try and do whatever they can to maximize that but I think they're going to have an issue with finding enough ships to do so.
Okay Super helpful. Everybody, Thanks, and if I don't talk do you happen to have a great holiday.
Thank you.
And ladies and gentlemen, with that we'll conclude today's question and answer session I'd like to turn the floor back over to Robert bumpy for closing remarks.
Thank you. Thank you very much everybody I'd, just like to tell us something that wasn't covered I mean, we we've been bullish Sweden very bullish and we even talked on the last conference call about $82 and it would be bought.
At the end of March.
Yeah, clearly, we havent been bullish enough I mean this is we just wanted to come for you guys. The Wow. This is especially now with a cold coming in in the.
Various governments policies are just continuing to run down the inventories and not implement.
Are the driving speed limits et cetera, you're creating the amazing and tight market here.
And that $82 a share in E V is.
No longer are optimistic there's no longer even not that bullish.
The timing of reality quickly becoming reality. So we're not we haven't talked about it much on the cool you've got key things coming to me and it was not just the earnings. It's the is he is he bother you too. So it's a great position and we wish you all a very happy holidays and thank you again very much.
No you'll support and your trust things.
Ladies and gentlemen that will conclude today's conference call and presentation. We do thank you for joining you may now disconnect your lines.