Oct. 7 at 11:27 AM
$FRO's primary profit driver is its modern, 100% ECO fleet positioned in the "compliant" tanker market. The rationale: trade policy shifts are lengthening routes & increasing demand for sanctioned-alternative crude, boosting utilization for vessels like theirs. #Shipping #Oil
This demand trend is set against a constrained supply backdrop. The active tanker fleet is expected to shrink by 0.5% in 2025, with new orders pushing deliveries to 2028. This negative fleet growth, per management, supports a "muted" supply outlook through 2027. #Tankers
The combined effect creates significant cash generation leverage.
$FRO notes a 30% spot rate increase could boost annual cash gen by ~64%. With low cash breakevens (
$25.9K/day fleet avg) and no debt maturities until 2030, the model is geared to spot rate upside. #Value