Okeanis Eco Tankers Corp. (NYSE:ECO) Q2 2025 Earnings Call Transcript

Okeanis Eco Tankers Corp. (NYSE:ECO) Q2 2025 Earnings Call Transcript August 13, 2025

Operator: Welcome to OET’s Second Quarter 2025 Financial Results Presentation. We will begin shortly. Aristidis Alafouzos, CEO; and Iraklis Sbarounis, CFO of Okeanis Eco Tankers will take you through the presentation. We’re pleased to address any questions raised at the end of the call. I would like to advise you that this session is being recorded. Iraklis begin the presentation now.

Iraklis Sbarounis: Thank you. Welcome, everyone, to the presentation of Okeanis Eco Tankers results for the second quarter of 2025. We will discuss matters that are forward-looking in nature, and actual results may differ from the expectations reflected in such forward-looking statements. Please read through the relevant disclaimer on Slide 2. Starting on Slide 4 and the executive summary. I’m pleased to present the highlights of the second quarter of 2025. We achieved fleet- wide time charter equivalent of about $50,500 per vessel per day. Our VLCCs were almost at $50,000 and our Suezmaxes at $51,500. We report adjusted EBITDA of $47.3 million, adjusted net profit of $26.7 million and adjusted EPS of $0.83. Continuing to deliver on our commitment to distribute value to our shareholders, our Board declared the 13th consecutive distribution in the form of a dividend of $0.70 per share.

Total distributions over the last 4 quarters stand at $1.82 per share or approximately 9% of our earnings for the period. On Slide 5, I will show the detail of our income statement for the quarter and the first half of 2025. TCE revenue for the 6-month period stood at $113 million. EBITDA was almost $80 million and reported net income was over $39 million or $1.23 per share. Moving on to Slide 6 and our balance sheet. We ended the quarter with $65 million of cash. Balance sheet debt was $631 million. Book leverage stands at 57%, while our market adjusted net LTV basis the most recent broker values is around 40%. On Slide 7, we go over our main driver behind our operational and commercial performance. That’s our fleet. We have a total of 14 vessels, 6 Suezmaxes and 8 VLCCs with an average age of only 5.9 years.

That’s the youngest fleet amongst listed crude tanker peers. All vessels are built in South Korea and Japan are scrubber-fitted and eco-designed. From a capital expenditure perspective, we’re in a very good spot with only our two 2020-built Suezmaxes scheduled to undergo their 5-year dry dock at the end of the third and beginning of the fourth quarter later this year. In 2026, we only have one Suezmax for the entire year. On Slide 8, moving on to our capital structure. In May, we announced that we declared the option to purchase back our three Chinese leased vessels, the Nissos Nikouria, Nissos Kea and Nissos Anafi. The Nissos Nikouria and Nissos Anafi have been refinanced with a Greek Bank at very attractive terms, priced at 140 basis points over SOFR, 7 years maturity and competitive amortization profile.

The Nissos Kea has been refinanced with a syndicate of Taiwanese banks led by E.SUN at similarly attractive terms, priced at 135 basis points over SOFR, with 7 years maturity and also competitive amortization profile. The Nissos Nikouria and Nissos Kea transactions closed in June within the second quarter, while Nissos Anafi closed last week at the beginning of August. With respect to the Nissos Nikouria and Nissos Kea, we recorded in our second quarter P&L a noncash, nonrecurring write-off of the unamortized portion of the previously recorded modification gain of approximately $1.1 million. This relates to a noncash modification gain recorded in 2024 under our IFRS accounting policies due to the amendment of the then applicable terms and reduction of margin negotiated with our financiers.

No such modification gain was recorded to the Nissos Anafi. As such, we do not expect a similar write-off in the third quarter. These recent refinancing transactions underscore the strong confidence our financiers have in Okeanis and the resilient, well-balanced capital structure we have built. They have lowered financing margins by 55 to 60 basis points, extended average maturities by roughly 1.5 years per vessel and further strengthened our cost efficiency. We expect to realize annual interest savings of around $1 million in the first year alone, while reducing our daily cash break-even by more than $1,000 per vessel per day. Our loan maturities are now staggered between 2028 and 2032, and we are set to soon turn our attention to declaring and refinancing the last of our legacy leases on the Nissos Rhenia and Nissos Despotiko in the first half of next year.

If our last transactions are indicative of what we can achieve, buying back these two vessels will present a compelling opportunity to deliver another meaningful improvement in our capital structure and drive breakeven costs even lower. Before passing it on to Aristidis, taking the opportunity and as we have been going through the highlights of the quarter, since our last call in May, I’m pleased with the further expansion of the universe of equity leases coverage on our name. In the spring, the DNB merger with Carnegie closed, effectively getting us covered by the combined team. And recently, we had our second U.S. analyst, Jefferies, initiating coverage. As we continue our work to expand our investor base and sell the story of our vision of becoming the public platform of choice within the crude oil tanker space for investors and other stakeholders, these are important milestones within our still young journey in the public capital markets.

So thank you to the teams of the new and older analysts and the work that they put. I will now pass the presentation to Aristidis for the commercial and market update.

Aristidis Alafouzos: Thank you, Iraklis. Q2 was a clear improvement from Q1. We had a fleet-wide TCE climbing over $12,000 per day quarter-on- quarter. We had 100% utilization in both our — in the segments we own on the VLCCs and the Suezmaxes. And I think what made the difference this quarter is how we use the fleet’s flexibility to adapt to the market dynamics of that quarter. On the VLCC side, we kept our balance of East and West positions while capitalizing on front haul voyages from the West to the East to lock in strong earnings. We fixed two vessels to go East on these long-haul voyages, which were profitable and then fix them after they discharged in the East on, again, profitable westbound backhaul. We fixed another VLCC from Guyana to the Far East at attractive levels.

And importantly, we cleaned up another VLCC that loaded diesel in the AG for discharge in Europe at attractive levels. That gave us a dual benefit of strong earnings on the voyage itself as well as optimizing back in the West ahead of Q4. So we put a lot of focus on both fixing ships to come from the West to the East that we positioned to lock in these like strong front-haul earnings, but we need to keep bringing ships from the East to the West when we find attractive opportunities to keep this fleet balance. And either we do that with backhauls from West Africa to Europe or with the cleanup voyages that we’ve really successfully been able to do systematically over the past year. On the Suezmaxes, once again, we outperformed our VLCCs on a dollar per day basis.

And we focused heavily on trading them in the West, in Europe, West Africa and using triangulation and vessel substitution to keep the ships full and moving without [indiscernible]. These tactics allowed us to capture stronger earnings where possible and keep the fleet fully employed throughout the quarter. As Iraklis mentioned earlier, we achieved a fleet-wide TCE of $50,500 per day with $49,800 on VLCC and $51,400 on our Suezmaxes. And now moving into Q3. The market has eased compared to Q2, although we had brief spikes that were more on paper like the brief war with Iran. And this is a seasonal low quarter anyways, and the outlook remains very healthy and optimistic, looking towards Q4. As of today, we fixed 77% of our VLCC in the spot market, which they all are at $44,200 per day and 60% of our Suezmax days at $34,200 for a fleet-wide average of $40,800.

The current Suezmax market, though, is very firm, and we are either in the process of fixing or we will shortly fix voyages that are at far higher rates than our Q3 guidance. So that’s looking good, and we’re excited about these 1, 2, 3 voyages that we have coming up. In Q3, our approach has been to maximize earnings given it’s a summer period and also keep this geographical balance that we like. On the VLCC, that meant staying in the East if we felt that the TD3 or local East runs outperformed, but we would expect it to turn on a triangulated basis. So we did fix multiple AG East voyages. Alternatively, when we did find backhaul opportunities for vessels opening in the East that we — that earned similar to the TD3 round voyage, we jumped on those fixtures and took them immediately.

And that also allowed us by bringing one ship from the East to the West to fix another ship that we had in the West to come East and lock in good earnings. The benefit also of these longer voyages that — fixing East and West and West and East is that if we do them in July or August, the vessel opens up in Q4. And hopefully, this Q4 is a lot longer than last Q4, which is quite disappointing. On our Suezmaxes, Nissos Sikinos and Nissos Sifnos have been fixed to go East for their scheduled dry docks, and they picked up long-haul voyages on the way with minimal ballast. The dry docks are expected to be just below 20 days. As Iraklis mentioned, they’ll take place in September and October. For the remainder of the fleet, we capitalized on the seasonal market softness by executing short duration voyages in the West, which we liked on the Suezmaxes.

We can swap them in. So if a ship is a little bit late or early, we can swap in another ship to optimize ballast and waiting time. And this really gives a big difference to earnings if the voyages are short and you’re able to limit these two factors. Now going into September with OPEC now beginning to unwind production cuts, we expect additional barrels to come into the market. and this to lead into higher utilization of tankers. We’ll come back to this a bit later, but we’re quite constructive looking at the market for the next quarter. Moving on to Slide 12. We continue to outperform the market and our peers with our modern fleet and very strong chartering team. As we’ve mentioned before, the gap widens when the market turns as we can use our nimble fleet to position quickly and take advantage of short-term opportunities.

I think this is a benefit that having a smaller fleet has that a larger fleet can’t do. And it allows us to deliver consistent results above our peers. Moving on to Slide 13 and the following slide, we’ve kept quite short since it’s August to talk about the market. We keep coming back to this slide because it tells one of the most important stories of our segment that the supply side remains structurally tight, especially on the large vessels. It’s not just about age or order book. A large part of the fleet is in the shadow trade, and we believe it’s almost impossible for these vessels to return to normal trading and compete with modern and compliant tonnage. Most of the sanctioned tonnage is also overaged, meaning that at some point, even this subsegment will require replacement.

And that replacement will have to come from the conventional fleet. This is again positive for compliant vessels like ours. By 2028, more than half of the VLCC and Suezmax fleets will be over 15 years old. Many of them — all of them belonging to the non-eco generation, fuel- thirsty less efficient and increasingly uncompetitive to our modern eco design fleet. Nearly 30% will have crossed the 20-year mark, with only a modest number of new builds scheduled for delivery. This is exactly the kind of market backdrop that will position our vessels as a preferred choice for our charters. Meanwhile, the pace of new orders remains firmly in check despite some recent orders, reinforcing supply dynamic that we believe will be highly supportive for tanker earnings in the years ahead.

Moving on to the final slide. On the overall demand and market dynamics, we continue to see a supportive setup for tankers with September, Middle East cargoes expected to be released soon, momentum to quickly return. OPEC plans to fully restore the 8 members 2.2 voluntary cuts by September with about 1.1 million barrels returning in August and September. Moving this extra crude would require roughly 20 VLCCs or roughly 1.5% of the global tanker fleet, supporting VLCC spot rates. In Guyana, Exxon has started production at Yellowtail, as announced last week, its fourth offshore development in the Stabroek block, and this is 250,000 barrels per day capacity, lifting the natural output capacity over 900,000 barrels. Brazil also came online and is exporting at peak numbers as well.

While much of this moves on Aframax and Suezmax over shorter distances, it is also a large VLCC trade. The additional volumes still contributed positively to the regional flows. Looking ahead to Q4, OPEC is weighing the partial reversal of the 1.66 million barrel production cut, excluding Russia’s 0.5 million barrels, bringing back roughly 2/3 of the remaining cuts would add about 0.7 million barrels with Saudi potentially accounting for 0.5 million barrels of that. More supply from the region means more demand for VLCC to move that crude. On the geopolitical front, Trump has reportedly threatened tougher measures on Russia, including higher secondary tariffs on buyers such as India and China and has agreed to meet with [indiscernible]. Separately, the EU will cut the Russian price cap down to $47.6 per barrel in September, which is 15% below the market.

And we’ll have more regular adjustment to this cap going forward. The outcome of these moves remains to be seen, but could materially shift trade flows as we’ve already seen with India, we’ve seen a material shift of their crude oil purchases and inquiries from the U.S., Brazil and West Africa. Just with a small example of our VLCC fleet, multiple vessels in our fleet have either been fixed to India recently or existing voyages — on existing voyages, charters have asked for India discharge options. This shows us that India is diverting a percentage of its crude purchases away from Russia towards U.S. compliant crudes. And we find that this is very supportive of the ton-mile structure. In Iran, closer monitoring of the shadow fleet could curb unsanctioned exports and redirect volumes to the conventional fleet.

But we also have the Europeans threatening snapback measures, which seem to be due by the end of August. So we’ll see if the pressure could return on Iran as well. All of these factors reinforce our constructive outlook for the remainder of the year and beyond. And I’m handing back to you, operator.

Q&A Session

Operator: [Operator Instructions] First question comes from Omar Nokta with Jefferies.

Omar Mostafa Nokta: Thanks for the detailed update. As usual, very helpful color. I do have maybe just a couple of market-related questions and maybe just perhaps on the [indiscernible], you referenced the VLCC that you cleaned up to trade diesel. Just, in general, kind of could you give maybe an overview of what you think this vessel will do after this voyage? Will it continue in the diesel trade or the clean trade? And is it possible to maybe just give a sense of kind of what the economics look like in terms of the cost of cleaning it and then what you captured in terms of earnings relative to what you could have gotten had it stayed dirty?

Aristidis Alafouzos: First of all, Omar, again, thank you for taking up coverage. It’s nice to hear your voice on our calls as well. We’ve heard you on so many other calls that it’s quite familiar. In terms of your first question on the cleanups, we’ve been doing it for over a year now, and we’ve been fixing on a spot basis with two counterparties. We’ve developed a strong element of trust with the counterparties that we fix with, where we clean up the vessels ourselves and proceed to load the cargoes. So the charter doesn’t need to get involved or take the risk to clean up the ships. This gives us a unique ability to be one of the very, very few spot owners who is able to offer their ships for these types of voyages. And we don’t see it usually happen by anyone else.

Otherwise, it tends to be on a time charter basis where the charter cleans the vessels for the trade. We have tried to fix the vessels once they’ve opened up after discharging in Europe with clean cargo for clean business whether it’s a U.S. Gulf to Europe or some kind of word similar, but we’ve never been able to. So I can say with 99% certainty that the ship will end up loading a crude cargo, either from the U.S. Gulf, maybe from the North Sea, maybe from Malta, but she’ll load a crude cargo and go East. Now on your — on the second part of the question about the economics. So what we look at is two things. I mean, if the clean market is really strong and we can — and TD3, for example, makes $40,000 — just to open in China, load in the AG and come back to China, makes $40,000, and we can earn $40,000 to go clean up in the AG, load the diesel and come to the West.

For us, that makes absolute sense because the next voyages will earn $60,000 or $70,000 when you load in the U.S. Gulf and the average will be far higher than whatever you earn in the AG. If the backhaul voyage doesn’t earn as much as TD3, then we start looking at what the averages of a backhaul voyage plus a front- haul voyages would make versus what TD3 run would make plus 1 or 2 more TD3 runs at what the paper curve is pricing or what our expectation is for the market. And if we think that the triangulated basis outperforms, we would choose that option. In general, the triangulation has worked very well for us over the past 3 years. We’ve established our relationships with the backhaul players and with the front-haul players, and it’s something we like.

But we’re not fixed on it. So in Q2 and Q3, we fixed 3, 4, 5 voyages for local AG East runs when we found that it was more profitable to do that.

Omar Mostafa Nokta: Again, very detailed. I appreciate you giving that overview. Okay. And then maybe just one follow-up, just in terms of OPEC. And you mentioned Suezmaxes have obviously done better than what you are guiding, and were seeing rates doing decently here recently. And I guess maybe just big picture as we think about these OPEC barrels, there’s been a lot of talk and a lot of expectations of this production increase. And it looks like what’s being produced now sort of outpaces the typical summer cooling consumption in the region. And so it seems that we should be seeing some of these barrels actually hit the export markets fairly soon. And just from your vantage point, are you seeing any of that? Are you seeing any incremental cargoes coming out of the Middle East as a result of these OPEC boost? Or is it still some weeks away before we start to see that?

Aristidis Alafouzos: Well, I mean, 2.5 weeks ago, 3 weeks ago, TD3 was at WS44, WS45. And we made it up a couple of days ago to 57.5%. We’ve seen more than a 20% increase of VLCC rates. And this has been — it’s obviously, there’s a short-term cycles where it’s a reason that this happens, the position list ebbs and flows. But the bigger picture is that, yes, these cargoes are coming back to the market. And at the same time that you also have the Indians diverting their supplies — supply acquisitions. So I think it’s a multitude of factors. But this week was expected to soften a little bit on the VLCCs. That’s what our team has felt. And yesterday was indeed quiet than the day before. But today, it was actually quite a bit busier on the VLCCs. And we think that we made up to 57.5%.

It came off a few points. There’s a view internally that it’s bottomed now. And this only can be because there’s more cargoes coming out and the charters aren’t able to sit back like they would have in other times and hold the cargoes off the market to have the position list grow before they come back in. They clearly have more cargoes to cover, so they can’t be as patient as they were. So I think that this is leading into an interesting September where we could see further upside. And I mean, the paper market is definitely pricing that as well. And the paper market, it’s not — it doesn’t predict the future, but it is traded by the most important parties in the shipping market who are the oil majors and predominantly the traders.

Operator: We now turn to Petter Haugen with ABG.

Petter Haugen: The first question I have written was partly at least answered now after Omar’s questions. But in terms of cleaning up, as you said, not many companies do that. But is it possible to say something about the levels, call it, the spread between either the VLCCs or the Suezmaxes versus the MR rates that will put that trades into profits? Do you sort of need MR rates in sort of the high 20s, 30s? Or is it an inflection point prior to that? So the economics as specific as you can be, please, in terms of switching?

Aristidis Alafouzos: Peter, thank you for your question. I think it depends a lot on each charter. So if the vessel is able to load directly from the terminal and load the full cargo or load a majority of the cargo and then you limit the further FTS operation that’s required, you really reduce the cost of the loading operations. And this is a cost that the charter bears. If you’re able — if some of the charters who control the terminals and have berth that can load a VLCC, obviously, you’re much more competitive than a trader who might have to buy 5 or 6 cargoes and load them individually by STS because then you need to pay for each ship that comes and the operation. So that’s a huge benefit. And then I think when does the deal make sense?

Usually, when the clean market is high and the VLCC market is low because you need to have that arbitrage where it makes sense to use a VLCC. But you can’t have the VLCC market flying because then our alternative options will be too good. So obviously, the clean market needs to be firm. The VLCC market needs to not be relatively as firm. And the charter needs to be able to control the loading to limit its expenses. And the best way to do that is to discharge and load into terminals and avoid multiple SPS operations, which are expensive.

Petter Haugen: Okay. And a follow-up on that topic. How much of your fleet is currently now doing clean — or products? And how has that developed now over the past year, roughly, so to speaking? We do remember — I think — well, I think at least I remember that was it six ships doing clean trade last summer at one time?

Aristidis Alafouzos: Yes. I mean right now, we had one ship in Q2 and one ship in Q3. So it’s not a big amount of the fleet. At times this year, we’ve had no vessels being on clean. So it really has to do, like you said, there’s an inflection point between diesel pricing east to west, MR, LR2 rates and VLCC rates.

Petter Haugen: Okay. That’s at least well — very interesting to see that someone is capable of doing this on a spot basis. Second question, and I do know this is a very sort of difficult question, but I just wanted to hear your thinking around what could potentially happen now in the case of any deal between the U.S. and/or Europe and Russia. I guess the big question is to what extent Russian barrels, both on crude and product will return to Europe. But yes, just wanted to hear your thinking around that, the coming meeting and…

Aristidis Alafouzos: Well, I mean, — the only thing that we know how to do well is fix ships or hopefully buy ships cheap. But from what our view is, I think that the bid-ask between Ukraine and Russia is still very wide. There’s clearly a very big interest from Trump to come to a deal, but I don’t know if what Russia would currently offer would satisfy Ukraine and the Europeans. So I mean, I think that if there’s a cease fire, perhaps we could see something from the United States softening a bit on the sanctions. But I think that I don’t see that Europe changing its policy anytime soon on importing Russian crude into the European markets or any removal of sanctions on the shadow fleet. I also don’t think that there’s any material risk of U.S. removal of independently owned tankers in the shadow fleet.

Maybe there will be pressure for the Sovcomflot, which is the Russian state-owned company. But — and that’s a relatively small percentage of the shadow fleet, but I do not see the U.S. rewarding independent owners who trade in the shadow fleet with sanctions removals. So I think that the ton-mile effect of Europe not importing will remain. Perhaps we see some fuel or VGO going to the United States. But I think my base case is that Trump and the U.S. remain frustrated in the medium term, and we don’t see very much progress and potentially more strict sanctions coming.

Petter Haugen: Okay. Just a final very sort of other softer question in the end here. Looking into second half and also 2026, G&A is now running at approximately $4 million. It’s been, well, up and down a few times over the past quarters. But is this now the level that we should pencil in for second half and onwards?

Iraklis Sbarounis: Let me jump in here. No, a rate of $4 million a quarter is not — should not be the base case assumption. Let me just say that over the last couple of quarters, especially in Q2, because a lot of our G&A and OpEx for that matter, is expensed in euros. There’s been an increase due to the exchange rate spike between the euro and USD. Of course, this is countered by an exchange rate swap that we have put in place, although this is below the EBITDA line. So there is a gain that you will notice through our interest rate hedge. Now setting aside the exchange rate factor, there is some seasonality on our G&A. I expect that half 2 will be — will have a lower rate than what we had in half 1. But of course, a lot of this is determined by the listing expenses that continue to creep up.

Petter Haugen: Understand and for 2026?

Iraklis Sbarounis: I think it’s a little too early to have visibility. My base case assumption would be consistent with both in terms of seasonality and overall level as we have this year, assuming that nothing crazy happens with the exchange rate that would skew the figures. Again, we are significantly hedged, but you just don’t see those numbers above the EBITDA line, you see them below.

Operator: We now turn to Liam Burke with B. Riley Securities.

Liam Dalton Burke: We discussed the unlikely event of sanctions being lifted, but the lifting of sanctions is always highlighted as a risk to the crude tanker sector. But even if sanctions were lifted, wouldn’t that shift traffic away from the shadow fleet to the more conventional vessels and still put you in a win-win situation?

Aristidis Alafouzos: Thank you for your question. I mean it’s — there’s so many different parameters that it’s so complicated. But what I — one of the likely bullish scenarios that I see is that the United States allows — and the price cap is removed, and it allows the trade to go on normal vessels again. But the shadow fleet remains sanctioned. And in terms of, let’s say, the Chinese and the Indian buyers and the utilization of ships, we’ve seen that OFAC sanctions are by far the most effective at limiting utilization. But this is for the shadow trade. If we’re talking about the compliant trade, whether you’re sanctioned by the U.S., the U.K. or Europe, it doesn’t make a difference. And I think — just an example is that, the entire insurance market is controlled by U.S. and European insurance companies.

No owner of a sanctioned vessel in the U.S., U.K. or Australia will be able to ensure their vessels or have classification or have a first-class flag while have sanctions on them. And there’s a very small overlap between sanctions of the EU, the U.S. and the U.K. It has not been coordinated at all. So the fact that they’re not overlapping means it’s very complicated for these vessels to have — if the U.S. removes sanctions, it doesn’t mean that they still won’t be sanctioned by the other two authorities. So I think, yes, there’s many cases in the different scenarios of how sanctions — sanctions reduction scenario plays out that could remain very bullish for tankers.

Liam Dalton Burke: And your operating cost per vessel ticked up again this quarter. Is there anything unusual? Or is it just your normal quarter-to-quarter variability?

Aristidis Alafouzos: I’ll let Iraklis answer because that focuses on bringing in the money.

Iraklis Sbarounis: I say this is focusing on running the vessels as best as possible and bringing the revenue. So that obviously has a bit of an impact on OpEx. But I think the larger impact has to do with what I explained to Petter earlier because a significant part of our OpEx more so than other peers, I expect due to our crew composition is based on euros. The exchange rate does play a bit of an impact. So I think partially, it’s explained by that. The rest is just, again, seasonality. Overall, I think compared to last year, setting aside the exchange rate difference, we expect that the cost should be relatively flat, maybe slightly above, but nothing significant.

Operator: [Operator Instructions] We now turn to Climent Molins with Value Investor’s Edge.

Climent Molins:

Value Investor’s Edge: My first question is also on the geopolitical side. You mentioned you’re seeing a large shift in India’s import preferences. Should this continue or even accelerate, where do you think the Russian volumes will end up? Do you think China would be willing to further increase its imports of Russian crude?

Aristidis Alafouzos: Thanks for your question. I mean, I think Trump is able to use his power against certain countries to force them to divert their crude at the expense of tariffs or sanctions. And these are countries that are more your allies or your friends. And I think that Turkey and India are more susceptible to Trump’s pressure. The Russian crude that is no longer being bought by the Turks and the Indians will have to be sold into China. They’re the only other buyer of this crude. I expect that the Indians are price sensitive. So if we see a big decrease in the Russian pricing of their crude and the discount to others grows a lot, perhaps they buy a bit more again. But the only other outlet of Russian crude is China.

So Turkey, India reduce and China increases, and it’s a dramatic effect to ton miles for that trade, which will — we already see that it stretched the shadow fleet. The shadow fleet, the positions being up in the north are diminished. The rates in that market are rumored to have increased substantially. And as we go into the winter, I do expect that there will be more purchase inquiries for older tonnage to slot into that fleet and service that trade.

Climent Molins:

Value Investor’s Edge: And this one is more on the product side, but Europe is set to crack down on its imports of refined Russian crude, which was previously allowed. To what extent do you believe that’s enforceable? And do you envision any impact on the overall market?

Aristidis Alafouzos: Well, I mean, the imports of Indian and Turkish products, it’s a sizable percentage of the European clean product consumption, but it’s nowhere near the majority. It’s a relatively small percentage. So I do think that trade flows will adjust. But it is complicated. I mean, I don’t understand the workings of a refinery very well. But I assume that they have multiple storage tanks. I assume that they blend different types of crudes to produce the optimum output of different clean products. And part of that could be Russian crudes and issuing certificates for some crude that — some products that do or don’t have Russian crude inside is messy, and it’s definitely nothing that’s occurred in the industry so far. So we’ll have to see how they — how that’s dealt with in the future, but it will definitely be interesting to see it.

Climent Molins:

Value Investor’s Edge: Definitely, only time will tell. And congratulations for the quarter.

Aristidis Alafouzos: Thank you. Hopefully, next quarter, we’re able to do the same.

Operator: This concludes our Q&A. I’ll now hand back to Iraklis Sbarounis for any final remarks.

Iraklis Sbarounis: Thanks, everyone, for dialing in and participating. It’s been a long call for middle of the summer. We look forward to touching base again in November. Thank you very much. Bye-bye.

Operator: Ladies and gentlemen, today’s call has now concluded. We’d like to thank you for your participation. You may now disconnect your lines.