Scorpio Tankers’ bottom line shows a big deficit for 2021, in which low oil demand kept rates low. Several factors point to an impending upswing, though rates remain weak into 2022.
Like its competitors, major tanker carrier Scorpio Tankers comes out of 2021 with a large deficit.
The company, which is led by Robert Bugbee, reports a net deficit of USD 234.4m for 2021, a drastic dive from a net profit of USD 94.1m in 2020, show the annual figures Monday.
Revenue from the carrier’s fleet of LR2 and MR tankers in particular lands at USD 540.7m compared to USD 915.8m in 2020. The reduced revenue is primarily due to lower spot TCE rates on Scorpio Tankers’ tanker vessels.
Low oil prices in the beginning of 2020 resulted in filled-up deposits and low demand, which have put its mark on the tanker market, also into 2022.
”These market conditions, coupled with underlying oil consumption that has yet to reach pre-pandemic levels, have had an adverse impact on spot TCE rates throughout 2021,” writes the carrier.
The fall in rates was, however, counterbalanced by income from vessel sales, most recently in January, when Scorpio Tankers sold 12 LR1 tankers to Hafnia.
In an interview with WPO last week, Bugbee deemed 2021’s market ”terrible,” though he expects it to turn around after the first quarter.
”Things will have changed in two to three months with the development in the numbers we see in the US and with the decisions that have been made in countries like Norway, Denmark and the UK,” he predicted.
”As the year unfolds, the upswing will only gain strength. Deposits are almost emptied, and the fleet of product tanker vessels is low, so 2022 will be a good year,” stated Bugbee.
