Record High Tanker Rates Boost Teekay Tankers\u2019 First Quarter Results<\/p>\n
Teekay Tankers Ltd. reported the Company\u2019s results for the quarter ended March 31, 2026:<\/p>\n
First Quarter of 2026 Compared to Fourth Quarter of 2025<\/p>\n
GAAP net income and non-GAAP adjusted net income for the first quarter of 2026 increased compared to the fourth quarter of 2025, primarily due to higher average spot tanker rates, partially offset by the sales of four vessels during the fourth quarter of 2025 and the first quarter of 2026.<\/p>\n
First Quarter of 2026 Compared to First Quarter of 2025<\/p>\n
GAAP net income and non-GAAP adjusted net income for the first quarter of 2026 increased compared to the same period of the prior year, primarily due to higher average spot tanker rates and the acquisitions of six vessels between the second quarter of 2025 and the end of the first quarter of 2026, partially offset by the sales of 13 vessels between the start of the first quarter of 2025 and the end of the first quarter of 2026. In addition, GAAP net income for the first quarter of 2026 included a $22.7 million gain from the sales of two vessels, compared to a $39.0 million gain from the sales of four vessels and a $4.7 million unrealized loss on investment in marketable securities in the first quarter of 2025.<\/p>\n
\u201cTeekay Tankers posted strong financial results for the first quarter of 2026, generating GAAP net income of $153.6 million and adjusted net income of $128.3 million,\u201d commented Kenneth Hvid, Teekay Tankers\u2019 President and Chief Executive Officer. \u201cFirst quarter of 2026 spot rates were close to the highest on record for a first quarter, primarily due to geopolitical events in both Venezuela and Iran. The U.S. blockade and the effective closure of the Strait of Hormuz, an unprecedented event which has not directly impacted the operations of our vessels, continues to disrupt the oil and tanker markets and has propelled our second quarter of 2026 to-date tanker rates to new record levels. While rates have decreased from the extreme highs in the beginning of the second quarter, we are still chartering vessels at strong rates.\u201d<\/p>\n
\u201cWe continue to progress our fleet renewal strategy, which includes acquiring modern tonnage in conjunction with selling older vessels. Since reporting earnings in February 2026, we agreed to purchase two Korean-built Suezmax resale newbuildings for a total cost of $190 million with expected deliveries in 2027, and have sold a 2009-built Suezmax for $53.5 million. In total since the beginning of the year, we have now acquired or agreed to acquire five mid-size tankers and sold or agreed to sell four older vessels. These measured steps continue to modernize our fleet while maintaining significant operating leverage to the tanker market.\u201d<\/p>\n
\u201cWhile the near-term tanker market outlook remains difficult to predict and significantly influenced by highly liquid geopolitical events, we believe Teekay Tankers is well positioned to generate free cash flow and continue to renew our fleet, supported by our low cash flow break-even levels and significant investment capacity. Even as we invest in fleet renewal, we remain in a position to return capital to shareholders as our Board of Directors has approved a special cash dividend of $1.00 per share in addition to our regular fixed quarterly dividend for a combined cash dividend of $1.25 per share.\u201d<\/p>\n
Summary of Recent Events<\/p>\n
In January 2026, the Company acquired three 2016-built Aframax tankers for a total of $141.5 million and it bareboat chartered the vessels back to the seller on short-term contracts. One vessel has been redelivered with the remaining vessels expected to be redelivered to the Company in the second and third quarters of 2026, at which point the Company will take over full commercial and technical management of the vessels.<\/p>\n
In April 2026, the Company entered into agreements to purchase two resale Suezmax tanker newbuildings for a total of $190 million1. The vessels will be built at a South Korean shipyard and are expected to be delivered in 2027.<\/p>\n
In January and March 2026, the Company completed the previously-announced sales of one 2007-built Suezmax tanker and one 2009-built Suezmax tanker for total proceeds of $73.0 million, which resulted in gains on sales of $22.7 million in the first quarter of 2026.<\/p>\n
In May 2026, the Company completed the sale of one 2009-built Suezmax tanker for $53.5 million. This sale and the previously-announced sale of a 2013-built VLCC tanker for $84.5 million, which is expected to be completed in June 2026, are expected to result in gains on sales of approximately $55 million during the second quarter of 2026.<\/p>\n
In March 2026, the Company out-chartered one Suezmax tanker for $80,000 per day for a period of 10 to 12 months.<\/p>\n
In May 2026, the Company out-chartered one Aframax tanker for $60,000 per day for 12 months.<\/p>\n
The Company\u2019s Board of Directors declared its fixed quarterly cash dividend in the amount of $0.25 per outstanding common share for the quarter ended March 31, 2026. In addition, the Board of Directors declared a special cash dividend of $1.00 per common share. These dividends are payable on June 2, 2026 to all of Teekay Tankers\u2019 shareholders of record on May 26, 2026.<\/p>\n
The effective closure of the Strait of Hormuz due to conflict in the Middle East has led to unprecedented disruption to global oil and tanker markets. As a result, mid-size crude tanker spot rates rose to the second highest level for a first quarter on record during the first quarter of 2026, with rates increasing further to all-time highs at the start of the second quarter of 2026.<\/p>\n
Prior to the conflict in the Middle East, mid-size crude tanker spot rates were already at very firm levels due to a combination of rising seaborne oil trade volumes, a tightening of sanctions against Russia, Iran, and Venezuela (which pushed more trade volumes away from the \u201cdark fleet\u201d towards the compliant fleet of tankers), and the impact of fleet consolidation in the VLCC sector. This was further amplified at the start of 2026 with the removal of Venezuelan President Nicol\u00e1s Maduro by the United States and the subsequent freeing up of Venezuelan crude oil exports to move on compliant tonnage to destinations such as the U.S. Gulf, Europe, and India, to the benefit of mid-size crude tanker demand.<\/p>\n
However, it is the recent events in the Middle East which have propelled spot tanker rates to new highs. Following the commencement on February 28, 2026 of attacks by the United States and Israel against Iran, Iran has responded by attacking a range of military and civilian assets across the Middle East region, including vessels transiting the Strait of Hormuz. The U.S. has also imposed a blockade on the strait. This has led to a significant drop in vessel traffic through the Strait of Hormuz due to safety concerns, which in turn has led to a sharp decline in Middle East oil production and exports. While Saudi Arabia and the UAE have been able to divert some of their export volumes to ports outside of the Middle East Gulf, total crude oil exports from the region have fallen by approximately 10 million barrels per day (mb\/d) compared to pre-war levels.<\/p>\n
Ordinarily, an oil supply loss of this magnitude would likely be negative for tanker demand due to the steep drop in cargo supply. However, a series of trading inefficiencies have coincided to boost spot tanker rates in the weeks following the start of the conflict.<\/p>\n
Firstly, a number of vessels are trapped and unable to exit the Middle East Gulf via the Strait of Hormuz, which has reduced effective fleet supply, most notably in the VLCC sector where approximately 8% of the non-sanctioned fleet is currently idled.<\/p>\n
Secondly, the rush to find replacement barrels, particularly by Asian refiners which have been most impacted by the loss of Middle East oil, has led to a sharp upturn in Atlantic basin crude oil exports, with volumes increasing by almost 4 mb\/d between January 2026 and April 2026. This has been most evident in the U.S. Gulf, where crude oil exports reached a record high of 5.5 mb\/d in April 2026, boosted by the release of oil from the U.S. Strategic Petroleum Reserve.<\/p>\n
Finally, average voyage distances have increased substantially due to an increase in vessels ballasting long-haul from the Pacific to Atlantic basin, with a large proportion of these vessels sailing back to Asia once loaded in order to meet Asian refinery demand.<\/p>\n
As of the date of this release, the two sides in the conflict continue to be in a stand-off and the Strait of Hormuz remains effectively closed. Until this is resolved, the Company anticipates that oil and tanker markets will exhibit high levels of volatility and unpredictability. The ultimate impact on the global economy, oil supply \/ demand, and spot tanker rates, will depend on the duration of the conflict and the manner in which it is resolved.<\/p>\n
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