Hello, and welcome to the Scorpio Tankers, Inc. Q4 2023 conference call. I would now like to turn the call 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 Q4 2023 earnings conference call. On the call with me today are Emanuele Lauro, Chief Executive Officer, Robert Bugbee, President, Cameron Mackey, Chief Operating Officer, Chris Avella, Chief Financial Officer. Earlier today, we issued our Q4 earnings press release, which is available on our website, scorpiotankers.com. The information discussed on this call is based on information as of today, February 14, 2024, and may contain forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in the earnings press release, as well as Scorpio Tankers' SEC filings, which are available at scorpiotankers.com and sec.gov. Call participants are advised that the audio of this conference call is being broadcasted live on the internet and is also being recorded for playback purposes. An archive of the webcast will be made available on the investor relations page of our website for approximately 14 days. We will be giving a short presentation today. The presentation is available at scorpiotankers.com on the investor relations page under Reports and Presentations. The slides will also be available on the webcast. After the presentation, we will go to Q&A. For those asking questions, please limit the number of questions to 2. If you have an additional question, please rejoin the queue. Now, I'd like to introduce our Chief Executive Officer, Emanuele Lauro. Thank you, James, and thank you, everybody, for joining us today. We appreciate your time. We're pleased to report another quarter and another year of strong financial results. In the Q4 of 2023, the company generated $237 million in Adjusted EBITDA and more than $142 million in Adjusted Net Income. For the full year 2023, the company generated $959 million in Adjusted EBITDA and more than $570 million in Adjusted Net Income. The fundamentals, which have created a strong rate environment over the last 2 years, remain intact. Those still are an increasing global demand for refined products, a dislocated refining capacity, and a constrained maritime supply curve. In addition to this, we've seen low water levels in the Panama Canal, attacks in the Red Sea, and sanctions on Russia, which have led to the rerouting of vessels. This has made the fleet more inefficient and further tightened supply against a strong demand curve. The cash flow from the elevated rate environments are significant. They have also been transformative for our company. The balance sheets and the quality of Scorpio Tankers as an investment has become stronger and continues to improve. Deleveraging has been and remains our primary focus. Over the last 2 years, the company has reduced lease financing by almost $2 billion and our total debt by $1.6 billion. In the Q1 of 2024, we will repay $316 million in debt, and today our net debt stands at just a shade below $1.1 billion, and we feel very well positioned at these levels. Over the last 2 years, we have returned $732 million to shareholders, and this has been returned through share repurchases and through dividends, which includes $548 million, or roughly $10 per share, in 2023 alone. Today, we have announced another increase in our quarterly dividend, which is now $0.40 per share. This is our 4th increase since 2022. Looking forward, we expect low global inventories, robust demand, and limited fleet growth to support the strong product tanker fundamentals, which we've experienced in the last 2 years. I'd just like to thank you for your continued support, and I would like to now turn the call to James for a brief presentation. Thank you. James, please. Thank you, Emanuele. Slide 7, please. For the last 2 years, increasing demand, low inventories, refining capacity changes, and limited fleet growth has led to a robust rate environment. In the Q4, this continued. LR2 rates improved through the end of December as Middle East refining runs increased after an early maintenance season, moving from $36,000 up to $50,000 per day before any disruptions in the Red Sea. MR rates were lifted by the strength in the U.S. Gulf market, which offset slightly lower rates in Europe and Asia. Today, Asia and Europe are lifting rates for MRs as peak refinery maintenance in the U.S. starts to wind down this month. With low global inventories, Middle East maintenance behind us, and the U.S. working through peak maintenance now, the outlook for product tankers remains very constructive. As Emanuele mentioned, disruptions have led to new trade flows and rerouting of vessels, which has further tightened supply. However, this would not be possible without strong headline demand for refined products. Slide 8, please. Global demand for refined products has been extremely strong, and we expect this to continue. 2024 refined product demand, on average, is expected to surpass 2023 by 1.4 million barrels per day and will be driven by increases in jet fuel, naphtha, diesel and gasoline. As global demand has increased, so have seaborne exports. January refined product exports averaged 20.6 million barrels per day, which is 1.3 million barrels per day higher than January 2019 levels. Given low global inventories, increased consumption will continue to be met through higher imports. And not only have imports increased, but barrels are traveling longer distances. Slide 9, please. While demand is above pre-COVID levels, refining capacity is more dislocated. One of the biggest challenges has been diesel. Europe, Latin America, and Africa all have a diesel deficit of 1 million barrels per day. Capacity closures in Europe, North America, and certain parts of Asia have been offset by increases in export-oriented capacity in the Middle East and India. Opening of new export-oriented refineries and closing of older, less efficient refineries has led to an increase in seaborne exports, ton- miles, and ton- miles. We've seen this in Australia, where imports have increased already above the lost production after closing 2 large refineries in 2020. Last week, it was announced that a 150,000 barrel per day refinery in Scotland is expected to close and will be converted into a fuel oil terminal. Excluding the impact of Russian exports and ton-miles, ton-mile demand has increased over 7% compared to 2019 levels. In other words, the structural changes in refining capacity have and continue to reshape flows and increase ton-mile. As ton-mile demand increases, vessel capacity is reduced and supply tightens. Slide 10, please. Disruptions have exacerbated the strong supply and demand fundamentals in our market. First, 485 product tankers have carried Russian refined product, many of which are older vessels that will have a difficult time returning to the premium trades, given their age and trading history. This has and will continue to benefit the supply of vessels servicing non-sanctioned trades. Second, lower water levels in the Gatun Lake, which feeds the Panama Canal, has led to a reduction in the number of ships allowed to transit the canal from 36 to 24 per day. In the Q4, this resulted in a reduction of 200,000 barrels a day of refined product moving through the Panama Canal and needing to travel a longer distance. Third, the attacks in the Red Sea have reduced volumes going through the Suez Canal. Slide 11, please. Before the attacks on commercial vessels in the Red Sea, 2-3 million barrels of refined product were transiting the Suez Canal each day, roughly 10%-15% of the global seaborne product tanker trade. This was about 1 million barrels a day higher than prior years because of the increase in distillate coming from the Middle East to supply Europe, given sanctions on Russia. Many vessels are going around the Cape of Good Hope today, with the canal volume dropping to around 200,000 barrels per day for the first week of February. Depending on the route, this can increase the voyage length by 30%-70%. The rerouting of vessels has made the fleet more inefficient, tightening supply and leading to higher rates. Slide 12, please. The order book is 12% of the current fleet. New orders have started to slow, given expensive new building prices, long lead times for delivery, and uncertainty about propulsion systems to satisfy future environmental regulation. In addition, the majority of the order book is LR2 vessels, and with 52% of the LR2 fleet trading in clean products today, the effective order book for vessels trading in clean is going to be less than the current 12%. Also, the fleet is aging. The average age of the product tanker fleet today is 13 years, with 9% of the fleet 20 years and older. Starting this year, 8 million deadweight tons of product tankers will turn 20 years old each year, the equivalent of 160 MRs per year. By 2026, 21% of the fleet will be 20 years and older. Slide 13, please. This year's fleet growth is expected to be the lowest fleet growth since 2000, at less than 1%. Seaborne exports and ton-mile demand are expected to increase 2.8% and 7.3%, respectively, vastly outpacing supply. Using minimal scrapping assumptions relative to the age of the fleet, on average, the fleet will grow around 3% in 2025 and 2026, and close to 0 in 2027. In addition, 1-3 -year time charter rates remain at high levels, evidence that our customers' outlook is one of increasing export and ton-miles against a constrained supply curve. The confluence of factors in today's market are constructive individually. Low inventories, increasing demand, exports and ton-miles, structural dislocations in the refinery system, rerouting of global product flows, limited fleet growth, upcoming environmental regulations. Collectively, they are unprecedented. With that, I would like to turn it over to Chris to go through the financial slides. Thank you, James, and good morning. Good afternoon, everyone. Slide 15, please. As we have highlighted, cash flows from a strong rate environment have been significant and transformative for the company. Over the last 2 years, product tanker rates have been resilient. 2023 was a reflection of a strong market that found equilibrium after the events of 2022.... As the chart in the upper left illustrates, the Q4 of 2023 was marked by a normalized seasonal uptick in demand heading into the winter months. The impact of the recent events in the Red Sea will largely be seen in our Q1 results. Over the last 2 years, we have generated over $2 billion in EBITDA and reduced our gross outstanding debt by $1.6 billion. In addition to that, since the Q4 of 2022, we have increased our quarterly dividend by 300%, and during 2023 alone, we have returned $548 million, or approximately $10 per share, to shareholders in the form of dividends and share repurchases. Slide 16, please. As we have stated in the past, deleveraging remains our primary focus, and we have made meaningful progress in this respect. As the chart on the left illustrates, our gross outstanding debt at December 31, 2021, stood at $3.2 billion. As of today, this balance is $1.5 billion. The chart on the right shows this same progression, but more importantly, highlights the shift in the mix and composition of our debt, transitioning away from expensive lease financing into more traditional bank financing with lower costs and greater flexibility. Looking back, $1.7 billion of our outstanding debt at December 31, 2022, consisted of lease financing obligations bearing margins of over 350 basis points on average. Today, our lease financing obligations stand at just $294 million, and we have committed to repurchasing 12 more leased vessels between now and the end of the Q2. Once complete, these repurchases will bring our obligations under lease financing arrangements down to approximately $80 million. We have refinanced a considerable portion of our lease obligations into more traditional and lower-cost secured bank debt, which carries margins of less than 200 basis points on average. We also want to highlight that the terms and conditions of this newer debt provide the company with greater flexibility, including the ability to repay these loans at any time, and $500 million of revolving credit, of which $288 million is available today. In sum, we have not only reduced our leverage, but we've also simplified our balance sheet through more traditional forms of financing at lower costs and more flexible terms. Slide 17, please. Looking ahead, we still have more work to do, as we have committed to repurchasing $209 million of lease obligations between now and the end of the Q2. This comes on the heels of $497.1 million in unscheduled debt and lease repayments in the Q4 of 2023, and $171.1 million of unscheduled debt and lease repayments thus far in the Q1 of 2024. Over the same period, we drew $423.6 million from our $1 billion credit facility and $50.2 million from our $94 million credit facility, each carrying margins below 200 basis points. On a pro forma basis, after considering our committed lease repurchases, our gross and net debt stand at $1.3 billion and $1.1 billion, respectively. Moreover, with no new buildings on order and the expiration of options to purchase and install scrubbers on 11 of our vessels, we have manageable CapEx requirements. Slide 18, please. The company has significant operating leverage. Our Q1 of 2024 coverage across the fleet, including time charters, is averaging close to $39,000 per day. At $30,000 per day, the company can generate over $750 million in free cash flow per year, and at $40,000 per day, almost $1.2 billion. Additionally, our cash break-even rate has declined, and we continue to seek ways to reduce it in a balanced and prudent manner. And with that, I'd like to call, turn the call over to Q&A. Thank you. We will now begin the question-and-answer session. To ask a question, you may press *1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To remove your question, please press *2. Our first question comes from John Chappell with Evercore. Please proceed. Thank you. Good morning. I don't know who wants to take this one, kind of open it to the group, but, you know, clearly, as Chris just laid out, the targets on net debt are going to be achieved at some point in the early part of this year, if not the end of the Q1. There's a lot more uncertainty in the world right now, obviously. So, you know, there's been some turbocharge in rates that's helped you kind of accelerate the debt repayment, but I think a lot of uncertainty on how the world plays out from here. So, you know, versus where we were 3, 6 months ago, and you talked about target net debt levels and maybe shift in capital allocation, how do you see attaining those targets earlier versus maybe, continuing to deleverage further, just given a lot of the volatility in the markets today? John, Robert, I think that's a great question, and it's a, you know, it's a question that we're obviously asking ourselves. I think that we're all in a fortunate position as management, as shareholders, in that right now, you know, this market is providing, you know, extraordinary returns. And so the one thing we know is, as cash is coming in, our balance sheet is improving... We have really no idea at all as to whether or not, you know, this will continue, whether the Red Sea will continue to be effectively, you know, closed and helping extraordinary earnings. And so I think that we haven't even, we haven't reached our target yet. We don't intend to comment on what we would do in returns with regard to, you know, capital return. When reaching the target, we're happy to say that we, you know, we're not looking to do new building. And I think that it is a difficult situation to make a lot of decisions in the market environment that you have right now. So but at the same time, we're confident, as James has pointed out, in the long-term fundamentals. So the way I'd answer it at the moment is, the, the basic operation, the basic operational position of the company at the moment is that however unrealistic that might be, we are running the company as if the Red Sea were to open tomorrow. And, on that basis, we still think that the market will be very strong. It'll take a time to wind down from where we are to, let's say, you know, put the shipping routes together. You know, we're happy to share with everybody what we would call our base case of what we would think open days would be for the rest of the quarter. So we would, we were internally, on our base case, under that assumption, working assumption I've given you, is we would expect product MRs to be, you know, around $35,000 a day for the unfixed days, and LR2 is around $60,000 for the unfixed days. That's healthy. I think the best thing to say is, yes, we are moving very fast towards a deleveraged state, where the company can then have a lot of choices. But we're certainly not distracting ourselves right now on thinking what those, you know, what the best choices would be at that time, whether you... You know, whatever you do, and we just wanna keep our eye on the goal right now and the mission of taking the debt down. Okay, that makes sense. For my follow-up, this may seem like pretty small, but maybe it helps us shape your thoughts on strategy going forward as well. Letting those scrubber options expire, you know, you guys were one of the first to implement scrubbers. You're very much behind that technology, implemented on 86 of your vessels. By letting those options expire, do we read that to believe that you have enough exposure to the scrubbers and maybe the returns start to diminish going forward? Do we read that to believe that you'd just rather have those 355 days in this type of spot market environment and think the returns from operating those ships are, you know, much better than any scrubber premium? Or maybe are those just older ships that you may look to monetize in the secondhand market as they don't fit the core fleet going forward? That's a good question. Cameron, would you like to start? Sure. Thanks, John. It's yes to all. So it's obviously a number of considerations that go into us not declaring those options, and they had an expiration date, so it's not like we could further extend that optionality. But it's yes to all. The opportunity cost of installing scrubbers here is extremely high. The spreads have come down and are rather muted and are expected to stay that way. And obviously, we have a keen eye to the age of the fleet and the potential asset values here and potentially monetizing some more vessels through sale. So it really is yes to all your points. Okay, great. Thanks, Cam. Thanks, Robert. Thank you. Our next question comes from Omar Nokta with Jefferies. Please proceed. Thank you. Hey, guys. Good morning and good afternoon. Robert, just maybe, just real quick, wanted to ask if you wouldn't mind just clarifying what you were just saying, I think, to John, about how your operating assumption is for the rest of the perhaps quarter or for the rest of the year. You're assuming basically in your day-to-day that the Suez Canal or the Red Sea situation resolves itself tomorrow. And in that assumption, you believe that for the rest of the quarter, beyond what you've guided, but for the rest of the quarter, you think LR2s could earn $60,000, and the MRs could earn $35,000. Is that right? And- Yes. That's above what you've earned thus far. Correct. Okay. We only have, you know, a third of the quarter left. Just over- Yeah. Thirty to 40%. So, you know, that's why you weighted it that way, and we know where the rates are right now, and the rates right now are considerably above those, significantly above those numbers for LR2. So if that, that's how we... You know, it's not a perfect science, but that's where we would come through, come out. Yeah. I guess I'm just looking at it from the perspective that those are above what you've guided thus far, which I guess the implication is that the, what you have booked thus far- Yes ... has seen a limited impact from the Red Sea. Well, yes, the first 3-4 weeks, there was no impact at all. You know, every day we would answer questions to either analysts or shareholders... which would say, oh, well, we're reading that the, that the closure of the Red Sea and Suez Canal would affect the product market by X. Why isn't that happening? We would answer, because it takes a little time. You know, just because you, you know, put an obstacle in the way of some of a group going to a bar, and they have to take a longer route, it doesn't mean it changes the number of people standing at the bar waiting for drinks to begin with. So it took a little time. So in the same sense, we're saying that if the Red Sea was open tomorrow, again, it would take a little time. So all we're doing is saying, what did we earn in the, let's say, the trailing 4 weeks? So what do we think we could earn at a minimum for the next 4 weeks if you open the Red Sea tomorrow? That's more or less how that's calculated. Okay, thanks, Robert. That makes sense. And I guess then just a follow-up just off of that, you know, sticking with the Red Sea, you know, we've been seeing the diversions accelerate here in recent weeks after a bit of a slower start. You know, in terms of, say, Scorpio's fleet deployment, I know, James, you highlighted for the broader market, how impactful the Red Sea is. But just in terms of, say, Scorpio, how active is that region for you for Scorpio itself? And then, is that an area, I guess, currently that you're avoiding given all the risks? Thank you. Maybe we do that back to front. So maybe the last question was more operational, so maybe, Cam, if you'd like to take that one. Sure, happy to. So we avoid having a rigid policy with regards to the Red Sea, but it goes without saying that the risks there today are unacceptable for our vessels, cargo, and, particularly, our personnel. So we are not fixing any vessels, nor are we transiting the Southern Red Sea or the Western Gulf of Aden today, and that's been true for about a month now. That being said, two observations. We don't avoid the northern or middle Red Sea because it's obviously a very active area for our vessels to trade with Saudi Arabia. And in addition, we cannot predict what conditions would change our posture or those of the market with regards to resuming transits of the Southern Red Sea. We just don't know. I don't think anybody knows. So every day we wake up, we look at the best and latest information we have, and, you know, we expect that to continue for the foreseeable future. But there is no policy per se. It's just assessing risk as we go, and as of today, the answer is no, we're, we're not transiting Southern Red Sea. So, Omar, then I go back to the first part of your question. I don't want people to get it wrong. Look, we're very bullish. It's, you know, these markets are super strong. The cash flow is enormous. And the other thing that you have to put in context here is that, you know, the last couple of weeks, the markets have had a negative overhang on them with regard to U.S. Gulf with refinery turnaround and Chinese New Year. So if you were to talk to our trading desk, if the conditions remain, they would expect that rates would start to firm up, you know, start firming next week. You know, we have some very unusual situations going on. This isn't. This is not like a light switch. The other day when there was some tweet saying that, you know, there could be peace in, in between Palestine and, you know, Hamas and Israel, and we saw the stocks sort of trend down to 10% down, it was like, what on earth are they doing? What on earth are these, these people doing out there? Because it, the market will not react like a light switch. It will take time. The, the fleet itself is all over the place. You have really big changes. We're even booking some Q2 revenue right now. We've had two MRs that we fixed for... And we're not going to be any different. This is not special to Scorpio Tankers. I'm very sure that all of the, the leading product tanker companies will have the same type of profile in their fixing. And that is, we fixed two product tankers from the U.S. Gulf all the way to Japan. That is an awful long voyage. We have fixed product tankers from Singapore to Argentina, from China to Anchorage. We have fixed product tankers just, you know, earlier this week, and this is mind-blowing, from Singapore to New York. Those vessels are buried for a long time. For all intents and purposes, for the balance of this quarter, those vessels may as well be scrapped. They're not going to be on any position list for the rest of this quarter. So that it-- you know, so the position I'm taking, the assumption I'm taking is, it's going to be closed tomorrow, but if it's not closed tomorrow and next week, it's... I mean, open tomorrow. If the Suez and Red Sea is still, you know, shut for transiting to the product market next week, and the U.S. and refinery turnarounds go away, and Chinese New Year is finished, you should expect, on balance, that the markets trade up even from where they are now. So this is certainly not. We're not trying to be negative here. We're trying to show how strong this market is under almost any of the circumstances because of the fundamentals underneath, and we're trying to show that we will finish our mission to deleverage the balance sheet and play from enormous strength from that point. Thanks, Robert. That's a great place to be. That's it for me. Thanks, Robert. I'll turn it over. Thanks, Cam. Next question comes from Greg Lewis with BTIG. Please proceed. Yeah. Hey, thank you, and good morning, and afternoon, everybody. Thanks for taking my questions. You know, I guess you kind of started alluding to it, Robert, in terms of, you know, some of the longer voyages. You know, obviously, this is an exciting, interesting, disruptive time for rates where they are. What has kind of been the appetite, or is there any appetite from some customers looking to maybe go longer? I.e., what's kind of the opportunities and maybe the time charter market? And, you know, maybe not 6 months, but, like, maybe longer term, or is... But what- Yeah. Any kind of depth in the 2+ year charter market or anything like that? I think that there's depth in the market. There are charters out there wanting to do things, it's that they're there for yesterday's rates, of course. And, you know, even at 2 years, the present front end, you would have to discount your rate so much, and that's simply because we haven't had this position for very long. And, you know, they themselves don't know what's going to happen out there. So you have a situation where, you know, the charter wants to get on yesterday's market, and the owner says, "Well, I need some recognition for where the market is right now, because, you know, there's no point in me fixing a spot ship." That for, you know, if you could, if you could fix it $70,000-$80,000 a day for an LR2 for, you know, 2 and 1/2 months, it's gonna be a little bit tough to fix away at a, you know, $30,000-$40,000 discount straight out of the gun for a 2-year charter. Unless that's reflected properly in a, in a raised charter rate from where it was before. Okay. I think, though, you know, there's liquidity is ironically a lot... Ironically, the S&P market is different. The S&P market is, you know, prices have gone up, prices are reflecting that, and the S&P market itself is reasonably liquid. Okay, super helpful. And I know we've been talking a lot about the Suez Canal here. You know, could you talk a little bit, you know, maybe Cam or James, or what you guys are seeing kind of in, on the Panama Canal? I mean, it seems like water's still low there, and it seems like that could be more of maybe a longer-term issue that could be impacting rates in the Atlantic. Cam, would you like to take this? Sure. Thanks, Greg. It absolutely is affecting rate structures in the Atlantic. You know, our analysis of the situation is it's exacerbated by El Niño. The Panamanians are trying to redirect water into the lake. The earliest we can see any improvement is later in the Q2, but that is an educated guess and not something that we can plan on or forecast with any certainty. So, we just don't know what it would take between the rainfall and the redirection of other water into the lake to allow the Panamanians to increase transits. But that's our best guess. Okay, great. Thank you for the time. We proceed with Sam Bland with JP Morgan. Oh, yeah, thanks for the question. It's Sam Bland. The first question is, I guess, on this, on the Red Sea disruption, we've seen a very big reaction in LR2 rates, but less of one in MRs. Is that, is that what you'd expect to see, given the sort of trading patterns of each, or I don't know, could the MRs go up in the coming weeks? Let's maybe take that one, and then I'll ask a second one after that. Thank you. Yeah, I think it's happened exactly as we would expect. You know, first of all, there are less LR2s than when it first strikes, everybody wants to go to that vessel that carries the maximum cargo. And then what happens after that, it starts getting absorbed around, and we've seen the MR market actually move up now in the last couple of weeks. And that's moved up against the U.S. Gulf refinery situation, plus the preparation for Chinese New Year. So that's like a very bullish sign. And you're starting to see cargoes getting split. So in the same way as it took a little time for the LR2s to actually move, it takes a little time for the space to be filled for one to another way between the MRs and the LR2s. Okay, understood. And the second question is on, on the net fleet growth graph on slide 13. I just saw in the footnote, there's this, assumption of 30% slippage across 2024-2027, which I guess we're expecting those years to be good years. I can sort of see why you might get slippage in a bad period, but why would we expect 30% slippage in what hopefully is going to be a strong market? Thank you. Sam, well, you always get slippage at the end of the year on certain vessels, but there's a lot of vessels in the order book that don't have firm delivery dates. So there were a lot of vessels ordered, you know, maybe promising a Q4 delivery date in 2025 or, you know, a Q2 or something like that in the later years, and we just don't have the specifics on it. So it's our best estimate of when these vessels will deliver. Okay, understood. Thank you. Our next question comes from Ken Hexter with Bank of America. Hey, great. Good morning. Robert or team, can you talk about kind of break-even levels now, right? So you've gone down to $16,000 a day from $17,000 last quarter. I guess, where do you see that trending? You've talked before about kind of getting that a little bit lower. Maybe just talk about where you think it is now. I think we're happy to give the 16 and, you know, we'll not talk about where we want to go. I think we'll just say that we're focused on, you know, reducing our break-even levels. And to the extent that you are paying down debt and reducing your amortization, debt amortization and interest costs, then, you know, that should happen. The exact, I think it's better that we just say where they are rather than say where they're going to. Okay. And, and just a lot on this Red Sea discussion, maybe talk a bit about, I, I guess is, is the impact to rates now, is it, is it still somewhat isolated in on certain lanes? Is it, is it just rates globally have, you know, have, have adjusted? I just want to understand the process on, on kind of timing and, and how well spread out that the, the, the rate adjustment is now. All rates are up. It's a—that's what's so strong, the depth and breadth across the product space is very strong. Okay. And then, Robert- Many, many, many, many different routes. I mean, I've described some really crazy routes, the MRs. Yeah. But inside of that, obviously the Asia market has been stronger on the MRs, and the U.S. Gulf has, let's say, been the one that's not so strong, even though it's still very strong. But that's because of the, you know, refinery turnarounds. And Asia, even though it's going through Chinese New Year, is being assisted because talent is being drawn to Europe, you know, because of Europe's situation. And, you know, frankly, I think we're getting a little help from U.S. finally being tough on the sanctioned, you know, Russian oil and Russian trading ships. I think that's good, too. I guess, Robert, if we thought forward and you were talking about the Red Sea reopening kind of in your base model, right, in terms of assumption on pricing. What happens in terms of if Russia and Ukraine, at some point the war will end and you'll get... You know, what happens to those vessels? How quickly do they get reabsorbed into the market? I just want to understand timing, because obviously you stay hesitant. Yeah, of course. But, I mean, if you're looking for excuses to maintain your hold because you're now worried about Russia, I doubt whether Russia, Panama, and Middle East will all get solved together very shortly. And there is you know, Russia, we can be slightly more, you know, certain on because it's a phenomena that's sort of been embedded. That position just doesn't seem to be getting any easier, you know. As I said, the U.S. is getting, you know, tougher related to the sanctions. You know, Putin is showing no interest in slowing down, and Ukraine at the moment is showing no interest in, in giving up. So, you know, we also still have to accept that the longer we go through the curve and time here, the more that anyway, a Russian this going back—I don't see how you go back to how it was before anyway, and even if you go back a little bit, I don't think that it starts to affect things so much because you've got this aging of the fleet coming through, and then you've got, you know, the growth in in other trades in the product market that have taken over. And I just cannot imagine that you're going to go back to, "Oh, yeah, that's great. Thanks, Russia. We'll, Europe will just take everything again. Just help me understand the last part of your kind of argument, right? If you are assuming a base case or return in your rate assumption at elevated rates, tell me again why you would not want to start locking in any charter out contracts? ... Is it that they just don't adjust to where the market is in any relation? No, you're assuming an elevated—I've only talked about elevated rates related to the Middle East, right? I don't think that the market is that elevated any longer, and never was related to the Russian thing. I think that was sort of a little bit overextended. Yeah. And the reason is this, is because the rates are very, very high right now. The charter is sitting there saying... So these are not the rates, but let's say before all this happened, a ship would be $20,000 a day charter, for example. And right now, that vessel could earn, let's say, $30,000-$40,000 a day because of the elevated rates. The charterer hasn't really moved, so now the calculation would be for a 2-year charter. You know, the owner would wanna have more rather than give the ship away at the front at such a big discount. But the charterer isn't yet ready to pay that rate because the charterer does not have the certainty, with all the different changes in the news announcements every 10 minutes, of whether those very heightened rates will continue for a long time, the same as nobody does. So therefore, it's almost like no trade. The bid, let's say, in the stock market, like, the bid offer is just too wide right now. Yeah. That'll settle down at some point over the next, you know, 2 weeks, 3, 4 weeks, I would expect. Helpful. Thanks for your thoughts, Rob. Appreciate it. No problem. Our next question comes from Frode Mørkedal with Clarksons Securities. Thank you. Hi, guys. Congrats- Hi, Frode. -on a strong quarter, and, even better Q1. I guess coming back to the Red Sea, we talked a lot about it, but, and I appreciate the, the $60,000 figure if, if it opens up tomorrow. But, I, I'm curious to hear your upside case, should this continue, right? I guess, we haven't seen all ships divert. So do you have any idea what the potential impact could be, how high rates could go, should this last? Well, you know, I know this guy in Norway who's an analyst for this company called Clarkson. This Norwegian guy, his name's Frode, and, you know, he sort of said very early in the piece, at the end of last year, that, you know, we could see a lot of 2 rates at over $100,000 a day in certain fixtures. And, you know, that person has been right, Frode. So- Thank you. You know, I think we're you know, we've done quite well following your guidance, right? So I don't think we're gonna comment on any of the upside. Upside can take care of itself. Fair enough. Good. Good, good. I guess you mentioned, Congratulations on your call, Frode. Thanks. Thank you. My final question is just on the new trade lanes you mentioned. You know, we all observe the standard routes, so but curious to hear, and if you... What type of new routes do you see on the LR2s, for example, which are emerging? You've just seen some, you know, very... The LR2 is slightly more in order. But you've just seen some weird things that are very, very cool. You know, so you've seen, for example, vessels that are discharging in Europe from... So we have 1 ship, for example, that's gone from the AG, loaded in the AG, gone around the Cape, going to Europe, and it's about to, it's discharging Hamburg. It's gonna reload in Amsterdam, and then come all the way back around the Cape and discharge in East Africa, 6 days away from loading in the AG. That is really kind of wow! Okay. It... You know, and then you've seen, you know, routes that are related out in, you know, Asia too, where you're able to bring vessels back, towards the AG or voyages to Australia and things that are out of the indexes, that are very lucrative, voyages. Perfect. That's very interesting. Great. Thank you. Thank you, guys. Yep, thank you. Our next question comes from Liam Burke with B. Riley FBR. Yeah, thank you. Your dividend payout has been steadily increasing from quarter to quarter. How much of that is a part of your capital allocation strategy as your debt levels start coming down? How are you gonna balance that between your buybacks, where you have sort of a stated target as a% of NAV? ... We except, you know, we're simply not going to comment on capital allocation strategy until we've achieved our goal. And there are too many permutations of what you would do just between stock buybacks and dividends. So, you know, right now, you know, we've always believed in regular dividends. And I think that the dividend increase is like a nod to or a recognition of the really improved underlying strength of the company. And I wouldn't see it as, you know, anything other than that. You know, we've just been regularly increasing that dividend all through last year, and we're just adding it again to it now. Okay, thank you. There's obviously been a lot of talk about the Red Sea. How much has India, as it stepped up as both an importer of crude and an exporter of product tankers, been to your advantage, and how do you see that shaking out over time? Robert, you want me to take this? Yeah, of course. Liam, great question. I think the answer is, it's had a positive impact. We often focus just on the Middle East, and depending on the region, sometimes people will include India in that. But they have added very advanced refining capacity. Jamnagar is probably the most advanced refinery in the world, one of the most complex refineries in the world, and they export around 1 to 1.5 million barrels a day of product. And they're planning to add a fair bit of capacity. So similar to the impact of the Middle East, which has expanded ton- miles, we have seen a similar impact in India, and it's probably the next growth region. Great. Thank you, Robert. Thank you, James. Thanks, Sam. Our next question comes with Chris Robertson with Deutsche Bank. Hi, yes. Good morning. This is Ben Moore, calling in for Chris Robertson here at Deutsche Bank. Thanks for taking our questions. You've outlined very strong fundamentals in the market, and given the latest disruptions in the Red Sea, it's put upward pressure on tanker rates. We wanted to ask what are your thoughts, especially on prioritizing maybe a special dividend over share repurchases, CapEx, or debt paydown? I'm really sorry, Chris. I mean, I missed the question. I'm really sorry. Oh, I'm sorry. We wanted to ask, you've outlined very strong fundamentals in the market. Yes. Yes, given the latest disruptions in the Red Sea, that's put upward pressure on tanker rates. We wanted to ask, especially how you might be thinking about prioritizing a special dividend over other things like share repurchases, CapEx, and debt paydown? Yeah. I will sort of restate this until we get to, you know, until we get to where we want... You know, we finish the mission of paying down debt, then we're really not going to really think about it ourselves. You know, we have to see what the set of, you know, opportunities are. And secondly, we're never gonna telegraph it. There's no possible way. So I would say to everybody, there is no way that we're gonna come out and say, "Oh, we're gonna buy back this much stock," or, "We're going to pay out, you know, intend to pay out this much extraordinary dividend," or, "We intend to raise the regular dividend to X." We're just going to act on what we've done. You know, we've already got the stock buyback in place, so we're not going to, you know, we're not gonna wake up one day and say, "Hey, you know, guys, we're happy now. This is going to be, you know, this is what we're going to do. Thanks. And, maybe as a follow-up, can you please discuss just your thoughts looking forward, whether we've reached peak disruption in terms of product tankers and how it might play out throughout the year, just at least from what you're seeing and hearing? I think that's a wonderful, wonderful, wonderful question. You know, when we've been through 2 years ago, you know, we, you know, 2 years ago or 3 years ago, we wake up one morning in late February and see absolutely no cars on the road and no planes in the sky. And then we are sitting in a situation now where we've got, you know, a long-term war between, you know, Ukraine and Russia, the Panama Canal transit inhibited, Red Sea transit inhibited. And, you know, some argue that the the Palestine-Israel situation, that whole Middle East situation, is getting worse, not better. And, you know, no one talks about the risk of it spilling over into other areas. So I think it's impossible to say that we've reached the peak of the disruption because, you know, we're now way beyond 3 standard deviations of disruption anyway right now. So it's not, you know, Wall Street's been through when all these new things is. You know, there's a complacency in the whole oil space as we look at price. And it's like, you know, Wall Street is really, you know, wishing, hoping all the time on every announcement that's relatively, you know, dovish. But the facts are, if we go back since October the 7th, virtually on a biweekly basis, the situation has got worse, not better. It's hard for me to say, "Yeah, we've reached the peak of dislocation." We don't know. Wonderful. Thank you for your... Great, thanks for your insights. This concludes our question and answer session. I would now like to turn the conference back over to James Doyle for any closing remarks. Thank you all for listening. Hope you all have a great day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.