Hello, and welcome to the Scorpio Tankers Second Quarter 2025 Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. 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 Second Quarter 2025 Earnings Conference Call. On the call with me today are Emanuele Lauro, Chief Executive Officer, Robert Bugbee, President, Cameron Mackey, Chief Operating Officer, and Chris Avella, Chief Financial Officer. Earlier today, we issued our second quarter earnings press release, which is available on our website, scorpiotankers.com. The information discussed on this call is based on information as of today, July 30th, 2025, 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 broadcast 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 two. 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 good morning or good afternoon to everyone. Thank you for joining us. We are pleased to report another quarter of strong financial results. In the second quarter, the company generated $144.5 million in adjusted EBITDA and $67.8 million in adjusted net income. When we last spoke in May, markets were dealing with rising concerns over trade policy, tariffs, and geopolitical instability, factors that pointed to the potential for an economic slowdown. As few major issues have been resolved regarding trade, tariffs, and geopolitics, the likelihood of a recession seems lower today than it was last time we spoke. We see two narratives unfolding. The first is one of strength. The product tanker market continues to benefit from strong demand for refined products and long-term structural changes in global refining that are extending trade routes and increasing tonne miles. The second is one of caution. The policy landscape remains uncertain, and geopolitical risks continue to create noise, clouding visibility. Scorpio Tankers is stronger today financially, operationally, and commercially than it was just one quarter ago. We've continued to fortify our balance sheet, expanding revolving credit capacity, maintaining a cash breakeven of $12,500 per day, and giving notice to repurchase our final three vessels under sale leaseback financing. At the start of 2022, our lease obligations totaled $2.2 billion. Today, that figure is below $70 million, and in just a few months, it will be zero. Today, our liquidity is approximately $1.4 billion, including cash, underwritten revolving credits, and our investment in DHT. Operationally, we completed drydocks for eight vessels in the second quarter and 71 vessels over the last seven quarters, enhancing fleet efficiency and positioning us well for the quarters ahead. Commercially, we added one vessel on a 12-year bareboat charter with a time charter equivalent rate in excess of $21,000 per day. Our approach to capital allocation remains measured, not because of our view on the product tanker market, which remains constructive, but due to the broader global uncertainty that continues to persist. This quarter, we trimmed our investment in DHT, selling 2.7 million shares at over $12 per share, realizing a 16% return. Looking ahead, we remain optimistic. OPEC recent production increase should provide a tailwind to tanker demand. Our view on both crude and refined products remains positive. With a modern fleet, robust liquidity, and a strong balance sheet, Scorpio Tankers is well-positioned to navigate uncertainty and continues delivering long-term value to our shareholders. Thank you, and I will pass the call to James for a brief presentation. James. Thank you, Emanuele. Slide seven, please. In the second quarter, strong demand, low global inventories, and improving refining margins supported a steady rise in product tanker rates. That strength has carried into the start of the third quarter, with bookings to date averaging approximately $22,000 per day for MRs and $31,000 per day for LR2s, levels at which the company continues to generate significant free cash flow. While tensions between Israel and Iran did not disrupt flows through the Strait of Hormuz, the return of Houthi attacks in the Red Sea and the ongoing conflict in U.K.raine serve as reminders of how fragile the geopolitical backdrop remains. That said, several near-term catalysts, including the unwinding of OPEC+ production cuts and increasing sanctions, could further tighten supply-demand balance heading into year-end. Looking beyond the near term, the long-term story remains intact. Structural shifts in refining, longer trade routes, and an aging fleet all support a positive outlook. We view the setup, both near and long term, as increasingly constructive. Slide eight, please. Strong demand and low global inventories have led to higher exports, and we expect this to continue. Excluding fuel oil, refined product demand will grow 900,000 barrels per day higher in the second half of this year compared to last. In July, seaborne product exports averaged 21.1 million barrels per day, about 400,000 barrels per day higher than the same month last year. Slide nine, please. Since April, OPEC+ has committed to restore 1.9 million barrels per day of production. While these barrels have been slow to appear, partly due to seasonal power demand in the Middle East, we expect them to come, supporting crude tanker demand with some spillover to products. Last year, in a weaker crude market, some crude tankers shifted into clean trades, moving 50 million barrels of refined products between May and July. This year, that figure is just 20 million barrels in the same period. With current earnings spreads offering little incentive for crossover, we see limited crude cannibalization on products, further tightening the product tanker balance. Slide 10, please. Two weeks ago, the EU introduced its 18th sanctions package on Russia, lowering the crude price cap, banning imports of products from refined Russian oil, and sanctioning 101 additional tankers. While transition periods may delay immediate effects, the longer-term impact could be meaningful. Vessels operating under the price cap or swing capacity will be challenged by a lower price cap, likely pushing more ships into the shadow fleet to maintain Russian exports. Many of the vessels doing strictly Russian trades will struggle to re-enter Western markets because of their age, operating history, and insurance or maintenance shortcomings. For example, 89% of the MR vessels sanctioned by the EU and U.K. are older than 18 years. Additionally, banning imports of products refined from Russian crude could lengthen trade routes, as Europe would need to replace diesel from countries that are importing Russian crude. The result: increasing inefficiencies, tightening effective supply, and potentially longer tonne miles. Slide 11, please. Over the medium term, refinery rationalization is arguably one of the most important drivers of refined product trade flows. We continue to see closures in global refining capacity. Planned shutdowns, such as Valero's Benicia refinery in California, are unplanned, like the Lindsey refinery in the U.K. At the same time, the lack of new capacity is being developed in emerging markets. Over the last five years, global net refining capacity growth has only been 500,000 barrels. Refineries face steep capital outlays to stay compliant with tightening regulations, and for older refineries, the economics may no longer work. As we have seen, refinery closures don't eliminate demand; they simply reroute it, and often across oceans and longer distances. This has been a key driver in tonne mile demand, which has increased 20% since 2019. Slide 12, please. The product tanker order book currently stands at 20% of the existing fleet, a figure that may appear elevated at first glance, but as always, context matters. A wave of fleet renewal was inevitable. Between 2001 and 2008, nearly 1,500 product tankers were ordered. Many of those are now reaching 20 years of age, with a growing share approaching the end of their commercial lives. Meanwhile, new build activity has slowed considerably. Year- to- date, only 23 product tankers have been ordered. As we discussed on the last call, LR2s now make up half the current order book. However, it's important to note that 51% of LR2s on the water today are trading in crude oil, and we expect this to continue. In short, the effective growth in clean product capacity looks far more modest than it appears, especially when you consider utilization. Slide 13, please. One of the less visible, but no less important, contributors to market tightness is the lower utilization of older tonnage. We often speak about supply in binary terms: new build deliveries and vessel scrapping but t he reality is more nuanced. As ships age, their utilization gradually declines. As shown in the left-hand chart, the tonne mile demand of a 20-year-old vessel is 45% less than a modern vessel today, reflecting limitations in trading opportunities, efficiency, and regulatory access. That drop-off could be even steeper, closer to 70% without the Russian trade. This isn't a short-term story. Between 2003 and 2010, we saw significant growth in the product tanker fleet. The result: a large cohort of vessels now approaching or surpassing 20 years of age. The chart on the right makes this clear. Including the current order book, 17.5% of the fleet is older than 20 years today. By 2028, that figure climbs to 30%. The implications are structural. The fleet is aging, utilization is falling, and effective supply is tightening, even without a dramatic increase in scrapping. Slide 14, please. Given the lower utilization and the likelihood of LR2 vessels trading crude oil, fleet growth could be lower than expected. In scenario two, we assume 40% of LR new builds carry crude oil, and scrapping remains minimal. The product tanker fleet would increase by 2.8% per year over the next three years. In scenario three, using the same LR2 crossover and carrying capacity declines for vessels 21 to 27 years old, effective fleet growth drops to less than 1% per year. We think effective fleet growth is likely to be somewhere in the middle of that range. By contrast, tonne mile demand has compounded at 3.6% annually since 2000. Strong demand, modest supply growth, and structural shifts in refining capacity continue to add tonne miles to every barrel. In our view, the growing gap between demand and effective supply sets the stage for a sustained, favorable rate environment in both the near and long term. With that, I will turn it over to Chris. Thank you, James. Good morning. Good afternoon, everyone. Slide 16, please. This quarter, we generated $144.5 million in adjusted EBITDA and $67.8 million or $1.41 per diluted share in adjusted net income. Our operating cash flow, excluding changes in working capital, was over $130 million this quarter and approximately $240 million on a year-to-date basis. In April, we prepaid $50 million into our $225 million revolving credit facility, covering all remaining quarterly principal repayments through the maturity date of January of 2028, with the exception of the balloon payment. These amounts can be reborrowed in the future, subject to the facility's amortization profile. We were recently opportunistic with our investment in DHT, having sold 2.7 million shares at over $12 per share. This is an almost 16% return on investment in less than a year when factoring in dividends received. We still retain a 5.5% ownership interest in DHT and continue to highlight that this investment has the dual benefit of having meaningful exposure to the VLCC market while also having the liquidity to move in and out of the position as opportunities arise. The chart on the right shows our liquidity profile. As you can see, we have access to over $1.3 billion in liquidity as of today. This is $1.4 billion if our investment in DHT is included. Our liquidity consists of cash of $472 million, along with approximately $834 million of drawdown availability under three revolving credit facilities. Slide 17, please. The chart on the left shows the progression of our net debt since December 31st, 2021, which has declined $2.5 billion to a net debt balance of $438 million as of today. The chart on the right breaks down our outstanding debt by type. In uncertain times such as these, we believe that it is important to maintain a diverse capital structure with multiple sources of low-cost funding and maximum flexibility. Starting at the bottom is our $69 million of legacy lease financing obligations on three vessels. In June and July, we submitted notices to exercise purchase options on these vessels. These leases are the most expensive financing in our debt structure, with margins of over 400 basis points. Two of the purchases are scheduled for December for $23.4 million each, and one purchase is scheduled for February for $18.9 million. In the middle is our secured bank debt, with a lending group dominated by experienced European shipping lenders whom we have strong relationships with. All of this debt matures in 2028 and bears interest at margins below 200 basis points. These facilities are flexible and can be repaid at any time without penalty. Further to this, $290 million of our $642 million of secured borrowings is drawn revolving debt, an important tool that we can use if we want to repay the debt yet maintain access to the liquidity in the future. At the top is our recently issued $200 million five-year senior unsecured notes, which were issued in an oversubscribed offering in the Nordic bond market in January of this year at a 7.5% coupon rate. Slide 18, please. The chart on the left shows our debt repayment obligations through the end of 2026. Our scheduled quarterly obligations are modest, and we also have $78 million of voluntary unscheduled payments, which includes the early repurchase of three lease-financed vessels from Ocean Yield and a $12.7 million repayment for one vessel on our $1 billion credit facility, which was made earlier this month. This repayment was triggered by the entrance of this vessel into a long-term bareboat charter-out arrangement to the U.S. government's Tanker Security Program, which is expected to commence in August. Additionally, since the beginning of last year, the company has recently completed the periodic special surveys on 67% of the fleet. The work performed during these drydocks has enhanced the operating efficiency of each vessel, as can be seen by the continued quarter-over-quarter improvement in vessel operating costs. Our forward drydock schedule is light as we come to the end of the year, with far fewer off-hire days as compared to last year. Slide 19, please. The strength of our balance sheet positions us to continue to generate excess cash flow, even in challenging rate environments, given our low cash breakeven levels. Further to this, our operating leverage positions us to benefit from spikes in spot market rates that have become commonplace over the past three years. To illustrate our cash generation potential, at $20,000 per day, the company can generate up to $271 million in cash flow per year. At $30,000 per day, the company can generate up to $632 million in cash flow per year. At $40,000 per day, the company can generate up to $994 million in cash flow per year. This concludes our presentation for today. Now I'd like to turn the call over to Q&A. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. The first question comes from Jonathan Chappell from Evercore ISI. Please go ahead. Thank you. Good morning. James, great presentation on the market. I think there's been a lot of starts and stops to the product tanker market, and there's a lot of optimism now, whether it's between what you booked quarter- to- date or even the recent activity in the spot market. Between now and when we speak to you again in 90 days, what's going to happen that's going to make either your quarter-to-date number look higher or your quarter-to-date number look lower? We think about the risk-reward from here over the coming 45 to 60 days. It's a good question. I mean, look, I think the European next round of sanctions have a transition period, right? It's 90 days on the price cap. It's 180 days on the Russian refined crude product exports. I think that's a little bit later, but it does seem like OPEC barrels are going to be coming back in September. Last summer, we did obviously have some cannibalization, which is down over 50% of these crude vessels carrying product. That said, it's also a seasonally slower period as we get to the end of August and you go into the summer maintenance season. I think there's some catalysts there, kind of short-term, but it's always difficult to kind of make a call. We've basically seen a market that's been steady as she goes. You know, MR rates have been $20,000 to $25,000, and LR2 rates have been high $20,000s to low $30,000s. We think there's a good reason that that continues. Maybe you don't see an immediate uplift, but things remain positive. Yeah. John, I'd just like to add to that, just listening to what James has been saying, is that, you know, even the OPEC thing coming back in September is not really going to affect much of the third quarter because, you know, even if you have two, three more fixings now, weeks of fixing now, the majority of the third quarter is done with. We agree with James, there is, you know, things to do with Russia, other structural things that can lead to, as usual, a seasonally stronger fourth quarter, as well as OPEC too. Got it. Chris, for you, you've de-risked this corporate capital structure significantly over the last three years. All these slides that you've just laid out showing tremendous liquidity, very little repayments, very little capital commitments, and then all the cash flow potential that you can generate. James just laid out, I think, a more favorable outlook than maybe three months ago. As Emanuele said, maybe less recession risk. I know that you never want to pin yourself to a priority use of capital, but we've gotten to the point now where there's a lot of cash flow. It continues to accelerate, and there's really nothing identifiable to spend it on. Prepare for black swans, I get it. If this market plays out the way that James has just laid out, how do we think about capital allocation shifting in 2026 versus, call it, the last three years? Hi, John. Thanks for the question. I guess the first thing I just want to point out is, you know, while things look better today, the issues we were highlighting in May are still unresolved. There's still a lot of uncertainty. That's how we look at it on a point-in-time basis. We don't have, we're not going to set out a long-term capital allocation strategy in the midst of this uncertainty. For now, I think conservative is our approach. I don't know, Robert, if you have anything to add to that, but that's my view on that. Yeah, I would totally agree with Chris. We've lost, you know, we're literally just trying to, nothing has changed as far as we're concerned, fundamentally. I mean, you know, the tariff is still there, very much there. The two big economic blocs, Europe and China, nothing's been resolved yet. I mean, there's an agreement that was just made in Europe to be ratified. There's no absolute certainty over the next 30, 40 days that that's going to happen. Still dealing with China, which just seems to be postponed out. The actual geopolitical things of Russia, U.K.raine, Gaza, Israel, nothing is actually being resolved either way. We will certainly spend the next part of the summer just doing what we've done before, which is just, you know, adding to cash and adding to liquidity. Okay. Thanks, Chris, James, and Robert. The next question comes from Omar Nokta from Clarkson Platou Securities. Please go ahead. Hi. Hey, guys. Thank you. Good morning. Good afternoon. Maybe just wanted to follow up, obviously, on this topic that you're just discussing in terms of, you know, capital allocation in this market backdrop. Obviously, it sounds like the fundamental outlook on product tankers remains fairly solid. It's really just the geo macro, as Robert, you were just outlining. I guess maybe just in terms of the buyback itself, is there anything that's changed in your view on that as a tool, or is it just really, it's simply about the uncertainty and all of the just angst that's going on in the geo macro? Yeah. We're maintaining that position that we're having. Otherwise, nothing else has changed. The stock itself has performed better in the last month or two. We're hoping that some of the signs could happen that we have a more benign risk environment. You know, then we can see where we are. We're unlikely to, I can't imagine that we're going to sort of make some announcement and say, Okay, this is now our capital strategy. I cannot imagine that that will happen. We're much more likely to act rather than say what we are now going to do. Okay. I guess maybe just in terms of thinking about the fleet from here, obviously, you still have a very young fleet under 10 years of age. You've been a bit on, say, cruise control, harvesting the cash, paying down the debt, building up the balance sheet strength. When does it make sense to start thinking about buying ships again, you know, modern ships to replace some of your older ones? Not talking perhaps about, say, expansion, but maybe just rejuvenation. Is that in the cards here near term? Nothing right now is on the cards other than, you know, we're operating the company and we're continuing what we're doing. The company is monitoring the S&P activity, monitoring the newbuilding market, you know, whether it's for sales or for purchases, and that's what we're doing. Okay. All right. Got it. Thank you. I'll pass it back. The next question comes from Greg Lewis from BTIG. Please go ahead. Hey, thank you. Good morning and good afternoon, and thanks for taking my questions. I wanted to touch on real quick the TSP program. It looks like a great contract. Kind of curious if you could talk a little bit more about that program. The comments around the subject annual renewal, is that ongoing where the TSP renews that annually, or is that at a later date? Greg, it's Cam. Thanks. We're not at liberty to discuss our transaction or our contract to put a ship as a substitute vessel into the TSP, but on a general basis, I'll make a few observations. The annual renewal is subject to funding by the federal government, which there has never been a case of this funding not being renewed. I would say the renewal risk is quite low, but in today's day and age, who knows? Our expectation is that the bareboat runs for the full 12 years. Obviously, what it does is the government has an interest in having a strong U.S. flag fleet that resonates, I think, with other initiatives the current administration is taking by way of shipbuilding and preference for U.S. operators. This deal came to us at the right time, of course, but I think it's an indicator that we'll look to do further transactions like this to the extent that they're available and offer really good returns. Okay, great. Super helpful. James, in the presentation, you kind of walked through maybe some crude vessels cannibalizing some product volumes. You laid out the OPEC ramp and any kind of, realizing that it's hard to pinpoint numbers, but any kind of view on how many vessels we could see shift back to trading crude from product, as OPEC spare capacity finishes that initial unwind that is expected to happen, I guess, pretty much in the next month or two? On the crude vessels carrying product, it's really the Suezmax and VLCCs that we were compared to last summer. There's been switching on the smaller segments, but when we talk about the cannibalization, it's really those vessels. Of the 17 crude vessels that have been delivered this year, 11 of them loaded clean product on their first voyage. On the next voyage, eight of them have already loaded crude oil. Speaking to the larger segments, that looks constructive. On the Aframax LR2 side, what we've seen is 34 LR2s dirty up this year. I think this goes back to the kind of the order book being LR2s and people building LR2s more than building Aframaxs because the Aframax volumes are 4x as large as clean products. We keep building LR2s. For example, by the time all these LR2s deliver, 46% of the Aframax LR2 fleet will be LR2s, but the crude market's 4x as large. This is actually a trend we think that's going to continue for the foreseeable future because also on the Aframax side, the vessels are quite old, and a lot of them are also tied up in Russian trade. Okay. Super Super helpful. Thank you, everybody. I think just a mention on that, you know, the crude market. I think the crude oil market continues to disappoint everybody. It's been the same story for three years at the moment, yes, everything's going to be great. Next quarter, things are going to be stronger. It hasn't happened so far. I think that the product market itself is acting extremely well in the light of that disappointment, that uncertainty. We do see very strong reasons why that crude market coming into September with the OPEC increases and the continued low inventories and people having to move. We see very strong signs that that market could get significantly stronger coming into the back end of the year, which, just like the product market, we think the same, and that would be beneficial to the product market. The next question comes from Tim Chang from Bank of America. Please go ahead. Hi, this is Tim Chang on for Ken Hoexter. Thanks for taking my question. Saw that vessel OpEx step down sequentially and year over year, somewhat materially normalizing to 2023 levels. Do you see the run rate OpEx going forward stepping down a bit, particularly for LR2s, or would you still advise us to look at kind of a last four-quarter running average? Thanks. Tim, this is Chris. Thanks for the question. Yes, I would step it down a little bit, but also, yes, use the trailing four-quarter average. If you do that, it does step down about $200 a day from what we guided last quarter. Just to be specific, that would bring the LR2s down to about $8,800 per day on a run rate basis, the MRs at about $7,800 on a run rate basis, and the Handys at about $7,600 on a run rate basis. The next question comes from Chris Robertson from Deutsche Bank. Please go ahead. Hey, good morning. Thank you for taking my questions. Just to follow up on Tim's question on OPEX, Chris, you know, you mentioned that vessel OPEX benefits here from ships that have been in for special survey. I was wondering if you could talk about how long do those efficiencies last, you know, post those surveys? Do they step down over time, or does that create kind of a permanent structure there? Thanks, Chris. I would say as you get closer to dry dock, vessel OpEx tends to tick up. That's natural. These are depreciating assets that require more work as they age. We're reaping the benefits of the recent dry dock, but I would caution to use a low run rate through the rest of the useful life of the vessel just because of natural sort of wear and tear. Cam, do you have anything to add to that? No, I think that's right, Chris. I'd say it's a combination of things. It's a special survey, you address equipment that needs to be replaced. In some areas, the vessel is operating as if it were new. In other areas, you are providing maintenance that is temporary. You'd expect that to reset to some increased cost over a period of time. It's a very mixed picture that doesn't lend well to a simple answer, unfortunately. Got it. Yeah, no problem. Understandable. Just shifting focus to the market, do you guys have any current color or thoughts around Chinese export quotas for the remainder of the year? Hey, Chris. It's James. In the past, they've granted the quotas, and you see an uptick over the summer. We have seen that so far this year. July exports were up around 900,000, up to 900,000 barrels, up from around 600,000, which is their kind of standard. It is very in line with what we saw last summer. That said, we have seen strong refining margins globally, particularly in China. We'll see. It is very much controlled at the top level. Got it. Appreciate it. I'll turn it over. Thank you. The next question comes from Liam Burke from B. Riley. Please go ahead. Yes, thank you. You announced a deployment of a carbon capture system on one of your vessels. Is this a significant capital investment on your part, and is there any sense on how effective this technology might be? Liam, thanks for the question. What we're trying to do in a period of uncertainty, not just uncertainty about revenues, but also uncertainty about technology and emissions and, you know, future propulsion, is we're trying to be curious while also staying thrifty. The answer to your question is this is not a significant investment by the company. It is part of an ongoing effort to understand the potential of onboard carbon capture, which can be or is promoted to be a very powerful tool to meet emission standards for vessels operating under fossil fuels for years to come. Where you will find us skeptical is in this transition period of jumping to technologies or fuels that don't yet have the infrastructure or the maturity to provide for the type of commercial deployment which we have, i.e., tramp trading. Whether it's methanol or ammonia or other fuels, we just feel that this transition is going to take a little longer than regulators and other sort of onlookers have promised. We are trying to get the most out of our traditional vessels, and that includes finding ways like carbon capture to keep them cost-efficient and energy-efficient. The pilot will be running for several months, and only then after the results are analyzed do we get to see whether this really has the potential that we think it does. In the meantime, it's really a cooperative effort. We're not putting in a lot of capital, but we are providing, obviously, one of our LR2s as the platform to run this pilot. Great. Thank you. James, refinery redistribution or refinery capacity globally has been a theme for several years now. Where are we on this redistribution? Do you see any continued benefit here, or have things sort of equalized? Continued benefit. This year, we're expecting net capacity growth of actually on a grid line of 600,000 barrels. We expect older refineries to continue to close. What is interesting is demand has remained strong. You see today, obviously, refining margins have continued to rebound. Underlying demand continues to surprise to the upside. I think that's very encouraging for the long term because on average, it takes seven years to build a refinery. A lot of refineries that have recently developed in emerging markets have had delays, cost overruns, and taken a while to come to market. If you're not building your refinery today, there's very little kind of change in the near term as we go forward. I think that's extremely positive for our business. Great. Thank you, James. As a reminder, if you have a question, please press star one. The next question comes from Frode Morkedal from Clarkson Securities. Please go ahead. Thank you. Hey, guys. I wanted to discuss oil demand. It seems to be coming in stronger than expected. I guess you see it in the crack spreads are quite strong. The shape of the future curve, you know, still in backwardation, so there is no large inventory builds happening, which have been forecasted for some time. Even in the freight market, right? The summer lows have been pretty good, I guess. Rates have been holding up quite well, right? Are you seeing anything from your side that points to this underlying demand? Is that unexpected? I don't know. Maybe in chartering activity, the level of time charter opportunities, arbitrage flows, and stuff like that. Hi, Frode. Emanuele. I think we agree with your views. The lows have been, I think you said, pretty good. We agree t he seasonal lows are okay compared to others, seasonal low that we've experienced in the past. The time charter appetite from oil major companies and major traders remains quite healthy. There is a little bit of caution in going longer periods. You find yourself with owners pushing for longer-term charters and charters wanting to still maintain shorter periods with optionality, of course, as you expect, which for the time being, not many owners are caving in for. It is understandable that charters want this because the uncertainty and the clouded visibility that we are all experiencing is what they are seeing as well. As we said, we remain optimistic, cautiously optimistic, but certainly optimistic about what the future lies ahead for the product tanker market. That's where we are. Great. What about ship values? I just noticed that the ship brokers have lifted the estimated buyout by a few million dollars, like a prompt resale MR above $50 million, which I thought was quite interesting, right? Given there's still big discounts to NAV in the sector, you know, stability and even increase in ship values are positive. Any insights into that? What's driving second-hand values? We've seen the correction in second-hand values. As you know, we've been capturing the opportunities on the sale side for the last 24 months. We stopped as the market has dropped a little bit faster than expected. Levels that the S&P market has reached were lower than we expected. I think that it was a factor of people just chasing and rushing for the next deal, and the market has gotten a little bit out of hand without real reasons. We see this adjustment as justified, this adjustment upwards, I'm saying, as justified. We, of course, welcome it. We always remain open to any S&P activity, but we are selective and focused on maintaining the right strategic balance for our fleet. We are not in any specific trend at the moment. We are watching what lies ahead, summer period, as we just discussed in the previous question. Usually, this is the low season, and the fact that the market has been higher than expected is probably what is also driving the S&P values up. Yeah, all right. Thanks, Emanuele. That's good insights. Sure. Frode, just one thing. As you know, if you get sort of a real sort of crunching down on Russia sanctioning, and/or significant changes in Iran, then that's another reason. It's just becoming more and more risky to hold the, let's say, the very older tonnage that's being traded in those areas in the tanker market. In that sense, you could start to get a market or continue to have a market where the newer vessels, whether they are 10, 12-year-old MRs and upwards, or LR2s, Aframaxes, whatever, move in one direction, and the older assets either stay the same or move in the other direction. This concludes our question and answer session. I would like to turn the conference back over to Emanuele Lauro for closing remarks. Thank you, operator. I do not have any further remarks. Just thanking everybody for their time and questions, and looking forward to speaking with everybody soon. Thanks a lot. The conference is now concluded. Thank you for attending today's visitation. You may now disconnect.