Smooth Sailing for Tanker Companies

ASC’s shipping rates have doubled. LPG’s profits surge 166% on an 80% jump in TCE rates. INSW achieves record results on elevated freight rates. Tanker companies are making money hand over fist -- and they are just getting started.

The results are in: The tanker stocks are crushing it!

A combination of the ongoing geopolitical tensions in the Middle East, longer trading routes due to the chaos in the Strait of Hormuz, increased demand for crude oil shipments and the limited availability of tanker vessels has driven shipping rates to the sky this year.

Consider this…

Very Large Crude Carriers, or VLCCs, are some of the largest tankers on the waters today, with the capacity to haul between 200,000 and 320,000 deadweight tons. That equates to about two million barrels of oil.

Shipping rates for VLCCs surged to more than $1.3 million per day by mid-October!

Suezmax and Aframax are smaller tanker vessels, with capacity to haul 800,000 to one million barrels of oil and 700,000 to 750,000 barrels of oil, respectively. And their rates have also skyrocketed.

Rates for these vessels jumped 20% by mid-October compared to last year’s rates.

And these elevated rates have bolstered profits significantly for tanker companies.

ASC Set to Prosper as Shipping Rates Double

Ardmore Shipping Corporation (ASC) operates a fleet of 29 MR product and chemical tankers, each earning a significant fee in the third quarter.

• MR Product Tankers: $27,031 per day
• Chemical Tankers: $23,266 per day

With high rates like this, it’s no wonder that Ardmore Shipping’s third-quarter profits increased nearly 30%, or that earnings exceeded analysts’ expectations.

• 3Q Earnings: $0.40 per share
• Analysts Estimates: $0.38 per share

As robust as Ardmore Shipping’s earnings were in the third quarter, there’s a bigger story in play.

Shipping rates have more than doubled in the fourth quarter!

Ardmore Shipping’s MR tankers are earning about $57,600 per day in the fourth quarter, or a 113% increase over the third quarter.

Chemical tanker rates have also risen, up nearly 30% in the fourth quarter to $30,100 per day.

What this tells me is that Ardmore Shipping’s profits in the third quarter will look like a drop in the bucket come year-end.

My stock grading system rates Ardmore Shipping as an A.

LPG Profits from an 80% Surge in Shipping Rates

Dorian LPG Ltd. (LPG) manages a fleet of 17 very large gas carriers, or VLGCs, that haul liquified petroleum gas around the world.

During its second quarter in fiscal year 2027, the company reported that the time charter equivalent (TCE) rate for its vessels jumped 80.5% to $53,725 per day.

And that more than 80% surge in shipping rates boosted Dorian LPG’s profits by 166%.

• 2Q Adjusted Earnings: +166.1% to $148.5 million
• 2Q Adjusted EPS: +164.1% to $3.46
• 2Q Revenue: +78.4% to $221.3 million

The consensus estimate only called for adjusted earnings of $2.84 per share, so Dorian LPG posted a 21.8% earnings surprise.

Dorian LPG didn’t provide an outlook for the third quarter or fiscal year 2027. But with VLGCs rates elevated and demand persistent, accelerating growth remains on the horizon.

My stock grading system rates Dorian LPG as an A.

INSW Achieves Record Earnings on Elevated Freight Rates

Remarkably high TCE rates for International Seaways, Inc.’s (INSW) massive fleet of 68 vessels led to record quarterly results.

Just look at the latest numbers…

• Spot Market TCE rate: $78,000 per day
• 3Q Crude Tanker Shipping Revenue: $359.0 million
• Product Carrier Rate: $12,400 per day
• Product Carrier Shipping Revenue: $124.0 million

These elevated shipping rates not only drove revenues higher but also increased profits significantly.

• Total 3Q Revenue: +146.4% to $483.0 million
• Adjusted 3Q Earnings: 407.8% to $5.84 per share

Third-quarter revenue and earnings crushed forecasts for revenue of $396.02 million and adjusted earnings of $5.79 per share.

International Seaways did not provide an outlook for fiscal year 2026. But given the exceptional tanker market and persistently high shipping rates, the company expects substantial growth going forward.

My stock grading system rates International Seaways as an A.

The Bottom Line

Tanker companies like ASC, LPG and INSW are thriving in an environment of sky-high shipping rates and insatiable demand.

But they’re not sitting on their laurels.

To better meet the world’s increased demand for energy shipments -- especially as countries around the world try to replenish depleted stockpiles -- all three of these companies have taken steps to expand their existing fleets.

• ASC expanded its original order for two Handysize product/chemical tankers to four. Delivery is slated for late 2028 and beyond.
• LPG recently inked deals for three new VLGCs from Hanwha Ocean. Delivery is set for 2030.
• INSW acquired Bruton Limited, adding four newbuild VLCCs to its fleet. It also took delivery for two LR1 newbuilds and has another four vessels to be delivered in 2028.

But as you can see with these timelines, vessels take years to build.

What this means is there will remain a limited supply of vessels on the global waters. So, as countries continue to demand more crude oil and refined product shipments, tankers will continue to earn a premium for their services.

In other words, shipping rates will remain elevated for the foreseeable future -- and tanker companies will continue to make money hand over fist.

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Louis Navellier and his family own Ardmore Shipping Corporation (ASC), Dorian LPG Ltd. (LPG) and International Seaways, Inc. (INSW).