Scorpio Tankers (STNG) 2026 年第三季法說會：隨第四季運價走強 股息調升 67%

重點摘要

• Scorpio Tankers 2026 年第三季調整後 EBITDA 為 1.72 億美元，調整後淨利為 1.27 億美元。
• 董事會將季度股利調升約 67%，從 每股 0.45 美元增至 0.75 美元。管理層預期將繼續每年提高股利。
• 截至目前的第四季已預訂平均運費率，LR2 型船約為每日 181,000 美元，MR 型船約為 56,000 美元，Handymax 型船約為 40,000 美元。
• 截至 10 月 26 日，公司持有 21 億美元現金，並報告總可用流動資金為 25 億美元，包含循環貸款額度。
• 未償還債務已降至 6.55 億美元，低於五年前的 31 億美元。每日現金損益兩平點目前在 每艘船 11,000 美元以下。
• 管理層預期煉油廠開工率上升、貿易航線拉長、庫存偏低以及有效船舶供給受限，將支撐成品油輪的需求。

核心財務數據

管理層說明，在當前的現金損益兩平水準下，平均每日運費率若為 30,000 美元，每年可產生高達 5.2 億美元 的現金流；若運費率為 60,000 美元，則可產生高達 13 億美元。

業務與營運表現

進入第四季後，成品油輪運費率強勁上升。管理層指出，中東原油出口量已從 5 月的每日 800 萬桶增加至近 1,700 萬桶，有助於推升全球煉油廠開工率 每日 400 萬桶。

海運成品油出口量在 9 月達到每日 2,060 萬桶，較 5 月低點成長 14%。亞洲占據該增長的大部分，其中約 20% 的亞洲出口運往蘇伊士運河以西的目的地。公司表示，這些較長的航線及相關的船舶調度，使得全球 LR2 和 MR 型船的可用性趨緊。

管理層還指出，自 2019 年以來，成品油輪的噸海浬需求已成長超過 20%，反映出煉油產能與最終消費者之間的距離不斷拉大。

船舶供給仍是該公司市場論述的核心部分。全球油輪船隊中約有 15% 受到制裁，其中 70% 的船齡超過 20 年。管理層估計，即使在明年預定交付新船後，全球船隊中仍有 26% 的船齡將達到至少 20 年。

成品油輪的手持訂單中將近一半是 LR2 型船。然而，根據該公司說法，現有 LR2 船隊中有 69% 正在從事原油運輸。扣除這些船舶後，管理層估計未來三年的有效淨油運輸供給成長率約為 4%；若老舊船舶退役加速，該成長率可能放緩至 1%。

管理層展望

管理層表示，第四季市場開局明顯轉強，截至目前的預訂金額，LR2 型船約為每日 181,000 美元，MR 型船為 56,000 美元，Handymax 型船為 40,000 美元。

公司預計不含燃料油的成品油需求，可能從目前的 每日約 7,400 萬桶升至一年內的每日 7,600 萬桶。管理層指出，中東和亞洲是增量出口的主要潛在來源。

由於成品油供需平衡在第四季與第一季可能持續偏緊，管理層表示補庫存可能要到下一年的年底才開始。這將使當前的消費需求與未來的補庫存需求成為分開的驅動力。

在第四季市場行情及即將以超過 1.4 億美元 出售兩艘 LR2 型船的支撐下，Scorpio Tankers 預計流動資金將在年底前持續增加。該公司表示，無需透過額外的債務融資，即可支應其約 13 億美元的剩餘船舶資本承諾。

風險與關注焦點

管理層強調，油輪市場與地緣政治事件仍具不確定性。儘管近期趨勢有利，現貨運費率的波動依然非常劇烈。

煉油廠開工率提高可能會使煉油利潤率從歷史高點回落。然而，管理層預期利潤率將保持健康，因為印度和中國以外地區預定增加的新煉油產能有限，且印度的一部分產出用於出口。

如果 LR2 型船繼續從事原油運輸，表面上的成品油輪手持訂單可能會高估淨油運輸供給。反之，原油與淨油運費價差的變化，可能會使船舶重新回到成品油市場。

儘管該公司有與新建造船舶及 VLCC 合資企業相關的重大資本承諾，但管理層表示，目前的流動資金足以支付相關費用，無需新增借款。

分析師問答亮點

• LR2 部署：Scorpio Tankers 在第三季約有三分之一的 LR2 現貨航次用於運輸原油，高於此前的約八分之一。只要經濟效益保持競爭力，管理層打算讓相關船舶繼續從事原油/重油運輸。
• MR 市場強勁：管理層將亞洲和美國墨西哥灣沿岸歷史新高強勁的 MR 運費率，歸因於貨運量充沛、航程拉長、轉運處理以及船舶可用性趨緊。
• 定期租船覆蓋率：公司認為在冬季來臨前無緊迫必要增加防禦性的定期租船覆蓋率。隨著船舶可供使用以及租船費率隨強勁現貨市場調整，公司將靈活考量增加額外的定期租船。
• 可轉換公司債：持有人可依每股約 99 美元 的價格轉換債券。Scorpio Tankers 目前無法贖回這些債券，也沒有預估會在公開市場實施買回。
• 股利政策：管理層選擇每股 0.75 美元的季度股利，認為該水準能在整個景氣循環中維持可持續性，同時保留每年調升的空間。
• 俄羅斯貨物：管理層表示運往美國的貨物數量過小，對主流油輪市場不會產生顯著影響。

法說會完整逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Hello, and welcome to the Scorpio Tankers Inc. Third Quarter 2026 Conference Call. I would now like to turn the conference over to James Doyle, Head of Corporate Development and IR. Please go ahead, sir.

James Doyle

Thank you for joining us today. Welcome to the Scorpio Tankers Third Quarter 2026 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; Lars Dencker Nielsen, Chief Commercial Officer. Earlier today, we issued our third 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, October 28, 2026, and may contain forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For a 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 two, if you have an additional question, please rejoin the queue.

Now I'd like to introduce our Chief Executive Officer, Emanuele Lauro.

Emanuele Lauro

Thank you, James, and good morning or good afternoon, everyone. Over the past quarters, I've spoken about our focus on things we can control, like strengthening our balance sheet, lowering our cost of capital and cash breakevens, optimizing and renewing our fleet and returning capital to shareholders. That approach has not changed. Today, Scorpio Tankers enters the fourth quarter of 2026 in the strongest financial position in its history with a modern fleet and considerable flexibility to navigate the cycles ahead. In the third quarter, we generated an adjusted EBITDA of $172 million and adjusted net income of $127 million. To appreciate how far we have come, 5 years ago, the company had $3.1 billion in debt and just $230 million in cash. Today, we have $655 million in debt and more than $2 billion in cash. At the same time, we've continued to lower our daily cash breakevens, which is now below $11,000 per day per vessel. This gives us significant structural advantage. In a strong market, we're positioned to generate substantial free cash flow. In a weaker market, our low breakevens and strong balance sheet provide resilience and the flexibility to take advantage of opportunities.

We have applied the same discipline to our fleet. As I mentioned last quarter, we've sold older vessels at attractive prices and selectively reinvested in modern fuel-efficient tonnage. This is our approach to fleet renewal, realizing value from existing assets while strengthening the fleet for the years ahead.

Turning to markets. The fourth quarter is off to a much stronger start as we enter what is typically the seasonally strongest part of the year. To date, for Q4, we've booked our LR2s at approximately $181,000 per day, MRs at $56,000 per day and our Handymax vessels at $40,000 per day. While crude tankers have led the broader market in 2026, product tankers have begun to follow. Increasing crude volumes from the Middle East are supporting higher refinery runs and refined product exports. Together with the constrained vessel supply, we believe these dynamics are creating favorable conditions for product tankers and the potential for further strengthening in rates. As always, there is uncertainty around how markets and geopolitical events will evolve. But as I said last quarter, our job is not to predict the cycle. Our job is to be prepared for it. That brings me to capital returns.

Today, our Board increased the quarterly dividend from $0.45 per share to $0.75 per share. This is an increase of approximately 67%. This decision reflects the strength of our balance sheet and our confidence in the company's ability to return capital to shareholders through the cycle. We expect to continue increasing the dividend annually. We have built a platform that can generate meaningful cash flow in strong markets, remain resilient in weaker ones and preserve the flexibility to invest when the opportunity arise. That philosophy has guided us for many years, and it will continue to guide us in the years ahead. Just would like to thank you for your continued support.

My opening remarks are over, and I would now like to turn the call to Robert. Thank you.

Robert Bugbee

Thank you very much, Emmanuel. Wow, what a fantastic report this is. But there are a few things I'd like to highlight that aren't necessarily on this report, clearly. So first of all, the cash balance of today doesn't really demonstrate the real strength of the company. You should note that the spot revenue cash that has been generated for the whole of April has had no distribution yet from our pools to the company. So in this sense, the cash balance is understated. Pro forma, we're still awaiting the conclusion of the sale of $145 million from 2 LR2 sales with later for delivery later this year.

Lastly, we're going to do something unusual. I mean these are special earnings. I think you should see what we are seeing underneath this. But our markets have accelerated quite steadily since July. And as we approach, as Emmanuel indicated, the strongest part of our year, bearing in mind, this is still only October, and we're not even near Thanksgiving yet. I think it's worth looking at the monthly movements since July in our market. The MRs in July earned approximately $29,000, in August $30,000, in September $32,000; in October $53,000 and in November for the first 37%, nearly $70,000. The LR2s in July earned $55,000, August $71,000; September $82,000; October $168,000 and for 37% so far in November, approximately $215,000 a day.

I think this is really showing how the refineries have been steadily receiving more oil. And as they receive more oil, they export it. And all of this is before we get to the strongest -- the real strength in the market traditionally, which normally comes a week -- a week before Thanksgiving and 2 weeks after.

With that, I'd like to pass it over to James.

James Doyle

Thanks, Robert. Slide 7, please. Product tanker earnings have been improving for several months, but the real acceleration has come in just the past few weeks, as Robert has highlighted. Since May, Middle East crude exports have more than doubled from 8 million barrels per day to nearly 17 million. The additional crude supply has helped drive a 4 million barrel per day increase in global refinery runs, translating into higher product exports and stronger tanker rates. And we believe the fundamentals point to further strengthening, low inventories, resilient demand, rising refinery runs, longer trade routes and limited vessel supply. Slide 8, please.

In September, seaborne product exports reached 20.6 million barrels per day, a 14% increase from their May lows. Much of this growth has been driven by Asia, where increased crude availability has allowed refinery runs and exports to increase. Around 20% of Asian exports are going long haul to destinations west of the Suez Canal. This has strengthened LR2 and MR rates in Asia, but also globally as longer voyages and fleet repositioning tighten supply. Slide 9, please.

There has been considerable discussion about inventory restocking with more than 600 million barrels drawn since the start of the conflict. But there's an important point that often gets overlooked, underlying demand remained strong. Much of the additional refinery output will first be needed to meet current consumption, supporting higher product tanker volumes. Only after that can inventories begin to rebuild, creating another potential tailwind for tanker demand. In other words, we see 2 sources of demand, meeting today's consumption and replacing yesterday's draws. Slide 10, please.

Over the past decade, global refining capacity has shifted further away from the end consumer and overall net capacity growth has been limited. And the strength in refining margins today reflects just how tight global refining capacity has become and how far that capacity is from the end consumer. As a result, product tanker ton-mile demand has increased by more than 20% since 2019. And with refinery runs and exports continuing to rise, we expect further growth in ton-mile demand. Slide 11, please.

Turning to vessel supply. Approximately 15% of the global tanker fleet is sanctioned with 70% of those vessels over 20 years old. While sanctions have attracted significant attention, the broader fleet was already aging. Even after next year's scheduled deliveries, approximately 26% of the fleet will be 20 years and older. The aging of the fleet is a structural challenge regardless of sanctions and at some point, will reduce fleet growth through scrapping. Slide 12, please.

This brings us to another important point about vessel supply. Nearly half the product tanker order book consists of LR2s. However, 69% of the existing LR2 fleet is currently trading crude oil, and we expect many of these vessels to remain in that market. Adjusting for LR2s trading crude, effective supply growth could be closer to 4% over the next 3 years. But factoring in accelerated retirements of older vessels, that figure could fall to just 1%. The key takeaway is that underlying fleet growth overstates the actual increase in clean trading capacity. And this is happening against the backdrop of rising demand, increasing refinery runs, low inventories and longer trade routes. We believe this creates a favorable environment for product tankers with room for further strengthening.

And with that, I'll turn it over to Chris.

Chris Avella

Thank you, James, and good morning or good afternoon, everyone. Slide 14, please. This past quarter, we generated $172 million in adjusted EBITDA and $127 million in adjusted net income. We also recorded $153 million gain on the sales of 5 vessels, repaid $200 million in debt through the early redemption of our Nordic bonds and paid $23 million in dividends. The chart on the right shows the evolution of our net debt position since December of 2021. Our capital allocation policy over this period has been headlined by debt reduction followed by a disciplined and sustainable dividend and opportunistic share buybacks. As you can see, this approach has resulted in the reduction of our net debt position by $4.5 billion from a net debt balance of $2.9 billion at the end of 2021 to a net cash position of $1.4 billion or $27 per share as of today.

Our balance sheet has never been stronger, and our outlook for the sector is optimistic. It is against this backdrop that we are pleased to announce a 67% increase to our quarterly dividend from $0.45 per share to $0.75 per share. Slide 15, please.

Our focus over the past 4 years has not only been on reducing our debt burden, but also the optimization of our capital structure through transactions, which have lowered the company's cost of capital. The chart on the left shows our outstanding debt by type since December of 2021. As you can see, our capital structure has been completely transformed from $3.2 billion of debt comprising primarily of expensive lease financing to $655 million of debt comprised mostly of fixed rate convertible debt with a 1% yield to maturity. These convertible notes were issued in April and May of this year and have a $605 million face value. $230 million of this amount was issued in a follow-on offering priced at a 10% premium to par. So while the notes carry a 1.75% fixed coupon, the premium to par achieved on the follow-on offering reduced the combined yield to maturity to below 1%.

The notes are convertible under certain conditions at approximately $99 per share. This transaction, along with the sales of vessels at cyclically high prices, enabled us to repay $357 million of legacy secured debt and to redeem our $200 million 7.5% coupon rate senior unsecured notes. The chart on the right shows the significant decline in our borrowing costs over the past 4 years. We have $50 million of secured debt outstanding through a credit facility with Bank of America, which was executed earlier this year. We also recently executed a $90 million credit facility with Standard Chartered Bank and DekaBank. This facility is currently undrawn, and we have until October 31, 2027, to draw down on it. Both of these facilities carry margins at just 120 basis points and have 7-year tenors from their respective drawdown dates. Slide 16, please.

The chart on the left shows our liquidity profile. We had $2.1 billion in cash as of October 26 and an additional $483 million in availability under revolving credit facilities for a total of $2.5 billion in available liquidity. As Robert mentioned, this balance does not include the full hire payments for October, which we expect to be paid within the next week for over $100 million. With the strong fourth quarter outlook and the sales of 2 LR2s for over $140 million, which are pending closing, we expect our liquidity position to grow through the end of the year. We currently have commitments to purchase 17 newbuilding vessels and to contribute equity for the minority interest in a joint venture of 8 VLCCs under construction.

The chart on the top right is a waterfall reflecting our remaining commitments under these agreements, which total approximately $1.3 billion. Our disciplined allocation of capital over the past 4 years has provided us with the financial flexibility to enter into these agreements, and we highlight that we can afford all of these vessels without the need to obtain debt financing. This puts us in a very competitive position, especially during a period when benchmark interest rates are on the rise. Slide 17, please.

Our cash breakeven rates, which include vessel operating costs, cash G&A, cash interest payments and commitment fees and regularly scheduled loan amortization are below $11,000 per day. To illustrate our cash generation potential at these cash breakeven levels, at $30,000 per day, the company can generate up to $520 million in cash flow per year and at $60,000 per day, the company can generate up to $1.3 billion in cash flow per year.

This concludes our presentation for today. I'd like to thank everyone for their time and attention. And now we'd like to turn the call over to Q&A.

Operator

[Operator Instructions] The first question today comes from Omar Nokta with Clarkson Securities.

分析師問答

Omar Nokta

Clearly, another solid quarter here in the bag and your bookings for the fourth quarter are quite strong. And Robert, as you perhaps illustrated, it's just like a staircase improvement with each passing month. I do have a mix of a market and Scorpio specific question here. On the last call, Lars, I recall you mentioned that it makes sense for us when we think about what you can capture on the LR2s that we should be looking at spot market averages for crude Afras and clean LR2s. And it looks based off of your guidance for the fourth quarter that that's right there right in the middle. Can you just talk a bit about that dynamic a bit more, how you're trading the LR2s today? And I think you mentioned last quarter that 4 LR2s are trading dirty. But just wanted to see if you could give us an update on that. And just in general, how do you think about the LR2 market from here, how it's developing and thoughts as we move forward given a good chunk of the fleet transition to the dirty trade? Sorry for the long-winded question.

Lars Nielsen

Oman, I'm going to try to answer as best as I can. I think if you go back when we had the last call, I think we had -- if you look at the overall spot exposure on LR2s, we had about 1 in 8 voyages in crude. Today, as things stand, we probably have 1 in 3 in the third quarter. And that was kind of a reflection of where we saw the crude market was relative to the clean market. We kept our powder dry on some of our clean ships with the anticipation that the clean was at some point going to ramp up, in particular because you had seen so many of the LR2s, as we also talked last time, moving into dirty. That kind of direction of travel continued. And you've got probably 70% of LR2s now trading in dirty. I think that's by end of September. And you've obviously seen now with the increasing crude exports, et cetera, going in, higher refinery runs and so on. And suddenly, the fuse was lit. And the LR2 rates that you're seeing today are -- they're astronomical. So you today have a kind of a perfect situation really where because of the lack of supply in the crude market because of the sanctioned fleets on the Aframaxes, we have a very strong Aframax market as well, a little bit more volatile. And now you have a resurgence in the LR2s that we see a lot of follow-on, and we can also see it on the fixtures that we've been doing this week as well that rates are extremely high. So as we are looking into and heading into the winter market, and as Robert said, the party hasn't really started yet. So we're very kind of happy with our position in terms of how we position our LR2s vis-a-vis our Aframaxes and are comfortable with that.

Omar Nokta

Very helpful color and context. And maybe just as a second question, and I'll pass it over. Maybe just sticking with the market. You discussed the LR2s. Can you just maybe talk about the MRs? We saw fireworks during the second quarter, a bit of a moderation in the third, but here, things have gone beyond what we've been seeing and they're at cyclical or, I guess, all-time highs right now in terms of spot rates. What's been driving that strengthening here in the past few weeks?

Lars Nielsen

Well, first of all, it is the first time in my career that I've ever seen a market in Asia being this strong. We have seen spikes in Asia where the West was weak, volatility. We talked a lot about in the U.S. Gulf. We've seen very high rates and then moving down very, very quickly. But as of today, on the 28th of October, you've got rates in the U.S. Gulf trading north of $80,000 and you've got rates in Asia on long-haul round voyages also trading between $70,000 and $80,000. This has never been seen before. So it's -- there's plenty of cargo. And the U.S. story we talked about before. We've talked about the China product export issues. But the thing is that a lot of these ships are going longer haul. And we've had the Australian demand story going on for a number of years, that continues. But now we're seeing a lot more moving into the U.S. West Coast and also into South America -- the West Coast of South America. And obviously, ton mile means a lot in what we're doing in these things. Frankly, and I think it goes across any type of ship you're dealing with every barrel that you're going with is that it's traveling further and it's slower. There's a lot of double handling taking place, a lot more ships are being soaked up in different areas, which is required, in particular, of course, in the Middle East, but it's not only to that area.

So even though you would say purely on ton miles that we are maybe slightly up, but there is a lot more requirement for ships generally in the market that requires the ships to double handle, and we are seeing obviously a kind of a shrinkage in supply of vessels in all markets.

Operator

The next question comes from Chris Robertson with Deutsche Bank.

Christopher Robertson

Maybe a question for Chris. Just looking at the convertible with the market strengthening here, presumably, there will be a response in the equity. And I think you alluded earlier that the conversion price would be around $99. So just wondering how you're thinking about that in terms of early redemption, certainly going to be a lot of cash generation here with the current strong market.

Chris Avella

Sure, Chris, thanks for the question. Just to be specific, the conversion price is $99. That's convertible at the option of the holders right now. We are in a window where the company cannot redeem it. So if we were to do anything, it would be open market purchases. We're not going to forecast that at the moment. So right now, we're happy with where we are with the convertible, and it's likely to stay at that level.

Christopher Robertson

All right. Yes. Got it. Just turning to a more broader market question, maybe a little bit more specific pertaining to geopolitics here. But -- we've seen some of the Russian cargoes starting to come to the U.S. Is there going to be any impact on the mainstream like legitimate tanker market? Or is this more of a, for lack of a better term, a slide show?

Robert Bugbee

I mean I'll start off and just say it's going to be a slide show. It's a flash in the pan. The volumes are so small in the overall market that it will not move the needle in terms of the normal tanker trade. On top of that, if you were to talk about the ships that were sanctioned, most of them going to be 20 years old and so on. So anything that deals with this particular issue in its narrow sense will have a very limited impact on our market.

Operator

The next question comes from Greg Lewis with BTIG.

Gregory Lewis

I would love to hear a little bit more how we thought about setting the dividend where it is. I think in the slide, you have the $11,000 breakeven, but it was a substantial dividend increase. So just kind of curious how we kind of backed into that $0.75 quarterly dividend rate.

Robert Bugbee

Sure. I think that's a great question. So, I think it's very clear that the company, as Emmanuel alluded to right from the beginning of the call, has really taken a quantum step-up in its balance sheet strength. And we are -- and Lars says, we're the party hasn't yet begun in a seasonal basis in products is another good statement. And so we're very confident that we can fulfill our first requirement, any form of dividend that we can maintain its regularity and it's sustainable throughout the cycle. And the second one is that, as Emmanuel said, is that we can raise that dividend every year. And so we wanted to create a point where it was so obvious we're going to make a strong step upwards, which I think we've done, 67% is the strong step upwards and make a strong start whilst knowing that absolutely that even if our hopes or expectations don't come true for whatever reason, that we've still got room to move it upwards even if the market collapses. And we're very -- what we want to do with the dividend is to provide some sort of certainty for shareholders and not just a return, but some sort of certainty in uncertain times, let's say, a trampoline. We have the benefit in the company of interest rate increases at the moment, whatever the Fed does today or doesn't do, if they raise interest rates will be an unusual company that it's accretive. So we're not really worried about that. So that's the thinking behind it. We haven't yet -- we spent so much time in the last month and actually handling a spot market that's been super strong and super volatile and earning as much money. So we haven't created a scientific testing process for this. We have listened to the counseling of some of our top long-only shareholders as to what they would like to see and why they would want to have a dividend and why they'd like to have a sustainable business and why they'd like to have it increasing. So this I would see as a significant step in a number of reoccurring steps.

Operator

The next question comes from Stephanie Moore with Jefferies.

Stephanie Benjamin Moore

Maybe just taking a step back here and talking a little bit about the broader market dynamics here. I guess with the Middle East supply and refinery operations recovering, how are you thinking about the net impact on just overall demand? I mean you definitely called out just the consumption and then restocking opportunity. But maybe if you could just bucket where you see the biggest opportunity in terms of export volumes out of the region? And also timing-wise, how long of a runway would we expect to see some of these demand drivers pan out?

James Doyle

Thanks, Stephanie. I'll take that. So look, from a demand perspective, things have remained quite strong. If you go back to the lows in May, I think refined product demand, excluding fuel oil was around 70 million barrels per day. Right now, we're probably at 74 million. And if you fast forward a year from now, we could be at 76 million. So we could see 2 million barrels more of demand growth. I think the biggest opportunities for where that supply comes from will be the Middle East and also continued exports out of Asia. And we expect that to continue really if you look at forecasted refinery runs through 2027. There could be a chance that supplies are very tight and balances are very tight in Q4 and Q1 of this year. So we wouldn't expect restocking until potentially end of next year. So there's some good runway there. And right now, fundamentals look really strong.

Stephanie Benjamin Moore

Absolutely. And then just on my follow-up question, I think one area that might be -- we get a question would be just overall appetite to maybe increase your term coverage. Obviously, spot markets are strengthening. How do you kind of balance preserving upside but also maybe locking in some attractive rates as well?

Robert Bugbee

I'll take that to start with Lars adding any detail if he wants to. So I think that we frame everything in, let's say, our overall balance of charters, and we have -- and a risk and reward. As James has said, we have a very optimistic view of the market at the moment. Things changed a lot 4, 5 weeks ago when suddenly we started to see more oil transit through the Strait of Hormuz, which enables those refineries to be back up and exporting and set the stage for what James has just been talking. So within that, we don't have to make a call on a defensive call. There's no reason to make a call on the actual market at the moment that you can see by the rates that have -- it happened very quickly. This ripping up in LR2s, ripping up that's going on right now in the MRs. I mean I spoke earlier about MRs first part of November hitting 70, and Lars is already talking this morning in the 80s. And that is -- we have to wait a little bit for the charter market to catch up.

So right now, we're very happy with the situation. We can -- we're right in front of winter and there's no urgency to put time charter coverage on. As we move forward, we'll do what we've done before. We'll have some vessels coming off, and we're looking to -- one way of looking at it would be what does it take for us in terms of secure income to actually cover all of our everything. So basically, have a charter fleet that is enabling the spot fleet to operate at 0 as a operating cash breakeven. That's one way we could look at this going forward. We haven't yet decided. But I would say that you could expect us to continue what we've been doing, which is at opportune times in the market to continue to add time charter coverage.

But as to timing, I'll pass that to Lars at the moment. Lars?

Lars Nielsen

Thanks, Robert. I think you encapsulated it perfectly well. We look at it opportunistically as ships come off. We see the various market positions are at the time, and then we make a decision that follows that the market in our view and the forward curve.

Operator

The next question comes from Liam Burke with B. Riley.

Liam Burke

You have a few LR2s trading dirty. Do you just still want to leave them as be? Or is there any thought of bringing them back into the clean market?

Lars Nielsen

As the things stand right now, Liam, they will stay as dirty as they are trading just as fine as they're doing right now. If the spread changes, then we will make a decision. The fungibility, as you probably know, between LR2s and Aframaxes has kind of increased to some extent and the availability of cleanup cargoes have increased and the appetite from end users have also increased, enabling us to do so. But as markets are as they are today, we're not going to change anything.

Liam Burke

Great. And I think this is for James. James, refinery margins peaked. They're coming off record highs, I think, here. Is there any concern to rates or all the things you laid out in your prepared comments offsetting any kind of decline in refinery margins?

James Doyle

Look, I think margins, as you highlighted, we were at record levels, right, and they're records for a reason. What we see is high refinery runs, which is beneficial to products, but probably comes at the cost of margins, right? So the tightness you see on the supply-demand side, right, will eventually be used by more exports, which benefits us. So I think margins will still remain healthy because the reality is there's not a lot of refineries being built over the next few years. And actually, 90% of the capacity that's coming on is between India and China. And most of the Indian product or a portion of it gets exported. So we view this as structurally positive.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Emmanuele Lauro for any closing remarks.

Emanuele Lauro

Thank you, operator. No closing remarks other than thanking everybody for their time and attention today and look forward to speaking in the weeks ahead. The call is over. Thank you.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.