Robert Bugbee: I think you see is an ongoing [indiscernible]. I think I know that we see there’s an ongoing entity. I don’t think that you — I don’t think running off to nothing is not a — not something that’s been discussed. Obviously, the other — obviously, there’s always a public company, the alternative of someone wanting to buy the company. But other than that you look to carry the company forward.
Ken Hoexter: Right. That’s just because I want understand the timing of then when you’d have to start reinvesting to replace the vessels.
Robert Bugbee: [Indiscernible].
Emanuele Lauro: I think — if I may Robert, I think we act, I mean, the management team is, I think shown that we act and live as if it was forever, and we are opportunistic and reactive when we have to be on up markets and on down markets. So as far as a fleet renewal, I think that we have quite a bit of time to think about that. We still are sitting on the most modern fleet that any public company out there owns. We now have the lowest leverage or actually the lowest breakeven that we’ve seen in our company history. And we — the beauty of where we are is that we do not have to take a decision today. Robert was saying before, yes, if we are receiving offers on existing vessels that are attractive enough, we will look at them or consider them, and maybe continue training the fleet.
However, we are enjoying this market that are improving. And as you know, we’ve all heard Lars’s comments on what the markets are doing as we speak. So we are very relaxed, aware, and open to opportunities going forward knowing that we do not have to do anything for the coming quarters as it have to, but as you can do, yes, we have a lot of options ahead of us.
Ken Hoexter: Great, appreciate the thoughts. Thanks guys.
Emanuele Lauro: Thank you.
Operator: Our next question comes from Frode Morkedal of Clarksons Securities. Go ahead, please.
Frode Morkedal: Yes. Thank you. Hi, guys. Just a quick question on the market discussion you just had. It’s interesting to note that rates have been fairly similar to 2023, despite this Red Sea disruption, right. You would have thought, perhaps, a bigger impact on rates because of the turmoil expansion. But just if you have any ideas on why rates haven’t been higher? I guess, part of the answer is related to refinery run. But just curious if you have any other comments to that. That’s the first part of it.
Emanuele Lauro: I got be honest, I’m pretty happy with the kind of the rate structure as things are right now. I mean, there obviously has been kind of the refining maintenance in the states earlier. And then obviously, the Middle East now and China also a couple of months ago, all of that has been kind of front loaded to some extent. For the first quarter, I think it’s been absolutely fantastic. If I had to say, if there’s something that I think probably would change would be to see some of the arms opening up from the West to the East, I mean, the Naphtha arm has been somewhat shut. I think a lot because of the distance and view had to go all the way around. And the cost of opening up that [indiscernible] and therefore that has been somewhat less scepter [ph], for example, just looking at it from a very micro perspective is, is down for maintenance right now.
So that refinery, which is very much Naphtha related is not producing. So, there’s some other factors that you say, well, could there have been a bit more otherwise? I don’t think it’s a big thing, to be honest. I think that rates generally have had from a very high point, Greg, volatility has been oscillating wildly in some markets. The U.S Gulf is a case in point where you’ve seen rates move up $20,000, $30,000 a day within a week. The second one that has also been like a funky ride is been the Middle East on MRs has also moved up — could move up 100 [indiscernible] points. Also within a couple of days creating this kind of uncertainty, or how do you peg a market. So one thing I think it’s fair to say is that the underlying utilization level across the product tanker fleets is at a much higher level than we’ve seen before.
So it doesn’t take very much we have seen now and the sentiment generally with the owners as well is that it doesn’t take them very long time to turn into a bull, which we don’t have to go back that many years where we’re flat lining a lot and sentiment took a much longer time for it to kind of react to the fundamental prompt market dynamics.
Frode Morkedal: Yes, that’s interesting. I mean, I was looking at the IEA [ph] data, Q1 refining runs globally was down year-on-year, roughly about 81 million barrels per day and then they predict huge ramp up to 85 million in August. But I was thinking like we’ve been lower than you should have expected and what happens next in Q2 and Q3 when you have this ramp up, if it happens, that’s going to be very interesting, right?
Lars Dencker Nielsen: That’s, I think you hit the nail on the head there, Frode. That’s how I look at it, too. It’s quite interesting with all the things that took place in terms of maintenance and the pullback. You would in previous markets, going back a number of years, seen a lot more disruption and destruction at rates whereas we have been hovering very nicely at some very decent numbers in what tends to be a situation where rates would have reacted negatively. So if you add on all these elements in the stuff that you just talked about, and also the stuff around China that I just mentioned earlier and so on, we are so close to this capacity utilization where north of 90% or whatever, that you just add a little bit to it, and you start seeing extraordinary kind of increases that outsize the element of that, because you’re not trading at the margin.
Frode Morkedal: Thanks. Thanks Lars.
Lars Dencker Nielsen: Thanks, Frode.
Operator: Our next question comes from Chris Robertson of Deutsche Bank. Go ahead, please.
Chris Robertson: Hey, good morning, everybody. Thanks for taking our questions. Really excited to see the breakevens here. Fantastic job. Everybody just wanted to pass that along. But yes, my question is related to that. So if you engage in the prepayment, as you said, you could get to the 12.5 level, just curious what is the breakeven level today before that pre payments?
Emanuele Lauro: Hi, Chris. It’s about 16,000.
Chris Robertson: Okay. Yes, got you. I’m glad that it has that potential of an impact here. So that’s what we were trying to get at. My second question is kind of the often overlooked Handymax segment, just noticing quarter-to-date rates have gone down a bit there. And there seems to be a case where there’s a consistent mismatch between what some of the brokers provide in terms of the global averages versus what you guys actually put up. So I wanted to better understand the dynamic in that particular segment.
