Robert Bugbee: You’re seeing some very — LR2 are slightly more in order. You’ve just seen some weird things that are very, very cool. So you’ve seen, for example, vessels that are discharging in Europe from sorry, we have one chip, for example, it’s gone from the AG loaded in the AG gone around the Cape going to Europe, and it’s about to — it’s discharge in Hamburg. It’s going to reload in Amsterdam and then come all the way back around Cape and discharge in East Africa 6 days away from loading in AG. That is really kind of well, okay. And then you’ve seen routes that are related out in Asia 2, 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.
Frode Morkedal: Perfect. That’s very interesting. Great. Thank you, guys.
Operator: Our next question comes from Liam Burke with B. Riley FBR.
Liam Burke: 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? And how are you going to balance that between your buybacks where you have sort of a stated target as a percent of NAV.
Robert Bugbee: We’re simply not going to comment to capital allocation strategy until we achieve our goal and the [indiscernible] permutation of what you would do just between stock buybacks and dividends. So right now, we’ve always believed in regular dividends. And I think that the dividend increases is like a not or a recognition of the really improved underlying strength of the company. I wouldn’t say it as anything other than that. We’ve been regularly increasing that dividend all through last year, and we’re just adding it again to it now.
Liam Burke: Okay. Thank you. Obviously, there’s been a lot of talk about the Red Sea. How much has India as it stepped up both an importer or an export or import of crude and exporter of product tankers been to your advantage and how do you see that shaking out over time?
James Doyle: Robert, do you want me to take this?
Robert Bugbee: Yes, of course.
James Doyle: Liam, great question. Well, 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 million 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 that’s probably the next growth region.
Operator: Our next question comes with Chris Robertson with Deutsche Bank.
Ben Moore: This is Ben Moore calling on 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 pay down?
Robert Bugbee: I’m really sorry, Chris. I missed the question. I’m really sorry.
Ben Moore: Oh, I’m sorry. We wanted to ask you’ve outlined very strong fundamentals in the market. And 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?
Robert Bugbee: Yes. I will sort of restate this until we get to where — we finish the mission of paying down debt, and we’re really not going to really think about it ourselves. Now we have to see what the set of opportunities of. And secondly, we’re never going to telegraph it. It’s not possible way. So I’m going to say it to everybody. There is no way that we’re going to come out and say, oh, we’re going to buy back this much stock. Or we tend to pay out this much extraordinary dividend or we intend to raise the regular dividend to ex. We’re just going to act on whatever we have done. We’ve already got the stock buyback in place. So we’re not going to wake up one day and say, hey, guys, we’re happy, now this is what we’re going to do.
Ben Moore: And maybe as a follow-up, Cam, 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.
Robert Bugbee: I think that’s a wonderful, wonderful, wonderful question. When we’ve been through 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 a long-term war between Ukraine and Russia, the Panama and Canal transit inhibited, Red Sea transit inhibited. And some argue that the Palestine-Israel situation, the whole Middle East situation is getting worse, not better. And 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 we’re now way beyond three down to deviation of disruption anyway right now.
So it’s not Wall Street bank and all these new things is, there’s a complacency in the whole oil space as we look at price. And it’s like Wall Street is really wishing hoping all the time on every announcement that’s relatively dovish, but the facts are, if we go back talk October 7, virtually on a biweekly basis, the situation has got worse and not better. It’s hard for me to say, yes, we’ve reached the peak of dislocation. We don’t.
Operator: This concludes our question-and-answer session. I would now like to turn the conference back over to James Doyle for any closing remarks.
James Doyle: Thank you all for listening. Hope you all have a great day.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
