Why 2015 Will Be A Great Year For Tankers

According to Credit Suisse analyst Gregory Lewis, 2015 may end up being a year to remember for tanker investors. In a new report, Lewis discusses exactly why Credit Suisse is so bullish on several tanker names.

Muted downturn
Now that Q2 has provided some additional clarity of the tanker business, Credit Suisse believes that the anticipated summer downturn will not be as pronounced as feared. Tanker prices continue to surprise to the upside, with current VLCC rates over $70k/d and product tanker rates in the upper $20k/d range. While Credit Suisse is still anticipating some mild summer weakness, Lewis believes that the foundation has been built for a strong winter season.


Iran uncertainty
Credit Suisse recently spoke with energy consultant firm FGE regarding the potential impact of a deal with Iran that would involve the reduction or elimination of oil sanctions. Lewis lists the five takeaways from the discussion:
1. The potential for 500kbd of new volumes placed with buyers by the end of the year
2. Iran has already begun discussions with buyers
3. An additional 700kbd could be in play as soon as six months following the lifting of sanctions
4. A price war is not in Iran’s best interest
5. About 37M barrels of products and condensate in storage

Stock picks
After adjusting 2015 earnings estimates, Credit Suisse is now 7-8 percent above consensus estimates for its top three tanker stock picks.

Cedit Suisse reiterated its Outperform ratings on Euronav NV EURN, Scorpio Tankers Inc STNG and Tsakos Energy Navigation Limited TNP.