Q&A with CEO of Tankers International

Charlie Grey, CEO of Tankers International

Charlie Grey, CEO of Tankers International, leads the world’s largest VLCC pool. In this exclusive Marine Log Q&A, Grey answers questions on hot topics in the global shipping industry, from the outlook for the VLCC segment, thoughts on crude oil flows in the Atlantic basin and China, and the profitable VLCC sector as a whole as it navigates the twin challenges of decarbonization and digitalization.

Tankers International was established by a group of tanker owners comprising, among others, industry-listed giants such as Euronav NV and International Seaways Inc., and VLCC owners with a growing pool of 64 vessels and counting.

Marine Log (ML): A big question many have is what about Russian oil?

Charlie Grey (CG): Sanctions against Russia mean many countries have banned imports of Russian oil. These sanctions have driven up demand and subsequent prices from other producers with implications such as rising tonne-miles. As a result, VLCCs have returned to prominence, especially on the US Gulf to Europe trade route. Meanwhile, Russia is finding alternative customers for its crude oil output, mostly in Asia, boosting tonne-mile demand for smaller tankers in the suezmax and aframax segments.

ML: How do you guard against involuntarily breaching sanctions given all the deceptions practiced by various bad actors?

CG: Undoubtedly, the industry must take the dark fleet seriously and its growth has served to spotlight the rest of the tanker industry, and motivated it to up its game to ensure safe and transparent operations. 

ML: In more positive news, can you give us the outlook for the VLCC segment?

CG: Despite the uncertainty facing the global economy and substantial geopolitical risk, tanker freight markets are enjoying positive demand side dynamics with strong fundamentals and volume diversity, and oil in transit continues to be at record levels. Add an ageing global fleet and shipyards at maximum capacity until 2027, and these factors will drive an even higher freight market and rising asset values. Meanwhile, the distance side of the tonne-mile equation is set to grow further, setting up the tanker segment for a bullish period.

ML: What are your thoughts on crude oil flows in the Atlantic basin and China?

CG: Oil demand in China this year has been robust. Record-high crude import levels are reflected in strong VLCC activity, even if this has gone unnoticed amid the focus on lost VLCC barrels from the Middle East. The trend of more Atlantic cargoes going east continues, with preliminary counts showing Atlantic Basin-to-China VLCC liftings up from 34 and 38 monthly liftings in Q1 and Q2, respectively, to 41 monthly liftings in Q3.

October fixture data shows a significant jump to 46 bookings. This compares to an average of 29 monthly liftings on the route in 2022. The combination of Chinese demand and Atlantic Basin supply will continue to be a key market characteristic in the coming months. Most oil supply growth for China will continue to come from the Atlantic Basin, and this geographic mismatch means that we should expect to generate VLCC segment demand.

ML: What about decarbonization and digitalization in the VLCC sector?

CG: The two Ds, decarbonization and digitalization, are driving the VLCC segment in both the near and long term. For example, we’re already seeing charterers opt for tonnage that offers superior environmental performance, ranging from alternative fuel-powered vessels to the highest fuel efficiency, as well as being equipped with technologies that unlock further operational efficiencies.

Tankers International is constantly monitoring the global energy transition and the use of renewable sources of energy, and we’re focused on developing a pool that contains the lowest carbon intensity and the most carbon-efficient fleet of vessels within the industry to meet these goals.

Meanwhile, there is no doubt that data and digitalization have already transformed tanker shipping. Whether it is effectively using destination models in freight forecasting or democratizing the famously obscure world of VLCC fixtures, data and digital solutions are having a transformational impact on the sector.

We utilize complex digital data analysis techniques to improve the recording and benchmarking of vessel efficiency. This analysis will ultimately not only be used to optimize the performance of every vessel in the Tankers International Pool, especially in relation to efforts to decarbonize shipping, such as the CII and EEXI standards, but also to increase returns for pool partners. 

Our app’s CII and EEXI update provides the ability for subscribers to access historical data and make informed decisions based on CII ratings. The scale of our pool also enables voyage optimization decisions to be taken to maintain and protect vessel ratings for partners whilst delivering associated operational efficiencies and, therefore, emissions reductions.