Unprecedented Strait closure sets 2Q rate record; buys 2 & sells 1 vessel; PO $78

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Teekay Tankers Limited

Unprecedented Strait closure sets 2Q rate

record; buys 2 & sells 1 vessel; PO $78

Reiterate Rating: UNDERPERFORM | PO: 78.00 USD | Price: 79.37 USD

2Q hit record peaks; 3Q dipped & rebounded

03 August 2026

Teekay Tankers posted adj. diluted EPS of $5.55, up 295% year-year, above our $5.23,

but below Street’s $5.71. Crude tanker rates surged 48% from 1Q26 to all-time records,

following the unprecedented closure of the Strait of Hormuz. Spot TCE rates in 2Q26

were $87,500/day, 1% below our forecast, while time charter out rates were $37.5/day,

7% above our estimate. Rates in 2Q26 averaged $30,000/day above its prior 1Q23 high,

highlighting the superstrength in vessel rates, which along with a vessel sale and $200m

in FCF from ops, leaves TNK with $1.2 bil in cash and no debt. CEO Kenneth Hvid noted

Asian refiners sourced replacement barrels from the Atlantic Basin (vs. the significantly

closer Middle East), creating a wave of long-haul crude moves and tightening available

tonnage. TNK booked 44%/44% of its 3Q Suezmax/Aframax days at $104.8k/$59.9k/

day. While booked rates are down 4%/19% from last quarter’s all-time record (at $109k

and $74k), rates rebounded into late Jul/early Aug as hostilities ramped, and are averaging

$110k/$90k/day for fixtures booked in August. We forecast 3Q spot TCE rates of

$85k/$53k/day for Suezmax/Aframax tankers. Nevertheless, we may have passed peak,

as rates pull back, the largest orderbook in 15 years, and potential sanction unwind.

Equity

Fleet renewal ongoing: Buys 2, sells 1

TNK continued its fleet renewal program in 2Q, as it acquired two Suezmax tanker

newbuild contracts (in 1Q26, due 2027, for $190m), sold one vessel (its sole VLCC,

completed Jul ’26 for $84.5m, with a $22.9m gain in 3Q), and completed its previously

announced sale of a 2009-built Suezmax in June for $53.5 mil (a $32.5 mil gain). The

company has 35 medium-sized crude tanker vessels, 2 on order (6 on fixed time

charters, 29 in the spot market (26 owned, 3 chartered in). It also has 2 STS vessels.

Raise PO to $78

We increase our PO on TNK’s shares to $78 from $75, on 5.5x our ‘27e EBITDA estimate

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