Key Highlights

• International Seaways reported Q2 2026 adjusted Net Income of $295 million, or $5.91 per diluted share, beating the $5.28 estimate by 11.93 percent.

• The company generated record free Cash Flow of $261 million for the quarter and declared a record quarterly Dividend of $5.05 per share.

• Blended spot time charter equivalent rates rose to $79,000 per day, compared to $27,500 per day a year earlier.

• The company ordered four additional LR1 newbuild vessels for delivery in the second half of 2028, securing pricing similar to an order placed three years ago.

Record Earnings Driven by Elevated Tanker Rates

International Seaways, Inc. (NYSE:INSW) reported record second quarter adjusted net income of $295 million, or $5.91 per diluted share, alongside record adjusted EBITDA of $345 million. International Seaways is a U.S.-based owner and operator of Crude Oil and refined petroleum product tankers, with a diversified fleet spanning VLCCs, Suezmaxes, Aframaxes, and LR1 and LR2 vessels. Blended spot time charter equivalent rates, weighted by Revenue days, reached $79,000 per day, up from $27,500 a year earlier and $55,600 in the first quarter, while crude tanker revenues of $253 million included $51 million from profit-sharing arrangements on time-chartered vessels.

The company generated record free cash flow of $261 million for the quarter, funded by $345 million in adjusted EBITDA less Debt service, dry dock and capital expenditures, and Working Capital usage. Management noted the lightering Business , which involves transferring cargo between vessels, contributed approximately $5 million of EBITDA, and that the consolidation of a majority-controlled Suezmax pool entity added gross revenue and expense without materially changing the company's underlying Economics .

Elevated Rates Tied to Middle East Disruptions and Tightening Fleet Supply

Management attributed elevated tanker rates in part to disruptions in the Strait of Hormuz and Bab el-Mandeb, waterways that together have historically handled nearly 25 million barrels per day of crude and refined products, which have forced cargoes onto longer alternative routes and increased ton-mile Demand . The company noted that strategic petroleum reserve drawdowns have offset much of the impact on commercial oil inventories so far, meaning any future replenishment of those reserves could become an additional source of tanker demand if the disruptions ease.

On the supply side, the company highlighted that roughly 30 percent of the global tanker fleet is over 20 years old today, a figure expected to exceed 50 percent by 2030, a dynamic management believes will support continued fleet renewal demand even as new vessel orders increase amid a favorable financing environment. The persistence of elevated rates depends heavily on how these geopolitical disruptions evolve, and management acknowledged that sustained disruption could eventually weigh on global oil demand and, in turn, tanker demand, rather than solely benefiting ton-mile economics indefinitely.

Fleet Renewal Continues With Additional LR1 Newbuild Order

International Seaways ordered four additional LR1 vessels for delivery in the second half of 2028, complementing six vessels ordered roughly three years earlier, four of which are already on the water. The company said it secured pricing on the new order essentially matching what it paid three years ago, even as industry-wide newbuild prices have risen by double digits, an outcome management attributed to a longstanding relationship with a trusted shipyard counterparty in Korea. The ten total LR1 vessels will trade in the Panamax International pool, which has averaged more than $70,000 per day over the past nine months.

The company was more circumspect about the product tanker outlook than crude, noting continued disruption from Ukrainian strikes on Russian refineries and inconsistent Middle East product exports, alongside signs of recovering U.S. and now-returning Chinese refined product exports. Management's overall fleet strategy remains focused on the conventional oil tanker space, with no near-term plans to diversify into other shipping segments despite the company's substantial Liquidity position.

Conclusion

International Seaways delivered a record quarter across earnings, EBITDA, and free cash flow, translating current market strength directly into the largest dividend in the company's history while continuing to invest in fleet renewal at favorable pricing. The durability of current rate levels depends substantially on how Middle East shipping disruptions evolve, with management identifying two divergent paths, inventory replenishment that could extend elevated demand, or a prolonged disruption that eventually weighs on oil consumption and rates. With approximately $935 million in total liquidity, low Leverage near 6 percent net loan-to-value, and a fleet-wide cash breakeven below $14,500 per day, the company appears positioned to sustain its capital return commitments even if rates were to moderate from current levels.