Frontline plc, one of the largest public operators of crude oil tankers in the world, announced its highest adjusted quarterly earnings in over 20 years on Friday. This surge in earnings was driven by disruptions in oi...
Frontline plc, one of the largest public operators of crude oil tankers in the world, announced its highest adjusted quarterly earnings in over 20 years on Friday. This surge in earnings was driven by disruptions in oil flows through the Strait of Hormuz, which caused tanker rates to spike and altered global crude trading patterns.
In the first quarter of 2026, the company reported a profit of $559.1 million, or $2.51 per share, on revenues of $714.2 million. The adjusted profit reached $344.9 million, marking the best quarterly adjusted result since the last quarter of 2004.
The company also declared a cash dividend of $1.55 per share for the quarter.
Frontline revealed that the average daily spot time charter equivalent (TCE) earnings were $103,500 per day for VLCCs, $72,400 for Suezmax tankers, and $50,700 for LR2/Aframax vessels during this quarter, more than doubling year-over-year for all major tanker classes.
These results come during significant disruptions in global oil shipping, particularly due to the near closure of the Strait of Hormuz amid the U.S.-Iran conflict. The disruption affected about one-fifth of global oil exports, but Frontline noted that this market shift actually increased tanker demand due to longer journeys, rerouted shipments, and overall inefficiencies.
“The first quarter of 2026 was marked by high volatility,” said Lars H. Barstad, CEO of Frontline Management AS.
“Tanker markets tend to do well in unstable conditions, and the closure of the Strait of Hormuz led to quick changes in trading patterns and owner behavior,” Barstad explained. He added that more ton-miles, longer trading routes, and increased inefficiencies helped maintain vessel usage and kept Frontline's earnings strong throughout the quarter.
The company noted that the favorable market conditions have carried over into the second quarter, with Frontline securing very high contracted rates. For the current second quarter, contracted TCEs are at $181,700 per day for VLCCs, $131,300 for Suezmax tankers, and $125,000 for LR2/Aframax vessels.
As of now, coverage for the quarter stands at 82% for VLCCs, 79% for Suezmaxes, and 68% for LR2/Aframax tankers.
Frontline also continued to update its fleet during the quarter. The company sold eight older first-generation ECO VLCCs from 2015 and 2016, realizing a gain of $210.9 million. In April, it agreed to sell its two oldest Suezmax tankers for a total of $140 million.
At the same time, the company increased its exposure to modern vessels, securing up to $737 million in financing for nine new ECO VLCCs equipped with scrubbers, which were purchased from affiliates of Hemen Holding Limited, Frontline’s largest shareholder.
Frontline also arranged up to $237.5 million in refinancing for three VLCCs and expanded its revolving credit capacity.
Furthermore, two newly delivered VLCC newbuildings are already on one-year time charters at $110,000 per day each, highlighting the ongoing strength in the tanker market, despite the volatility in global energy flows.
Management expressed optimism about the long-term outlook for tankers, citing rising global energy security concerns and a broader diversification in crude sourcing by major Asian importers.
The company’s estimated daily cash breakeven rates remain relatively low at about $24,300 per day for VLCCs and Suezmaxes, and $23,600 per day for LR2/Aframax vessels, which provides significant leverage to benefit from elevated spot market prices.