International Seaways Inc. and Diamond S Shipping Inc. announced a merger March 31 which will form one of the largest US-listed tanker companies, both companies said in a joint statement March 31, amid a difficult time for the sector.
The combined company will have a total of 100 tankers, making it the second largest US-Listed tanker company by vessel count and the third largest by tonnage, with a value of approximately $2 billion, according to the statement.
International Seaways and Diamond S shareholders will own approximately 55.75% and 44.25% of the combined company respectively.
"With our enhanced scale and capabilities combined with a best-in-class ESG track record, we are ideally positioned to meet the evolving needs of leading energy companies and capitalize on favorable long-term industry fundamentals," the statement said.
The announcement comes while times are still difficult for the tanker sector but with the promise of higher oil demand ahead.
The tanker market will only return to profitability when oil inventories normalize and oil demand returns to pre-coronavirus levels, which is only likely "at some point in the next 12 months," tanker operator Euronav said March 31.
"The market remains unbalanced with too many ships chasing too few cargoes," company CEO Hugo De Stoop said, adding, though, that there were some "encouraging signs."
S&P Global Platts Analytics sees this year's oil demand growth at some 5.8 million b/d. "For 2022, global oil demand will continue to recover before gradually switching to long-term growth toward the year end. Total demand is forecast be up by 3.5 million b/d, thus coming to above 2019 levels," Platts Analytics said.
Platts Analytics forecast year-end demand in 2022 of 102.3 million b/d.
