Teekay Tankers (NYSE:TNK) reported fourth-quarter results that management said were supported by one of the strongest fourth-quarter spot rate environments in more than a decade, while the company continued to reshape its fleet through purchases of newer ships and sales of older tonnage.
Quarterly and full-year results
On the call, President and CEO Kenneth Hvid said Teekay Tankers posted GAAP net income of $120 million, or $3.47 per share, for the fourth quarter. Adjusted net income was $97 million, or $2.80 per share.
Management characterized spot tanker rates in the quarter as the second-highest fourth-quarter level in the past 15 years. With “significant spot exposure and a low free cash flow breakeven,” the company generated approximately $112 million in free cash flow from operations during the quarter, Hvid said.
Balance sheet and capital return
Teekay Tankers ended the quarter with a cash position of $853 million and no debt, according to management. The cash balance excluded $99 million held in escrow at year-end related to vessel purchase payments.
The company declared a regular fixed dividend of $0.25 per share. Asked whether investors should expect another special dividend around the first quarter as they had in prior years, Hvid said the topic is typically discussed with the board at its March meeting, and that the company has historically announced any specials in connection with the May earnings release.
Fleet renewal activity and guidance items discussed
Management highlighted ongoing fleet renewal moves, including transactions announced in early 2026. Hvid said the company acquired three 2016-built Aframax vessels for $142 million in January and bareboat chartered them back to the seller on short-term contracts. Teekay Tankers expects to assume full commercial and technical management of those vessels in the second and third quarters of the year.
In addition, the company sold or agreed to sell two older Suezmax vessels for gross proceeds of $73 million. Hvid also said Teekay Tankers reached an agreement “this week” to sell its only VLCC for gross proceeds of $84.5 million, with delivery during the second quarter. The company expects to recognize total gains of approximately $45 million from these sales in the first and second quarters of 2026.
During Q&A, CFO Brody Speers provided modeling detail on the recently acquired Aframaxes. He said that until Teekay Tankers takes over full ownership/management, the income statement impact is limited to the bareboat charter revenue, with no operating expenses or depreciation and amortization associated during that period. Speers added the vessels will drydock in the first half of the year while still on bareboat charter, and the company will continue to receive the bareboat rate during drydocking.
Speers also discussed cost items, saying the company’s annual G&A for the year was about $46 million, and that going forward it should be “about that or maybe a little bit lower,” broadly consistent with the last few quarters. On depreciation and amortization, he said first-quarter D&A should be close to fourth-quarter levels, at roughly $21.5 million to $22 million.
Market conditions and sanctions-driven trade shifts
Management attributed the fourth-quarter strengthening in spot tanker rates to a mix of “fundamental drivers, geopolitical events, and seasonal factors.” Hvid said global seaborne oil trade volumes were near record highs, citing the unwinding of OPEC+ supply cuts and rising non-OPEC+ production, “particularly in the Americas.”
He also pointed to tighter sanctions against Russia, Iran, and Venezuela, which the company said has created trading inefficiencies that benefit ton-mile demand and push more volumes from the “dark fleet” to the compliant fleet.
Teekay Tankers said mid-size tanker rates were additionally supported by disruptions at the CPC terminal in the Black Sea in November 2025, which reduced crude exports for around two months and opened arbitrage for U.S. barrels to move to Europe. Poor European weather limited ballast returns across the Atlantic, contributing to strong rates for spot voyages and U.S. Gulf lightering, according to management.
Looking at the start of 2026, Hvid said spot tanker rates have strengthened further, with mid-size rates trending above the five-year high in February, as many of the supportive factors have remained in place.
The company also described shifting trade patterns tied to sanctions. Management said India’s imports of Russian crude averaged 1.6 million barrels per day in 2025 but had fallen to around 1.0 million barrels per day by January 2026, with replacement barrels sourced from the Middle East and Atlantic Basin “via the compliant fleet.” Hvid also referenced a reported trade deal between the U.S. and India that could involve further reductions in Indian purchases of Russian crude.
On Venezuela, management said U.S. actions have shifted flows toward compliant tankers. The company said flows of Venezuelan oil to China via the dark fleet averaged 550,000 barrels per day in 2025 but fell to zero after a U.S. naval blockade in December. The company said Venezuelan oil has since moved entirely on compliant ships, largely to the U.S. Gulf and Caribbean on Aframaxes, with some February cargoes to Europe on Suezmaxes and indications that Indian refiners have booked April cargoes using VLCCs. Management offered an example that an incremental 500,000 barrels per day shipped from Venezuela to the U.S. Gulf would create demand for approximately 20 Aframax vessels.
Early first-quarter spot fixtures and medium-term outlook
For the first quarter to date, Hvid said the company had secured spot rates of $79,800 per day for its VLCC, $56,900 per day for Suezmax, and $51,400 per day for Aframax/LR2, with about 78% of VLCC spot days booked and about 65% booked for the mid-size fleet.
On the medium-term outlook, management said global oil demand is projected to rise by 1.1 million barrels per day in 2026, with potential additional support from strategic stockpiling, particularly in China. The company cited estimates that China could add just under 1.0 million barrels per day to strategic reserves during 2026. Non-OPEC+ supply growth was projected at 1.3 million barrels per day in 2026, led by the Americas, which the company said should drive mid-size tanker demand growth.
On the supply side, management said tanker ordering has increased, especially for large crude tankers, pushing the order book to a ten-year high as a percentage of the fleet. Deliveries are expected to rise in 2026 and accelerate in 2027, though management said actual fleet growth will depend on removals through scrapping and movement between the compliant and dark fleets. Management also emphasized that the global tanker fleet is aging, with the average age the highest in more than 30 years, and argued that the order book extending into 2029 is offset by the number of compliant tankers reaching age 20 over the same period, though the timing of removals remains uncertain.
When asked about deploying Teekay Tankers’ cash balance, Hvid said the company expects to continue making “a couple of purchases throughout the year,” but that a major acquisition is difficult given current asset values. He described the likely approach as incremental deals, potentially selling older ships while buying more modern vessels.
About Teekay Tankers (NYSE:TNK)
Teekay Tankers Ltd is an oil tanker shipping company that owns and operates a fleet of modern crude oil and petroleum product tankers. Listed on the New York Stock Exchange under the ticker symbol TNK, the company provides seaborne transportation services for crude oil, refined petroleum products and petrochemicals. Its operations range across major global trade lanes, offering a mix of spot market voyages and time-charter contracts to a diverse customer base in the oil and energy sector.
The company’s fleet includes a mix of Medium Range (MR), Long Range (LR1 and LR2), Suezmax and Aframax tankers designed to meet various cargo specifications and port restrictions.
