In short: Still owned, as spot tanker rates head toward $1M/day. "IMPP, which we still own, Imperial Petroleum, which we think is really, really cheap, that could double. The only issue is that management is a little bit annoying, is not the most transparent." The driver: "tanker rates have gone from… 50,000 a day to over a million dollars a day… if you wanted to charter out a VLCC… today and you didn't have a contract… you would have to pay a million dollars a day… because some of these ships have to go all the way around Africa." In Q&A the whole group is reframed as a hedge — see STNG.
Imperial Petroleum is a small Greek-run company that owns oil and fuel tankers and rents them out. With Houthi forces blockading the southern Red Sea and the Strait of Hormuz largely shut, many tankers must sail all the way around Africa, which ties up ships for much longer. The price to hire a large tanker on the spot market has gone from about $50,000 a day to around $1 million.
Singh still owns the shares and thinks they could double, because a small shipowner earning rates like these piles up cash very quickly relative to its size. His one complaint is management, which he finds "not the most transparent." As with all the tanker names, he now treats it as insurance against a longer war rather than a pure bet on the company.
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In short: A held tanker position, restated on record freight. "Tanker rates hit an all-time high at 800k per day. We still own IMPP. We think the stock could be 50 to 100% up from here, even if tanker rates go down from these local peaks. Tanker rates were up 43% just in the last week." The driver is ton-miles, not barrels: the Houthis "blocking and targeting Saudi affiliated vessels, forcing mainstream non-shadow tankers to… bypass the Red Sea altogether via the Cape of Good Hope, which is why tanker rates are so high, 800,000 a day… because… they have to go all the way around Africa." (The deck page header: "Tanker Rates at All Time Highs 800k per Day and Oil Refining Capacity at All Time Lows — Still Own IMPP.")
Imperial Petroleum is a small company that owns oil and fuel tankers and rents them out. Its income depends on the daily rate charterers pay for a ship, and that rate is set by how much ship capacity is tied up at sea.
Right now a great deal is tied up. With the Strait of Hormuz largely closed and Houthi forces attacking Saudi-linked vessels in the Red Sea, many tankers are sailing all the way around Africa instead of through the Suez route. The same cargo takes far longer to deliver, so each ship is occupied for longer, and fewer are available. Rates jumped 43% in one week to a record of about $800,000 a day.
Singh still owns the stock and thinks it can rise 50-100% even if rates fall back from this peak — the point being that a small shipowner earning record rates can pile up cash very quickly relative to its size. The risk is the reverse: a reopening of the shipping lanes would bring rates down just as quickly.
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