Q3 Vessel Rates Update
Scorpio Tankers Reports Q3 TCE Rates and Secures Long-Term Vessel Charters
Anonymous
Key Points
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Scorpio Tankers’ Q3 2026 update shows LR2 vessels achieved 1,249 expected revenue days with about 85% charter coverage, highlighting the scale of LR2 contribution in the quarter.
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The company notes that the published TCE rates and coverage figures are subject to change as pool results are finalized, signaling that current figures may be revised.
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Convertible financing details include the issuance of 1.75% Convertible Senior Notes due 2031 in April and May 2026, with potential dilution accounted for using the if-converted method.
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The update confirms Scorpio Tankers operates a global fleet of product tankers transporting refined petroleum products and emphasizes that revenue is tied to vessel rates, charter agreements, and broader shipping market conditions.
Scorpio Tankers locked in over $110 million in revenue with three-year charter deals for three product tankers in Q3 2026. Kalkine Media reports the company secured two LR2 vessels at $40,188 and $42,500 per day, plus one MR vessel at $23,900 per day, starting between September and Q4 2026.
The shipping company's larger vessels delivered strong earnings. Grafa shows LR2 tankers averaged $64,900 per day in Q3 2026 across 1,249 revenue days with 85% coverage, while smaller MR and Handymax vessels earned roughly $30,000 and $25,500 daily respectively.
Three-Year Deals Lock in Stable Income
Scorpio Tankers announced time charter-out agreements for three product tankers with terms running three years. Splash247 reports the deals carry over $110 million in aggregate gross revenue combined. The two LR2 vessels—STI Gladiator and STI Jermyn—begin service in September 2026, while the MR vessel STI Pontiac starts in Q4 2026.
Long-term charters reduce revenue volatility for tanker operators. The fixed rates lock in earnings regardless of spot market swings. Hellenic Shipping News notes these deals reflect Scorpio's strategy to balance pool and spot market participation with multi-year commitments.
LR2 Fleet Drives Q3 Performance
Scorpio's largest tankers generated the quarter's best returns. Grafa reports LR2 vessels achieved average daily rates of $64,900 across 1,249 expected revenue days. The fleet operated at 85% charter coverage, meaning roughly 6 of every 7 days generated full revenue.
The LR2 segment significantly outpaced smaller classes. TipRanks highlights strong pool and spot market earnings across the entire fleet, with MR tankers earning about $30,000 daily and Handymax vessels roughly $25,500 daily in the same quarter.
Share Dilution from Convertible Notes
Scorpio issued convertible debt in early 2026 that could dilute shareholder ownership. TipRanks reports the company expects fully diluted shares outstanding of 54.5 million to 55.5 million for Q3 2026. The dilution stems from 1.75% Convertible Senior Notes due 2031 issued in April and May 2026.
Convertible notes give investors an option to convert debt into stock. Scorpio accounts for this potential dilution using the if-converted method for financial reporting. The range reflects uncertainty about whether convertible holders will exercise conversion rights.
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