Maybe the market just needed to know what scrubber-skeptical Euronav was going to do.
Since announcing their plans to satisfy with the IMO 2020 emissions regulations — including buying up the equivalent of 420,000 tonnes of compliant fuel — the Belgian tanker owner's New York-traded shares have jumped nearly 10% to $8.64 at the open Wednesday.
Shares had been as low as $6.90 in the last 52 weeks.
"We're just saying that instead of doing it in a speculative way, we'll do it in a very" deliberate way, chief executive Hugo de Stoop told TradeWinds at London International Shipping Week.
"I think we were right in many instances around the scrubber investment."
Euronav owns 65 tankers, most of which are of the VLCC variety, plus two FSOs acquired in a joint venture.
Its balance sheet gives it the most operating leverage when IMO 2020 kicks in and tanker rates are expected to shoot up, said Evercore ISI analyst Jonathan Chappell.
But despite the rally, Euronav is still trading at a discount to tanker rival Frontline, who opted for scrubbers on a significant portion of its fleet and whose shares were trading at $8.91 at the start of trading Wednesday.
"Are they getting penalized because they’re not going [with scrubbers]?" Chappell said.
“Why, on paper, is the best-positioned stock to own into this thesis, underperforming? You have to start to believe that [scrubbers] could be part of it.”
Euronav's opposition to scrubbers goes back to former chief executive Paddy Rodgers, who became one of the most outspoken voices questioning the technology.
He said he had trouble believing the length and depth of the fuel spread between low and high sulphur fuels would match capital outlays necessary to install scrubbers.
De Stoop appears less adamant about scrubbers, arguing the company can still get their benefits on some of its ships after the IMO 2020 regulations kick in and that the company might look at it.
“Paddy is extremely intelligent and incredibly well-spoken, but it’s like there was no other side to the argument," Chappell said. "It was full-on, we’re not doing it. I think it’s good to have options and be flexible.”
To TradeWinds, de Stoop denied there was any difference between how Rodgers thinks about scrubbers and how he does.
"I disagree that my predecessor had any different view on the scrubbers than we currently have," he said.
"The market always needs two camps. I think we were asking very serious and very relevant question about scrubbers in general."
