Teekay Tankers has no immediate plans to shift more of its LR2s back into clean product trades.

The US-listed shipowner currently has seven of nine LR2s carrying crude cargoes due to higher returns in that sector.

"We have seen a little bit more volatility in LR2 trades over the last, say, six months," chief executive Kevin Mackay told analysts on a conference call.

"And that prompted us a few months back to look at maybe changing over one or two into the product trade."

No positive development

Since then though the trade has not really picked up, Mackay said.

"I think LR2 rates on a round-trip basis aren't necessarily as good as some of our US Gulf returns on the crude side," he added.

"At the moment, we've got two ships that are trading clean primarily in the Far East. And I think for the time being that's about as far as we're going to go until we start seeing a bit more definitive green shoots in the product space."

There are still large oil inventories on the product side in Europe that are going to be a "bit of a drag" on tanker earnings, Mackay believes.

"Our view is the vast majority of our exposure will be in the crude space. And we are confident the fundamentals are lining up for that over the coming quarters," the CEO said.

Promising much but not delivering

Teekay Tankers has 49% of spot revenue days booked for LR2s in the second quarter at an average of $11,900 per day.

Jefferies analyst Randy Giveans asked the CEO if he believed that jet fuel demand would rise before crude demand.

Mackay responded that product traders had always promised a lot and never necessarily delivered it as and when people thought it was going to happen.

"So we do have exposure — we can increase it from two ships to nine. But at this point in time we're not seeing that and as a result we're trying to make as much money in this bad market as we can. And today for us that is trading our ships dirty."

Mackay was also asked if the company had any appetite for fixing its vessels on charters ranging from six months to a year, to stabilise cash flow in an uncertain period.

Pulling the trigger?

"We look at it opportunistically," Mackay answered.

"It's finding the right customer, the right shipping in the right position, to be able to pull the trigger at the right numbers."

The CEO explained that the company had not seen this magic combination so far.

He said the owner had a "nice" transaction earlier in the year where it was able to bring in a ship on charter.

But as far as chartering out goes, Teekay Tankers has not seen evidence of the numbers it needs to lock vessels in for 12 months.

"There may be some opportunities within the regional fleets to put out for six months, but it's not something we try and plan to do," he added.