Sanctions on Russia and violence in the Middle East have proven profitable for a shipping industry that thrives on disruption.
But for Nikolas Tsakos, peace and free trade should pay dividends.
The Tsakos Energy Navigation chief executive told analysts that shipping flourishes best with no sanctions, open seas and open borders.
“Now, if with the magic [wand] one day, we can put the world in peace, I think that will be even better for shipping,” the TEN boss said.
The executive, whose company owns tankers and LNG carriers, said peace in the Middle East and Ukraine would mean older, run-down ships would be scrapped instead of continuing to trade.
An end to the war between Russia and Ukraine would lead to reconstruction in the Black Sea.
Peace in the Middle East, where Hezbollah has just agreed to a ceasefire with Israel, would mean reconstruction there as well.
“A peaceful world is a much better world for shipping,” Tsakos said in a call to discuss quarterly earnings.
The call for world peace and free trade came in response to a question by Alliance Global Partners analyst Poe Fratt, who asked Tsakos for his expectations of the impact the recent US election and the potential for tighter sanctions.
But Tsakos said he would need to be US secretary of state — not a “poor Greek shipowner” — to answer that question.
He acknowledged that his company has benefited from the advantage of having 25% of the world tanker fleet in grey trades instead of undercutting first-class operators in mainstream lanes.
“Sanctions right now are working for the benefit of first-class companies in our peer group because … the average age of what they call the grey fleet is above or close to 20 years,” he said.
“So, we don’t want to have those ships again in the Med or in the Caribs or in the Far East undercutting good quality responsible shipping operators.”
And he said TEN will never put its seafarers at risk by transiting the Red Sea while the threat of a Houthi attack remains.
“That’s why we’re doing business with the top-tier clients,” Tsakos said. “I know other colleagues of ours … that actually charter ships to lesser concerns, are continuously pushed to cut corners, and try and put their seafarers in danger and cross the Red Sea.”
If sanctions by the incoming administration of US President-elect Donald Trump were successful in reducing exports from Iran, Tsakos said tankers serving that dark trade would not be able to re-enter the mainstream market — at least not without work to bring them back up to standards.
“I think those ships will take a very long time to be in a perfect state, and it won’t be worth it,” he said. “So, I think we will see increase of scrapping of all the tonnage.”
