Scorpio Tankers (NYSE: STNG) filed its first quarter results on May 5, 2026. The headline numbers were strong. Net income of 216.3 million dollars. Adjusted earnings of 3.20 dollars per basic share. A 0.45 dollar quarterly dividend, and a fresh 500 million dollar buyback replenishment.
But the headline numbers are not the story.
The story is one line, near the top of the filing, that most readers will scroll past. Scorpio’s LR2 pool is booked at 96,000 dollars per day so far for the second quarter of 2026. LR2 is the Long Range 2 product tanker, the workhorse of the clean naphtha and gasoil trades.
In the first quarter, the same LR2 pool earned 50,830 dollars per day. That is an 89 percent jump in average daily Time Charter Equivalent. Time Charter Equivalent, or TCE, is the standard shipping metric for daily voyage profit after fuel and port costs.
For anyone holding shipping equities for product tanker exposure, this is the number that resets the second quarter setup. Names in scope include STNG, Ardmore Shipping (NYSE: ASC), Teekay Tankers (NYSE: TNK), and International Seaways (NYSE: INSW).
1. What STNG printed
Scorpio operates three vessel classes. LR2, Medium Range, and Handymax. Medium Range, or MR, is the standard 50,000 deadweight ton clean tanker that carries refined products on most regional routes.
In the first quarter of 2026, the company posted these pool TCE numbers. LR2 came in at 50,830 dollars per day. MR came in at 33,633 dollars per day. Handymax came in at 35,740 dollars per day.
Those were already strong numbers compared with most of 2025.
Then comes the second quarter forward book. For the quarter that started in April, Scorpio reports that 41 percent of its LR2 days are already fixed at an average of 96,000 dollars per day. 53 percent of MR days are fixed at 66,000 dollars per day. 47 percent of Handymax days are fixed at 61,000 dollars per day.
Walk that math forward. LR2 daily TCE is up 89 percent. MR daily TCE is up 96 percent. Handymax daily TCE is up 71 percent.
These are not modest improvements. They are step changes in the run rate.
The first quarter was a good quarter. The second quarter, on the numbers Scorpio has already booked, is a different category of quarter.
2. Why this number is the read for the whole product tanker pocket
Scorpio is the cleanest pure play product tanker on US exchanges. The LR2 pool that prints 96,000 dollars per day is not a Scorpio only pool. It is part of the broader spot market that every other product tanker name fishes from.
That has direct implications for three peer names.
Ardmore Shipping. Ardmore runs a younger, focused MR fleet. If Scorpio’s MR pool is booked at 66,000 dollars per day for the second quarter, Ardmore’s MR exposure should track in the same band, give or take fleet age and route mix. The market consensus on Ardmore’s second quarter number was set when the spot tape was running well below where it sits now. Estimates may need to move up.
Teekay Tankers. Teekay runs a mixed fleet of crude and product tankers. Its product side is largely Aframax LR2 and Suezmax LR3 equivalent units. The LR2 print at 96,000 dollars per day is a direct read through. Teekay has been a dividend story for crude tanker investors since 2024. The product side has been the quieter contributor. Not this quarter.
International Seaways. Seaways straddles crude and clean product tankers. Its LR1 and MR exposure is meaningful. Its second quarter setup looks better today than it did at the end of March.
The summer demand setup matters. Refined product flows from the Middle East and the US Gulf into Europe and Asia have been running tight all spring. Scorpio’s Q2 booking confirms that tightness translated into spot rates that the market did not believe could hold.
If you bought product tanker exposure for any reason, Scorpio’s Q2 LR2 number is the receipt.
3. Three things buried in the filing that rewire the May and June setup
There are three details in the May 5 filing that go beyond the TCE table and that change how to think about the next two months.
The first is fleet rotation. Scorpio is selling six LR2 product tankers this quarter. Three of them, the STI Park, STI Sloane, and STI Madison, are 2014 builds, going for 195 million dollars combined. Three more, the STI Solidarity, STI Goal, and STI Gallantry, plus STI Kingsway, were sold for between 52 and 61 million dollars each. Scorpio is taking a 65.9 million dollar gain on vessel sales in the quarter and recycling capital into newbuilds and buybacks. The fleet is getting younger. The balance sheet is getting cleaner.
The second is the long time charter book. Scorpio took out two long time charters in March. STI Lombard at 33,000 dollars per day for five years. STI Rambla at 30,500 dollars per day for eight years. These numbers tell you what the time charter market is willing to pay for multi year coverage right now. They are below the 96,000 dollar spot prints. That is normal. Time charters lock in floor revenue at a discount to spot and trade upside for visibility. The fact that Scorpio is locking in eight year cover at over 30,000 dollars per day says the long term curve is firm.
The third is capital return. The 375 million dollar convertible note issued in April carries a 1.75 percent coupon with a 2031 maturity. That is cheap money. Scorpio used a chunk of the proceeds to buy back 1,344,809 shares at 74.36 dollars per share. The buyback at that price tells you what management thinks fair value looks like with these forward TCE numbers. The convertible plus the replenished 500 million dollar buyback plus the 0.45 dollar quarterly dividend together signal a capital return story that is accelerating, not winding down.
4. The risk side
Two real risks sit against this setup.
The first is that the second quarter book is only partial. Scorpio has 41 percent of its LR2 days fixed at 96,000 dollars per day. That leaves 59 percent of the days still open. If spot weakens through May and June, the blended quarter print will come in below the 96,000 number. The market is looking at the headline rate. The math will look at the blend.
The second is that product tanker rate cycles can roll over fast. The 2022 to 2023 product cycle was driven by the diesel and gasoil dislocation that followed the European response to the Russia oil invasion. The current cycle is driven by tight refining margins, refinery turnarounds in Asia, and a structural shortage of LR2 tonnage relative to clean trade volumes. None of those drivers is permanent. A demand shock in China or a refinery normalization in the second half of 2026 could compress the curve fast.
The takeaway is that the Q2 print is a strong signal but not a multi year lock.
5. The bottom line
Scorpio Tankers gave the product tanker pocket a number on May 5 that the market did not have on May 4. LR2 at 96,000 dollars per day for the second quarter to date is a step change. The read through to MR rates, to ASC, TNK, and INSW second quarter consensus, and to the broader product tanker setup heading into the summer, is direct.
Capital is moving too. Scorpio is rotating older LR2s out for cash. Buying back stock at 74.36 dollars per share. Issuing a cheap convertible. Paying a 0.45 dollar quarterly dividend.
Hold the question this way. If LR2 spot books at 96,000 dollars per day for the second quarter and the market is still trading product tankers at a multiple that prices a normal cycle, where does the next leg come from?
It comes from the quarterly report on August 5, when the second quarter prints in full. Watch the blended LR2 number against the 96,000 dollar booked rate. Watch what the third quarter forward book opens at. And watch whether MR rates hold the 66,000 dollar level into June.
Until then, Scorpio handed the market the receipt.
Editorial take: Bullish on the product tanker pocket through the second quarter print on August 5. Primary watch: STNG. Read through coverage on ASC, TNK, INSW.