DHT Q1 2025 Earnings Report

DHT EPS Results

• Actual EPS: $0.27
• Consensus EPS: $0.15
• Beat/Miss: Beat by +$0.12
• One Year Ago EPS: $0.29

DHT Revenue Results

• Actual Revenue: $79.34 million
• Expected Revenue: $84.00 million
• Beat/Miss: Missed by -$4.67 million
• YoY Revenue Growth: -25.40%

DHT Announcement Details

• Quarter: Q1 2025
• Date: 5/6/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, May 7, 2025
• Conference Call Time: 8:00AM ET

DHT (NYSE:DHT) (NYSE: DHT) is a maritime transportation company that owns and operates crude oil tankers. Its fleet is primarily composed of very large crude carriers (VLCCs), which transport crude oil in international seaborne trade.

The company provides tanker transportation services to energy companies, commodity traders and other customers through a combination of voyage charters, time charters and related commercial arrangements. Its vessels serve major global crude oil trade routes linking oil-producing regions with refineries and consuming markets.

DHT was established in 2005 and is headquartered in Hamilton, Bermuda, with operations and commercial activities supported through international offices. The company’s management is led by Chief Executive Officer Svein Moxnes Harfjeld. DHT has expanded its fleet over time through vessel acquisitions and fleet-management activities, while focusing on the ownership, operation and commercial management of crude oil tankers.

DHT Q1 2025 Earnings Call Transcript

Key Takeaways

• Q1 2025 financials: Revenues on a TCE basis were $79.3 million, adjusted EBITDA was $56.4 million, and net income was $44.1 million (or $24.3 million after a $19.8 million vessel sale gain).
• Robust balance sheet: Liquidity totaled $277 million (including $80.5 million cash), financial leverage stood at 16.9%, and net debt was $12.3 million per vessel.
• Recorded a $19.8 million gain on the sale of DHT Scandinavia and expects additional gains of $17.5 million and $15.5 million from the upcoming sales of DHT Lotus and DHT Peony.
• Entered a seven-year time charter for DST Appaloosa at $41,000/day plus an indexed profit-sharing structure, providing long-term earnings visibility and upside.
• Q2 2025 earnings coverage: 780 time charter days booked at $42,200/day and 72% of 1,245 spot days locked at $48,700/day, reflecting an improved rate profile.

Presentation

[Operator]

Thank you for standing by. Welcome to the Q1 2025 DHT Holdings Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Laila Halvorsen, CFO. Please go ahead.

[Laila Halvorsen, CFO at DHT Holdings]

Thank you. Good morning and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings' First Quarter 2025 Earnings Call. I am joined by DHT's President and CEO, Svein Moxnes Harfjeld. As usual, we will go through financials and some highlights before we open up for your questions. The link to the slide deck can be found on our website, dhtankers.com. Before we get started with today's call, I would like to make the following remarks. A replay of this conference call will be available on our website, dhtankers.com, until May 14th. In addition, our earnings press release will be available on our website and on the SEC EDGAR system as an exhibit to our Form 6K. As a reminder, on this conference call, we will discuss matters that are forward-looking in nature.

[Laila Halvorsen, CFO at DHT Holdings]

These forward-looking statements are based on our current expectations about future events, as detailed in our financial report. Actual results may differ materially from the expectations reflected in these forward-looking statements. We urge you to read our periodic reports available on our website and on the SEC EDGAR system, including the risk factors in these reports, for more information regarding risks that we face. As usual, we will start the presentation with some financial highlights. We are pleased to report on another quarter with a respectable performance for DHT. In the first quarter of 2025, we achieved revenues on TCE basis of $79.3 million and adjusted EBITDA of $56.4 million. Net income came in at $44.1 million, equal to $0.27 per share.

[Laila Halvorsen, CFO at DHT Holdings]

After adjusting for the $19.8 million gain on sale of vessel related to the sale of DHT Scandinavia, the company had a net profit for the quarter of $24.3 million, equal to $0.15 per share. Vessel operating expenses for the quarter were $17.8 million, and G&A for the quarter was $5.5 million. For the first quarter, the average TCE for the vessels in the spot market was $36,300 per day. The vessels on time charters made $42,700 per day, while the average combined TCE achieved for the quarter was $38,200 per day. DHT has a robust balance sheet with low leverage and significant liquidity. We have continued to strengthen our balance sheet, and the first quarter ended with total liquidity of $277 million, consisting of $80.5 million in cash and $196.2 million available under our two revolving credit facilities.

[Laila Halvorsen, CFO at DHT Holdings]

At quarter end, financial leverage was 16.9% based on market values for the ships, and net debt was $12.3 million per vessel, well below estimated residual ship values. On this slide, we present the cash flow highlights for the quarter. We started the quarter with $78 million in cash, and we generated $56 million in EBITDA. Ordinary debt repayment and cash interest amounted to $19 million, and $27 million was allocated to shareholders through a cash dividend. $25.8 million was used for our new building program. $42.5 million was net proceeds from the sale of DHT Scandinavia, while $32.4 million was prepaid under one of our revolving credit facilities and can be reborrowed in the future. Positive changes in working capital and other amounted to $8.4 million, and the quarter ended with $80.5 million in cash. With that, I will turn the call over to Svein.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

Thank you, Laila. We will here take you through some quarterly highlights. We sold our oldest ship, the DHT Scandinavia, built in 2006, for $43.4 million. She delivered in January, and we recorded a capital gain of $19.8 million during the quarter. She was debt-free, and the proceeds will be allocated to general corporate purposes, hereunder investments in vessels and/or share buybacks and/or prepayment of debt. We entered into two time charter contracts. Firstly, the DHT China, built 2007, hence one of our oldest ships, was fixed to a leading commodity trader for one year at $40,000 per day. The contract commenced in January. Secondly, we fixed the DHT Tiger, built 2017, to one of our largest customers, an oil major, for a year at $52,500 per day. This contract commenced at the end of March. On this slide, we will discuss capital allocation and dividends.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

As per our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividends, the dividend for the first quarter of 2025 is declared at $0.15 per share. This marks our 61st consecutive quarterly cash dividend. The shares will trade ex-dividend on May 21st, and the dividend will be paid on May 28th. In the graph to the left, we share our P&L and cash break-even levels for 2025. As you will see, the difference between the two is estimated at $7,200 per day for the year. This discretionary cash flow will remain in the company and be allocated to general corporate purposes, with the intention being to fund installments under our new building program. The graph on the right illustrates accumulated dividends since updating our capital allocation policy from the third quarter of 2022.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

The accumulated amount of dividend is $2.51 per share and reflects well during a period in which our share price has appreciated, and we made share buybacks totaling $32 million, equal to 2.3% of the company, in addition to the quarterly cash dividends. Here we update you on the bookings to date for the second quarter of 2025. We expect to have 780 time charter days covered for the second quarter at $42,200 per day, an improvement when compared to the prior quarter. This rate assumes profit sharing for the month of April and the base rate only for the months of May and June for the time charter contracts that have profit sharing feature. Given the current spot market, there is potential for additional profit sharing and upside to the time charter earnings for the two vessels once the quarter is done.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

We assume 1,245 spot days in the quarter, of which 72% have been booked at an average rate of $48,700 per day. A meaningful improvement when compared to the first quarter. The current market is strong, and we are constructive on the way forward. The spot P&L break-even for the second quarter is estimated to be $17,500 per day, a number you may use to estimate the net income contribution from our spot fleet for that quarter. We will now discuss updates to our fleet. As earlier announced and subsequently to the first quarter, we entered into a truly long-term time charter and an agreement to sell two older ships. The DHT Appaloosa, built 2018, has entered into a seven-year time charter with a global energy company, also commonly referred to as an oil major.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

The contract has a fixed base rate of $41,000 per day, plus an index-based profit sharing structure calculated on the vessel's specification. The vessel in question is an excellent ship and is expected to provide competitive earnings under the pre-agreed calculator for the profit sharing, and the index earnings in excess of $41,000 per day will be shared equally between the customer and DHT. We really like the deal, and it offers long-term visibility on base earnings, thereby protecting the downside whilst retaining upside to the market. We agreed to sell the DHT Lotus and DHT Peony for a combined price of $103 million. The vessels were built at Bohai Shipbuilding in 2011 and came into DHT through the BW Fleet acquisition in 2017. The vessels were acquired for a combined price of $115.8 million and have served us well during these eight years.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

The DHT Lotus was delivered to our new owners during April, and we expect to record a gain of $17.5 million in the second quarter. The DHT Peony is expected to deliver during July, and we project to record a gain of $15.5 million in the third quarter. The proceeds from the sales will be allocated to general corporate purposes, again hereunder investments in vessels and/or share buybacks and/or prepayment of debt. Here is our fleet employment overview. As per usual, we have a mix of spot and term charter contracts in our portfolio. There are currently a total of nine ships on time charter, of which three are coming off during this year, namely DHT Europe, DHT Lion, and DHT Harrier.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

The DHT Puma and the DHT Appaloosa, in green color, have profit sharing features built into the contracts, hence offering a combination of a certain level of earnings visibility without giving away all the upside in the strong markets. We have meaningful exposure to this rising freight market, both in the spot market and with potential re-rating of new time charter contracts. Further, we will, as you probably know, expand our fleet with four new and very competitive ships in the first half of 2026. These ships have gained a total of close to 800 additional earnings days in 2026 compared to when the contracts were entered into. Here we provide an update on a corporate transaction. Subsequent to the quarter, we have acquired the remaining outstanding shares in Goodwood Ship Management for a purchase price of $6.1 million. As a result, DHT now owns 100% of the company.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

This company is a very important pillar in DHT's business and strategy, undertaking the technical management of our ships, including recruitment, employment, and training of our seafarers. The company is now fully integrated into DHT, and we will continue to develop and build on its excellent safety and operational track record in support of our long-term strategy. Now, an update on our debt financing. We have entered into a $30 million secured reducing revolving facility with Nordea, being one of our relationship banks. The new loan will refinance the current facility for the DHT Jaguar, with its current outstanding debt of $25.5 million. The new loan is priced at 175 basis points above SOFR and is a DHT-style financing, including a six-year tenor and a 20-year repayment profile.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

We reiterate our view that the dynamics of our market is increasingly becoming a favorable supply story, with a rapidly aging fleet exceeding a benign order book for new ships and a string of sanctions making it increasingly challenging to trade ships in the shadow fleet. The graph updates the demographics of the VLCC fleet. Apologize for being repetitive, but we think it's important to reinforce the obvious, which is that the VLCC fleet is set to shrink at a time when demand for our services is growing. By the end of 2026, we estimate 441 VLCCs to be older than 15 years of age and 199 to be older than 20. Extraordinarily, we estimate 58 to become older than 25 years. All these numbers assume no scrapping, staggering numbers and in support of our markets and business.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

The order book for new VLCCs is benign, with about 11% of capacity on order. There will be five ships delivered for the remainder of 2025. Twenty-eight are scheduled for 2026, 48 in 2027, and 19 in 2028. Of the order book, about 20% are being constructed and built in Korea. OPEC has started to bring more of its oil to the markets, contributing to strengthening freight rates, evidenced through new highs for the year and higher lows. We believe OPEC's decision to, amongst others, be supported by the following: 1. Continued oil demand growth. 2. A temporarily moderating growth trajectory of Atlantic-based oil production, offering an opportunity for OPEC and Saudi Arabia, in particular, to regain some market share. Low crude oil inventories in China requiring refilling to support growth and new refining capacity coming on stream.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

Lastly, a certain sanctioned oil production being at risk with a possible need for replacement. Our markets have for the past two and a half years or so fared better than what most people think. In fact, DHT's average spot market earnings for this period were just shy of $50,000 per day, $49,300 per day to be precise. We think this is a very handsome number. With the favorable supply backdrop and the constructive oil markets for freight, we believe it is reasonable to expect rewarding times ahead, or in plain English, be bullish. We continue to focus on what we can control and delivering on what we believe is a resilient business approach and strategy. We receive encouragement from our key stakeholders, namely shareholders, customers, and lending banks.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

Irrespective of which constituency you belong to, you should expect us to focus on solid customer relations with safe and reliable services, a competitive cost structure with robust break-even levels, a solid balance sheet, and a clear capital allocation policy to create long-term shareholder value. We appreciate the encouragement. We will stick to our knitting, work hard, and operate with leading governance standards and a high level of integrity. With that, we open up for Q&A. Over to you, Operator.

[Operator]

Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Our first question comes from the line of Frode Mørkedal from Clarkson Securities. Please go ahead. Your line is open.

[Frode Mørkedal, Analyst at Clarkson Securities]

Thank you. Hi, Svein.

[Frode Mørkedal, Analyst at Clarkson Securities]

First off, I guess on the vessel sales, it sold to only Chinese-built ships. I guess that's not a coincidence, right? Maybe you can talk firstly about the decision to do that and how you're thinking about that Korean versus Chinese-built ships. That's the first question. Related to that, I guess you have a lot of cash coming in, $85 million after debt. You list the general corporate purposes and investments as first, share buybacks second, and prepayment of debt third. Is that coincident, or is that actually the priority as you see it now?

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

On the first, we felt it was an opportune time now to sort of fine-tune our fleet profile. This is also reflecting discussions with customers, what they would like to see from DHT and how they would like to see us positioned going forward.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

These two ships, as we say, have been with us for eight years. We bought them only some $10 million, $12 million, I believe, what we sold them for now. It's been a very, very good investment. In a way, it's also a good opportunity to take some profit off the table. That's really with that. On the chronology of the three items, apart from cash dividends, that is in no specific order. It depends on the time, the opportunities we can find in the market, and so forth. It is, of course, in general, our priority to invest in ships as opposed to invest in buying our own stock or invest further in the balance sheet, which is already super strong. It's not so easy to find opportunities. We are in this market all the time.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

If we are able to identify good investments, we have ample firepower to do that and can do that without issuing any additional capital in the company. Time will tell what we can actually deliver on. If you looked at our historical buybacks, you will note that they are at times when we feel there is a meaningful dislocation in the capital market when compared to asset values and the trajectory of the underlying business. I think in the current market, this is not an area where you should expect us to apply capital.

[Operator]

Okay. That's understood. Thank you.

[Operator]

Thank you. We'll now move on to our next question. Our next question comes from the line of Jon Chappell from Evercore ISI. Please go ahead. Your line is open.

[Jon Chappell, Analyst at Evercore ISI]

Thank you. Good afternoon. Svein, the Appaloosa contract really stands out given its duration, but also the structure.

[Jon Chappell, Analyst at Evercore ISI]

Base rate is higher than one of the one-year time charters you just did. Is this a complete one-off, or are you seeing more appetite for extended contracts and more appetite for profit share contracts, which seems to be kind of structure of the past as opposed to the present times?

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

We are very excited about this contract. We think it's sort of well-balanced, and it's an excellent counterparty. It's a meaningful customer of ours where we have the ambition to expand the relationship, if I can use that word. These contracts are far and few between. I do think it reflects a couple of things. One is that the customer are aligned with our view that the VLCC fleet is going into a period where it will be hard to find really good assets from top operators like DHT.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

They are concerned about securing, I think, quality tonnage from a quality operator. I should not speak for them, but this is sort of our impression. The fact that you say, I allude to the fact that we can do a base rate, which is quite healthy with the profit sharing, is also a reflection of the quality of this ship and the sort of commercial features, consumption, and size, and all of that. I think this probably also made good sense for the counterparty. If at all possible to develop more of these, I think we will entertain that. It is not a ready shelf of these contracts to just pull out, right? It is a lot of work. It took several months to put this to bed. Let's see.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

In general, DHT is open to similar sort of structures or contracts if we are able to develop them.

[Jon Chappell, Analyst at Evercore ISI]

Okay. That makes sense. Second, one more market-related. There has been a lot of optimism about OPEC's seeming shift in strategy. You mentioned it in your prepared remarks as well. Sometimes when OPEC announces an increase in production, it is not really on a one-for-one basis, just given there is some overproduction or certain members cannot produce to their quota. Based on what they have announced so far, do you have a rough estimate of how much of that you think will actually enter the market, the timing as such, and the equivalent amount of VLCCs that could be added from the last two meetings from OPEC?

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

I wish I could give you a precise answer, but it is a bit too early to tell.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

I think at the get-go, when the additional barrels came to the market, the sort of amounts were quite modest. And we believe that that was probably spread out on existing shipments, lifting a little bit more cargo on each keel, maybe, rather than having additional number of ships loading. So at the get-go, it was not maybe that visible. Now that the amounts are coming into the 400,000 sort of barrel plus, it is a very different game. And we think coming now from June onwards that we will see this more clearly in the market. There is, of course, some balancing against other OPEC members that have possibly overproduced. But I think the only people who truly know this is the insides of OPEC and maybe Saudi Arabia in particular. So we try to make the sense of it.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

What we do feel is that you see that there has been more cargo in the market. Exactly how many, we will have to look back month after month to see whether it really tells, right? There is probably some shift here also in the sense that there is maybe more VLCC cargos and less of some other sectors, although Suezmax and Afras in particular had some spikes as of late as well. I think we just trust a bit in the sentiment and how the customers are behaving. There is more oil in the market.

[Jon Chappell, Analyst at Evercore ISI]

Okay. Thank you, Svein.

[Operator]

Thank you. We'll now move on to our next question. Our next question comes from the line of Greg Lewis from BTIG LLC. Please go ahead. Your line is open.

[Greg Lewis, Analyst at BTIG LLC]

Yes. Thank you. Good afternoon, and thanks for taking my questions.

[Greg Lewis, Analyst at BTIG LLC]

I guess I was kind of curious. It's not really been impacting the crude market, but at least in the container ship market, we're starting to hear about vessel sailing cancellations. Just kind of curious, as we think about fuel spreads, as maybe not in tankers, but in some of these other sectors, start to see maybe pullbacks in demand. Any kind of view on what that could maybe do to fuel spreads?

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

When you say fuel spread, you mean between very low sulfur and heavy?

[Greg Lewis, Analyst at BTIG LLC]

Yes. Exactly. Yeah. The scrubber spread.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

Yeah. As of late, it's been hovering between, call it, 50 and 100. Probably it's been down below 50 at certain times as well. The spread is thinner compared to when all the sort of scrubber projects were coming on several years ago.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

I do think it's also related to whether people are buying heavy or fuel oil as a feedstock as opposed to crude oil. It is also a reflection of what the refiners are sort of tuning their stack to deliver. I'm not a refining expert, but I have a sense that if there's more demand for jet or sort of higher grades, then that sort of tends to widen the spread a bit. When that's not the case, and we've had sort of maybe to the surprise of many, but there's been more diesel demand than what people expected as of late as well. Maybe that has compressed part of this. I think it's a mix of these things without being able to give you a very sort of precise number.

[Greg Lewis, Analyst at BTIG LLC]

Okay. Great. My other one is a little macro-eto.

[Greg Lewis, Analyst at BTIG LLC]

It's interesting as you look at the oil curve for Brent. Forever, it's kind of been in backwardation. And then about 30 days ago, it started to move in contango. Not in 2026, but in 2028, and then really in the last week, you've now seen oil in contango a year out. Just as you think about what that can do to the tanker market, realizing that it's only been a couple of weeks since this has happened, any kind of thoughts on if we continue to see this contango curve hold, how that could impact demand for VLCCs, speed of vessels, maybe storage? Kind of just curious on your views on that, realizing that it's really only happened in the last couple of weeks.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

I think typically, if the contango widens or increases, it could drive some floating storage.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

It is just too narrow, and there is no sort of room for that activity to happen right now. If that trend becomes stronger and wider, you will see more activity of people, of course, storing oil. I should not sort of forecast that for a particular time frame, but that is the typical result.

[Greg Lewis, Analyst at BTIG LLC]

Okay. Thank you.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

Thank you.

[Operator]

Thank you. We will now move on to our next question. Our next question comes from the line of Omar Nokta from Jefferies. Please go ahead. Your line is open.

[Omar Nokta, Analyst at Jefferies]

Thank you. Hi, Svein. Good afternoon. A couple of kind of bigger picture questions also, just more on the macro or perhaps just the market on VLCCs. Obviously, OPEC bringing back volumes and to what extent remains to be seen, as you mentioned.

[Omar Nokta, Analyst at Jefferies]

You also talked a little bit about the potential for these OPEC barrels coming to market, perhaps in part because, say, the Atlantic Basin, there's been a bit of a void. Just wanted to ask, as you think about the market as a move here over the next several months, especially into the seasonally softer summer period, do you think the OPEC volumes coming in are strong enough to push this market higher and offset the potential Atlantic Basin decline?

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

Yeah. Based on sort of the plan that we read this in the cards, we think that could be the case. We will then potentially have a quite robust summer market, which is not a typical seasonal event. When I talk about Atlantic, of course, it's mainly US shale that sort of is still growing, but at a much smaller level.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

It's probably going to be a bit in steps because Brazil and Guyana is growing. And we also have quite a lot of new oil coming off the west coast of Canada. And almost half of that is going on VLCCs to the Far East. So there are still some non-OPEC growth around, but it's a little bit sort of it's not the same speed as you had in the U.S. now for a few years. I do think this created an additional argument for OPEC to say, "This is an opportunity for us to recoup some market share." I guess Saudi, in particular, they have invested in several large and modern refineries in the Far East. I would think it's in their interest also to ensure that they can deliver feedstock to these and not sort of have a competition with other suppliers. \

[Omar Nokta, Analyst at Jefferies]

Yeah. Yeah.

[Omar Nokta, Analyst at Jefferies]

Thanks, Svein. I guess part of the bullish thesis for VLCCs this year has been the sanctioning of so many ships and the tightening of that capacity, especially as it's been primarily due to moving Iranian barrels. How do you think this market kind of, how does this market shake out, for instance, if the U.S. and Iran reach a long-term agreement and Iran's volumes are maybe welcomed back into the open market? How do you think the VLCC market reacts to that?

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

That's a good question. We look at this sort of two, call it, broad scenarios. One is, as you alluded to, that there is an agreement in place with Iran and the U.S., and sanctions are lifted. That means that Iran can access the compliant market for freight, which is cheaper per barrel to transport than in the shadow or the sanctioned market.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

I think that those barrels will quite quickly then move on to the compliant fleet, as we've seen in prior periods when sanctions have been lifted. I think that is truly it's only positive for these. I think, strangely, if it's sort of the other way around, that there's no deal and there's maximum pressure being applied on Iran and Iranian production is being driven down to the floor, it means that somebody else will have to step in and supply that loss. That will very likely be the other Middle Eastern producers, maybe especially Saudi and UAE. I do think both of those scenarios are actually positive for the VLCC business. I think on sanctions in general, now Russian oil is being sold below the price cap.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

That means that they can access the market for ships without sort of wondering too much about sanctions. That is not the VLCC business. That is Aframax and Suezmax and much shorter hauls. That has a very limited impact, we would like to think, compared to the Iranian story.

[Omar Nokta, Analyst at Jefferies]

Okay. That is very clear. Thank you, Svein.

[Operator]

Thank you. There are no further questions at this time, so I will hand the call back to Svein for closing remarks.

[Svein Moxnes Harfjeld, President and CEO at DHT Holdings]

Thank you very much to all for listening in and following DHT. That is most appreciated. We are wishing you all a good day ahead.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.

Participants

Executives

• Laila Halvorsen, CFO
• Svein Moxnes Harfjeld, President and CEO

Analysts

• Frode Mørkedal, Analyst at Clarkson Securities
• Jon Chappell, Analyst at Evercore ISI
• Greg Lewis, Analyst at BTIG LLC
• Omar Nokta, Analyst at Jefferies