International Seaways NYSE: INSW reported record first-quarter 2026 results and announced its largest quarterly combined dividend, citing strong tanker markets, vessel sales and a fortified balance sheet.
President and Chief Executive Officer Lois Zabrocky said net income for the quarter was a record $286 million, or $5.75 per diluted share. Excluding special items, adjusted net income was $194 million, or $3.90 per diluted share, while adjusted EBITDA totaled $244 million.
The tanker operator also declared a combined quarterly dividend of $4.55 per share, more than double the prior quarter’s record dividend of $2.15 per share. Zabrocky said the payout includes a new 85% payout ratio that investors “can expect from us going forward as a practice,” along with a discretionary amount tied to “the outstanding performance of the company and current market conditions.”
Zabrocky said International Seaways surpassed $1 billion in shareholder returns since 2020 in March and expects to reach $1.3 billion after the June dividend payment.
Vessel Sales and Balance Sheet Strength
The company sold seven vessels with an average age of 17 years for $216 million during the quarter as part of what Zabrocky described as ongoing fleet optimization. She said the transactions increase flexibility and that the company expects to continue redeploying capital in a disciplined manner, including reinvestment in its fleet.
International Seaways also continued to take delivery of LR1 newbuildings, with two delivered so far in 2026 and two more expected in the third quarter. Zabrocky said Tankers International, now wholly owned by International Seaways, continues to expand beyond its VLCC pool into Suezmaxes and has added a new pool participant.
The company also added another Suezmax time charter for three years at $40,000 per day. Zabrocky said management continues to monitor the time charter market with “a keen eye towards the longer-term rate environment.”
Chief Financial Officer Jeffrey Pribor said International Seaways ended the quarter with $918 million in total liquidity, including approximately $377 million in cash and $541 million of undrawn revolver capacity. Gross debt was $650 million at quarter-end, and net debt stood at about $225 million. Pribor said the company’s net loan-to-value ratio was below 7%, based on fleet values of nearly $4 billion compared with roughly $2 billion of vessels carried at cost on the balance sheet.
Cash Flow and Cost Guidance
Pribor said the company generated approximately $133 million of free cash flow in the quarter, based on adjusted EBITDA of $244 million, less debt service, drydock and capital expenditures, and working capital uses. Net proceeds from the seven vessel sales were $223 million, while the company spent $28 million on LR1 newbuilding installments, including financing proceeds and costs, and $5 million to acquire the remaining ownership stake in Tankers International.
The company paid $106 million in dividends in March, reflecting the $2.15 per share dividend declared for the prior period.
Pribor said general and administrative expenses were reduced by about $5 million in the first quarter due to a commercial settlement that reimbursed the company for legal expenses incurred over the previous two years. Looking ahead, he said projected G&A expenses increased by a few million dollars per quarter because of the consolidation of Tankers International into International Seaways’ financial statements. He also noted that related Tankers International commissions are expected to offset that increase as “other revenues.”
For the second quarter to date, Pribor said the company had booked a blended average spot time charter equivalent rate of more than $100,000 per day fleet-wide on about 45% of expected revenue days. The company’s expected spot cash breakeven for the next 12 months is about $14,900 per day.
Market Outlook Focuses on Hormuz Disruption
Zabrocky said tanker demand fundamentals remain solid, but she emphasized that the market has become highly volatile because of conflict affecting the Strait of Hormuz. She said roughly 15 million barrels per day of crude, or nearly 40% of seaborne volume, typically transits through the strait.
Some of the disruption has been offset by alternative flows, including increased Red Sea exports as Saudi barrels move west to Yanbu, inventory draws and the release of Russian barrels that had accumulated on the water. However, Zabrocky said those sources have not fully replaced volumes that typically move through the strait.
“In the near term, the market is benefiting as it works to adjust to this dislocation,” Zabrocky said. She added that if the strait remains closed for an extended period, it could have broader implications for global energy markets until a resolution is reached.
On vessel supply, Zabrocky said the tanker order book has risen to about 16% of the current fleet since the end of 2023. However, she said the number of removal candidates — vessels 18 years or older by the time the order book is delivered — is three times the size of ships entering the fleet over the next few years. She said those fundamentals support a continued upcycle and leave the company well positioned.
Management Discusses Chartering, Dark Fleet and Capital Allocation
During the question-and-answer session, Zabrocky said the company has had “great success” clearing out its oldest MR tankers, while noting that prompt vessel availability is valuable in the current market. Asked about locking in elevated spot rates through time charters, Chief Commercial Officer Derek Solon said International Seaways is interested in longer-term charters, but two- and three-year rates are meaningfully below current spot and one-year levels. He said the company prefers to remain more exposed to the spot market unless longer-term rates improve.
Asked about the so-called dark fleet, Zabrocky said the company continues to focus on the issue and believes temporary relief tied to Hormuz disruptions is “very temporary.” Solon said International Seaways has not seen increased utilization of dark fleet vessels, noting many are older and less efficient. He said increased sanctions pressure could reduce their competitive impact over time.
Solon also said the company’s lightering business is seeing improved activity in the second quarter after first-quarter volatility. He said International Seaways had already booked more lightering jobs for the second quarter by early May than it had for the entire first quarter.
On capital allocation, Pribor said the company has delevered as much as management currently wants and remains focused on fleet renewal and shareholder returns. He said International Seaways has a share repurchase program and may use it from time to time, but the company leaned toward the dividend in the latest quarter. He said management continues to evaluate growth opportunities, including potential vessel purchases or M&A, if they meet return criteria.
Zabrocky closed the call by saying the company’s focus over the past decade on scale, fleet modernization and debt reduction helped position it to declare the $4.55 per share dividend.
About International Seaways NYSE: INSW
International Seaways, Inc NYSE: INSW is an independent tanker company that provides seaborne transportation services to oil companies, commodity traders and national oil companies. The firm’s operations focus on the carriage of crude oil and refined petroleum products, offering both time charter and voyage charter arrangements. With a modern fleet of very large crude carriers (VLCCs), Suezmax and Aframax tankers, as well as medium range (MR) and Handy product tankers, International Seaways supports global energy supply chains across major trade routes.
Founded in 1997 as Diamond S Shipping, the company completed its initial public offering in the late 1990s and rebranded to International Seaways in September 2018.
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