Frontline Ltd. (FRO): PESTLE Analysis [Nov-2025 Updated]

You're looking at Frontline Ltd. (FRO), and to be fair, analyzing a pure-play tanker giant means you're really analyzing the world's external forces-politics and economics drive everything. Geopolitical conflicts, like the ongoing Red Sea issues, are defintely increasing voyage lengths and boosting effective fleet utilization, which points to massive operating cash flow potential, but you can't ignore the rising operational expenditure (OpEx) from the new EU Emissions Trading System (ETS) inclusion and the high cost of capital. This PESTLE analysis maps the near-term risks and the clear path to significant returns, showing why the next few quarters are so critical for the company.

Frontline Ltd. (FRO) - PESTLE Analysis: Political factors

Geopolitical conflicts (e.g., Red Sea) increase voyage lengths and boost effective fleet utilization.

The primary political factor boosting the tanker market in 2025 is the persistent instability in key maritime chokepoints, most notably the Red Sea. The ongoing Houthi attacks have forced a significant portion of the global fleet to reroute around the Cape of Good Hope.

For a company like Frontline, which operates Very Large Crude Carriers (VLCCs), this rerouting is a clear positive for the supply-demand balance. Here's the quick math: a typical Asia-to-Europe voyage now adds an estimated 10 to 15 days of transit time. This effectively removes vessel capacity from the global fleet, a phenomenon known as boosting 'effective fleet utilization.' The Suez Canal saw transits plummet by as much as 49% in early 2025, confirming the scale of the diversion. This is why our VLCC Time Charter Equivalent (TCE) earnings remained strong, hitting $34,300 per day in the third quarter of 2025, despite broader market volatility. Longer voyages mean more demand for the same amount of oil moved. It's that simple.

US and EU sanctions on oil-producing nations create a high-rate, 'shadow fleet' market segment.

Sanctions against nations like Russia, Iran, and Venezuela have created a dual-market structure: a compliant, high-standard fleet (like Frontline's) and a non-compliant 'shadow fleet' (or 'dark fleet'). This shadow fleet, comprised mostly of older vessels, is estimated to account for approximately 17% to 23% of the world's largest tanker segments (VLCC, Suezmax, and Aframax/LR2) in 2025. Honestly, that's a massive chunk of capacity taken out of the legitimate market.

The existence of this shadow fleet is a near-term benefit for compliant operators. These vessels operate under opaque conditions, primarily moving sanctioned crude to Asia, which forces the legitimate fleet to cover the remaining global trade. The isolation of this fleet creates market inefficiency, extending voyage distances for the compliant fleet, which directly supports higher freight rates. Stricter enforcement of sanctions, like the US targeting of over 180 vessels and scores of traders in January 2025, further tightens the available supply for the mainstream market, driving up rates for Frontline's modern vessels.

Shifting trade alliances and oil supply routes directly impact Very Large Crude Carrier (VLCC) demand.

Geopolitical shifts have fundamentally altered the global oil map, creating a structural increase in ton-mile demand (the volume of cargo multiplied by the distance it is carried). The European Union's ban on Russian crude imports has forced Europe to source oil from longer-haul routes, particularly from the Middle East, the US, and Latin America. This is a boon for VLCCs, which are best suited for these long-distance hauls.

The shift means a VLCC carrying oil from the US Gulf Coast to Europe is now a more common route than the shorter, traditional intra-European or Russian routes. This is a structural change, not a temporary blip. The following table illustrates how these political decisions are translating into tangible market dynamics for Frontline's primary assets:

Government-mandated strategic petroleum reserve (SPR) restocking drives short-term charter demand.

The US government's effort to replenish the Strategic Petroleum Reserve (SPR) following the historic 2022 drawdowns provides a baseline level of demand support. As of October 2025, the SPR inventory stood at approximately 407.74 million barrels, well below its maximum capacity of about 714 million barrels. The Department of Energy (DOE) is committed to repurchasing oil, having bought back 59 million barrels between 2023 and October 2025.

While the DOE's stated pace of acquisition is slow-around 3 million barrels per month to avoid spiking oil prices-it still represents consistent, government-backed demand for domestic crude. This restocking activity, plus the cancellation of mandated sales of 140 million barrels through 2027, adds stability to the domestic crude market. This is defintely a tailwind, even if the immediate impact on Frontline's short-term charter demand is gradual rather than explosive.

• SPR inventory: 407.74 million barrels (Oct 2025).
• Maximum capacity: 714 million barrels.
• Repurchase pace: Approximately 3 million barrels per month.
• Action: Finance: Monitor DOE's monthly SPR tender volumes for potential short-term charter opportunities.

Frontline Ltd. (FRO) - PESTLE Analysis: Economic factors

Global oil demand growth projections remain strong, supporting long-term tanker utilization.

The core economic driver for Frontline Ltd. is the volume and distance of seaborne crude oil trade. For 2025, the global oil demand outlook is resilient, though tempered by macroeconomic headwinds. The International Energy Agency (IEA) forecasts world oil demand to increase by approximately 700 thousand barrels per day (kb/d) in 2025. This growth is largely driven by emerging economies, particularly in the Asia Pacific region, which is expected to see the fastest increase in consumption.

This demand growth, coupled with shifting global oil production, creates a favorable 'ton-mile' environment for Frontline's Very Large Crude Carriers (VLCCs). Production growth is concentrated in long-haul export regions like the US, Brazil, and Guyana, while demand growth is highest in Asia, especially India and China. This longer transit distance for crude oil effectively tightens the available vessel supply, even if the absolute volume growth is modest.

Here's the quick math on the demand side:

• Global oil consumption averaged 104.8 million barrels per day in Q3 2025.
• Asia and Oceania accounted for a 0.6 mbpd increase in consumption year-on-year in Q3 2025.

High inflation and interest rates increase the cost of capital for new vessel orders, limiting fleet growth.

The current high-interest-rate environment, a central bank tool to combat inflation, has a clear, beneficial side effect for existing fleet owners like Frontline: it acts as a powerful brake on new vessel construction. High newbuild prices-coupled with the high cost of capital (borrowing money)-have made new tanker orders uneconomical for many competitors.

Tanker ordering activity has contracted sharply in 2025, with a 61% year-on-year decline in tonnage ordered between January and August. This low ordering activity is crucial because it limits the future supply of compliant vessels, keeping the market tight for the next few years. What this estimate hides is the aging fleet; about 17.4% of the VLCC fleet and 20.3% of the Suezmax fleet are over 20 years old, creating a structural supply squeeze that favors Frontline's modern fleet.

Strong freight rates (Time Charter Equivalent, or TCE) are expected to generate significant operating cash flow.

The supply-demand imbalance, driven by limited fleet growth and increased ton-mile demand, is translating directly into strong Time Charter Equivalent (TCE) rates. These high rates are the primary engine for Frontline's operating cash flow. The company's financial results for 2025 demonstrate this strength.

Frontline's management anticipates sustained strength in the tanker market, projecting potential cash generation of $1.8 billion at current fleet and TCE rates. The company's fleet average cash breakeven rate for the next 12 months is estimated at about $24,700 per day, including dry-dock costs. A one-liner: The TCE rates are running well ahead of the cost to operate the ships.

A weak global economic outlook could temper oil consumption, reducing long-haul tanker demand.

While the near-term market is strong, the biggest risk is a global economic slowdown. Slower economic expansion and high trade policy uncertainty have already led the IEA to trim its oil-demand growth forecasts for 2025. Honsetly, if global Gross Domestic Product (GDP) growth falters more than expected, oil consumption will be reduced, directly impacting the demand for long-haul tanker services.

The key risk factors to watch:

• Slower economic expansion has already trimmed the IEA's 2025 oil demand forecast to 0.7 mbpd from an earlier 1.1 mbpd projection.
• Oil supply is expected to outpace demand by close to 1 mbpd in 2025 and 2026, which could pressure oil prices.
• China's oil demand expectations were revised downwards by 1.4 mbpd in their 2030 outlook, due to lower projected GDP growth and faster vehicle decarbonization, which is a long-term signal of a demand ceiling.

Still, the current geopolitical environment, which forces longer trade routes, mitigates some of this demand risk by boosting ton-mile demand, but a deep global recession would defintely test the market's resilience.

Frontline Ltd. (FRO) - PESTLE Analysis: Social factors

You're operating in a capital-intensive industry, so social factors like crew welfare and supply chain ethics aren't just feel-good initiatives; they are hard-dollar risks and opportunities that directly affect your OpEx and your access to capital. For Frontline Ltd., the pressure from investors and the reality of the global seafarer shortage are forcing a costly but necessary pivot toward a more human-centric operating model.

Public pressure for ethical sourcing and transparent supply chains impacts charterer selection.

Public and commercial scrutiny on the tanker industry's supply chain is intensifying, moving beyond simple compliance to demand full transparency. Major charterers-your customers-are now using ethical and social metrics to select vessels, preferring partners like Frontline that demonstrate a clear commitment to human rights due diligence (the process of identifying and mitigating human rights risks). This is a competitive advantage for your modern fleet.

Frontline addresses this with a formal Supply Chain Partner Conduct Policy, which mandates that all partners uphold the highest standards of integrity and governance. To be fair, this is a cost of doing business now, but it also helps you avoid the high-risk, low-transparency 'dark fleet' trade, which is facing increased scrutiny and insurance costs. Your focus on respecting human rights and decent working conditions throughout the supply chain, as confirmed in your 2025 annual assessment, is what keeps you in the compliant, high-value market. It's a filter for quality business.

Attracting and retaining skilled seafarers becomes harder due to demanding work conditions and competition.

The global shortage of skilled officers is a critical financial risk for the entire tanker sector, and it's only getting worse. The International Chamber of Shipping (ICS) expects a shortfall of approximately 90,000 trained seafarers by 2026. For Frontline, this means higher crew wages, increased training costs, and a constant battle for talent, especially for management-level deck officers and technical staff who can handle modern, complex vessels.

The job is harder now, too, with geopolitical instability, like the Red Sea attacks, making the profession less appealing. This shortage directly impacts your operational stability; a single delay due to a crewing issue can cost tens of thousands of dollars in lost charter revenue. Frontline's fleet, which includes 41 Very Large Crude Carriers (VLCCs), 21 Suezmax tankers, and 18 LR2 tankers, requires a stable pool of highly certified personnel. You can't run a modern, high-tech fleet with a skeleton crew.

Here's the quick math on the industry-wide officer shortage:

Increased focus on crew well-being and safety standards affects operational expenditure (OpEx).

The cost of crew well-being and safety is now a significant, non-negotiable component of your OpEx (Operational Expenditure). Frontline's commitment to a 'Safety first - no compromises' motto is backed by real spending. This focus is necessary to mitigate the financial and reputational damage of incidents, plus it's a key factor in attracting and retaining those scarce skilled seafarers.

In the third quarter of 2025, Frontline's ship operating expenses increased by $3.1 million from the previous quarter, partly due to a $1.1 million cost associated with changing ship management for seven LR2 tankers. This shows that crew and management costs are fluid and directly tied to operational decisions. Your average OpEx (excluding dry dock) for the fleet in Q3 2025 was around $8,500 per day, with specific OpEx for a VLCC at $9,000 per day (including dry dock). Any increase in crew-related costs, such as better connectivity, food, or training, will push this daily OpEx higher, directly impacting your cash break-even rate.

Frontline's safety performance is a positive counterpoint, having maintained a lost time incident rate of less than 0.46 for three consecutive years, which saves on insurance premiums and operational downtime.

Growing investor demand for Environmental, Social, and Governance (ESG) reporting influences capital access.

Institutional investors, including those running massive funds, are increasingly using ESG performance as a primary filter for capital allocation, not just a secondary one. For a company like Frontline, a strong Social score in your ESG reporting directly influences your cost of debt and equity capital-it's a financial lever. This is defintely not a niche issue anymore.

Frontline's modern fleet, with an average age of 6.6 years as of December 31, 2024, and 91% of vessels being ECO-type, positions you well to meet the E (Environmental) demands, but the S (Social) is equally crucial for investors. Your commitment to transparent reporting, following the SASB Marine Transportation Standard (2023) and GRI Standards, is explicitly designed to satisfy this investor demand. This transparency and performance helped Frontline successfully refinance debt in 2025, including converting existing credit facilities into revolving reducing credit facilities of up to $493.4 million in September 2025. This move, which reduced your fleet average cash break-even rates by approximately $1,300 per day for the next 12 months, shows a direct link between a modern, ESG-aligned fleet and favorable capital terms.

• Mitigate financing risk: High ESG scores lower borrowing costs.
• Attract institutional capital: Your goal is to be the 'natural choice' for large institutional investors.
• Support fleet modernization: ESG performance justifies the capital expenditure for new, efficient vessels.

Frontline Ltd. (FRO) - PESTLE Analysis: Technological factors

Adoption of Dual-Fuel Engines (e.g., LNG or Methanol)

The push for decarbonization is making the adoption of alternative fuel technologies a critical, and expensive, factor for Frontline. To meet future International Maritime Organization (IMO) emissions standards, you simply must invest in next-generation propulsion. Frontline is already positioned well with a fleet that is 100% eco vessels, but the real capital expenditure (CAPEX) is in the future-proofing.

The company's strategic move in acquiring six multi-fuel ready VLCC newbuilding contracts for an aggregate purchase price of $565.8 million highlights this commitment. This includes an estimated $25.7 million dedicated to specific additions and upgrades to the standard specifications, essentially buying optionality for a fuel transition to Liquefied Natural Gas (LNG) or Ammonia later on. This is smart, because new dual-fuel LNG propulsion still represents the majority of alternative fuel capacity ordered in 2025, accounting for 60% of new orders in the first ten months of the year, even as the industry debates the long-term viability of different fuels like methanol.

Here is the quick math on the current fleet's readiness:

• Total Fleet: 80 vessels (as of Q3 2025)
• Eco-Vessels: 100% of the fleet
• Scrubber-Fitted: 55% of the fleet
• Multi-Fuel Ready Newbuilds: 6 VLCCs (acquired for $565.8 million)

Slow Steaming and CII: Operational Compliance

Slow steaming is the primary operational measure used right now to comply with the IMO's Carbon Intensity Indicator (CII) regulations. This is a short-term technology fix-slowing down to save fuel-but it's crucial for maintaining a competitive CII rating, which is required to improve by approximately two percent annually until 2026. Failing to get a good rating, like a 'D' three years in a row, means a corrective action plan and potential commercial disadvantage.

The technology here is simple physics, but the financial impact is significant. Case studies show that reducing the main engine load from 75% to 38% can result in 31.5% less CO2 emissions. For Frontline, with its large, efficient fleet operating on high-earning spot Time Charter Equivalent (TCE) rates-like the Q2 2025 average of $43,100 per day for VLCCs-the trade-off is lost speed for compliance and massive fuel savings. It's a balancing act: speed reduction of around 2 knots is the estimated requirement for some ships to maintain a minimum 'C' rating through 2030, which impacts voyage days but preserves the vessel's long-term commercial value.

Digital Fleet Optimization: The $13.69 Billion Opportunity

Digitalization of fleet operations, encompassing everything from advanced route optimization to predictive maintenance, is no longer a nice-to-have; it's a competitive necessity. The global marine fuel optimization market is projected to reach $13.69 billion in 2025, growing at a Compound Annual Growth Rate (CAGR) of 14.0%. This is where the real-time money is saved.

While Frontline doesn't publish its exact investment figures, a company with Q3 2025 revenues of $432.7 million must be heavily invested in these platforms. You're using AI-driven systems to analyze weather, currents, and engine performance to shave off fuel consumption on every voyage. Predictive maintenance, another key digital trend, uses Internet of Things (IoT) sensors to monitor machinery health, reducing costly, unscheduled downtime. The goal is to move beyond simple route planning to dynamic orchestration, ensuring that the fleet's 100% eco vessels are operating at peak efficiency to maximize TCE earnings.

Cyber-Security Threats to Navigation and Cargo Systems

The increasing digitalization of the fleet creates a massive vulnerability that requires defintely higher investment. As Frontline integrates more sophisticated Operational Technology (OT) systems-for navigation, engine control, and cargo management-the attack surface expands. The global maritime cybersecurity market is valued at approximately $3.5 billion in 2025, reflecting the severity of the threat.

A successful cyber-attack could cripple a vessel's navigation system or compromise sensitive cargo data, leading to catastrophic financial and reputational damage. Network security alone is expected to account for 33.2% of the total maritime cybersecurity market in 2025. Frontline's investment here is a non-negotiable insurance policy. It protects not just the physical assets, but the ability to maintain compliant, uninterrupted operations that support the company's consistent revenue stream.

Frontline Ltd. (FRO) - PESTLE Analysis: Legal factors

You're operating in the most regulated sector of global trade, so legal compliance isn't just a cost center; it's a critical operational differentiator. For Frontline Ltd., the legal landscape in 2025 is defined by two major, costly environmental regulations and the constant, high-stakes navigation of international trade sanctions. Honestly, one misstep on sanctions could wipe out a quarter's profit.

Enforcement of the International Maritime Organization (IMO) 2020 low-sulfur fuel regulation is strict

The IMO 2020 rule, which caps marine fuel sulfur content globally at 0.50% (mass by mass), is now a mature, strictly-enforced standard. Port State Control inspections are rigorous, and the ban on carrying non-compliant fuel oil (unless a scrubber is fitted) makes enforcement much simpler. The compliance cost is baked in, but the risk of non-compliance is growing, especially as Emission Control Areas (ECAs) expand.

A key change in 2025 is the Mediterranean Sea's designation as a Sulphur Oxides (SOx) ECA, effective May 1, 2025. This mandates a much stricter fuel limit of 0.1% sulfur content in that region, ten times lower than the global cap. For Frontline Ltd., with a fleet of 41 VLCCs, 21 Suezmax tankers, and 18 LR2 tankers, the decision to invest in scrubbers is paying off. About 56% of the company's ECO vessels are scrubber-fitted as of September 30, 2025, allowing them to continue using cheaper, high-sulfur fuel outside of ECAs while remaining compliant.

New EU Emissions Trading System (ETS) inclusion for shipping increases operating costs per voyage

The European Union Emissions Trading System (EU ETS) is the biggest near-term financial challenge, acting like a carbon tax on voyages touching EU ports. In 2025, the mandatory surrender rate for EU Allowances (EUAs) jumps to cover 70% of verified greenhouse gas (GHG) emissions, up from 40% in 2024. This increase is a significant step toward the 100% compliance required in 2026. Non-compliance penalties are severe, estimated at over €130 per tonne CO₂ missing, plus the risk of ship detention.

Here's the quick math: EUA prices have been volatile, peaking at €130 per ton in early 2025, and hovering around the €60-70/tCO₂ range as of August 2025. This cost is passed on to the charterer by law, but it still impacts the overall cost-competitiveness of Frontline Ltd.'s vessels on European routes. The compliance cost on VLSFO consumption for intra-EU voyages saw a jump to an additional $164.02 per metric ton consumed at the start of 2025, representing a 27.5% addition to the fuel cost for those specific routes.

US and international laws governing maritime safety and liability are subject to continuous review

Maritime law is constantly evolving, focusing heavily on safety and new technology risks. For a major tanker operator, this means continuous capital expenditure and training. The US Coast Guard (USCG) is intensifying its focus on cybersecurity, requiring foreign-flagged vessels calling at U.S. ports to integrate cyber risk management into their Safety Management Systems (SMS). A cyberattack's average cost in the maritime industry was reported at around $550,000 in a 2023 study, which defintely highlights the financial risk.

Other key 2025 mandates include the mandatory entry into force of the International Maritime Solid Bulk Cargoes (IMSBC) Code Amendments 07-23 on January 1, 2025, and the Energy Efficiency Design Index (EEDI) Phase 3 for all new ship contracts signed after the same date. Plus, the rise in personal injury claims under the Jones Act means liability exposure is always present. You have to keep safety training and equipment checks flawless.

Compliance with complex international trade and sanctions laws is a constant, high-stakes operational challenge

Frontline Ltd. operates in a market where geopolitical risk is directly tied to profit. The company's CEO noted in November 2025 that sanctions are actually having a positive effect on mainstream tanker rates because the 'incremental barrel to the market is now compliant oil - and compliant oil needs compliant vessels.' This means Frontline Ltd.'s adherence to US, EU, and UN sanctions creates a competitive advantage over the so-called 'shadow fleet' of non-compliant vessels.

Still, the operational challenge is immense. Frontline Ltd. must maintain rigorous due diligence to ensure its vessels and charterers do not violate sanctions by calling at ports in Sanctioned Jurisdictions, which could lead to significant monetary fines or penalties and severe reputational damage. The company's policy is to maintain compliance with all applicable sanctions and embargo laws, but the complexity of global trade routes and the risk of charterer instructions without consent make this a constant high-stakes balancing act.

• Maintain a robust sanctions compliance system.
• Vet all charterers and voyage routes meticulously.
• Ensure all vessels have up-to-date cyber risk management in their SMS.

Frontline Ltd. (FRO) - PESTLE Analysis: Environmental factors

The IMO's Carbon Intensity Indicator (CII) rating system penalizes older, less efficient vessels.

The International Maritime Organization's (IMO) Carbon Intensity Indicator (CII) regulation, which became mandatory in January 2023, is the primary near-term driver of environmental risk and opportunity. The system assigns an 'A' (superior) to 'E' (inferior) rating based on a ship's operational carbon intensity, which tightens by approximately 2% annually until 2026. A 'D' rating for three consecutive years or an 'E' rating in a single year forces a shipowner to submit a corrective action plan, which can lead to commercial penalties like being excluded from charter contracts.

For the broader industry, Clarksons Research estimates that around 45% of the global tanker fleet could face a 'D' or 'E' rating by 2026 if no modifications are made. However, Frontline Ltd. is strategically positioned to mitigate this risk. The company achieved a weighted average CII rating of 'A' in 2023, a performance level that outperformed both the IMO and Poseidon Principles emission trajectories by 20% and 10%, respectively. This superior rating is a direct result of the company's aggressive fleet modernization program. A young, efficient fleet is defintely the best defense here.

Increased scrutiny on ballast water management and oil spill prevention requires fleet upgrades.

Regulatory scrutiny on environmental protection is intensifying, particularly concerning ballast water and oil spill risks. The International Convention for the Control and Management of Ships' Ballast Water and Sediments (BWM Convention) is now fully enforced, and 2025 brings stricter compliance checks. Key operational changes are mandated this year:

• New standardized Ballast Water Record Book (BWRB) format is mandatory from February 1, 2025.
• Electronic BWRBs (e-BWRBs) become mandatory from October 1, 2025.
• Port State Control (PSC) authorities under the Paris and Tokyo MOUs will conduct a Concentrated Inspection Campaign (CIC) specifically targeting BWM systems from September 1 to November 30, 2025.

Non-compliance risks vessel detention, which is a direct hit to revenue. Frontline has already addressed the core capital expenditure challenge, reporting 100% ballast water treatment installations across its fleet. This proactive investment significantly de-risks the fleet from the operational disruptions and fines that will hit less-prepared competitors during the 2025 CIC.

Pressure to decommission older, single-hull tankers to reduce environmental risk is rising.

While the final international phase-out date for large single-hulled tankers under MARPOL was set for 2026, market pressure is accelerating the retirement of older, less-efficient double-hull vessels. The driving force is not just the hull type, but the vessel's poor energy efficiency, which translates directly to a low CII rating. Charterers and financiers are increasingly favoring modern, 'Eco' vessels.

Frontline's strategy of selling older tonnage and acquiring modern ships directly capitalizes on this trend. Between 2023 and the first half of 2024, the company sold ten non-eco vessels with an average age of 13.5 years and acquired 24 state-of-the-art modern vessels with an average age of 5.3 years. This move positions Frontline to benefit from the expected scrap-driven tightening of the market as competitors are forced to retire their older, less-compliant ships. Their fleet is essentially future-proofed against this decommissioning pressure.

Availability and cost of low-carbon marine fuels (e.g., bio-fuels) impacts future OpEx.

The transition to low-carbon marine fuels is a major OpEx consideration, driven by the IMO's long-term decarbonization goals and the EU's FuelEU Maritime regulation, which mandates a 2% reduction in greenhouse gas (GHG) intensity from 2025. The cost difference between conventional and alternative fuels, especially with the inclusion of EU Emissions Trading System (ETS) costs, is substantial.

The cost of compliance is already visible in the fuel market. In early 2025, Very Low Sulfur Fuel Oil (VLSFO) prices average between $580 to $650 per metric ton (mt). However, for vessels trading within the EU, the cost of traditional fuels is significantly higher due to the ETS. For example, High Sulfur Fuel Oil (HSFO) had a flat price of $455.73/mt in Rotterdam, but the total expense, including the carbon compliance cost, reached $633.96/mt, a 39% increase.

Frontline's fleet is equipped to manage this cost volatility. As of December 31, 2024, 45 of their vessels are scrubber-fitted, allowing them to use the cheaper HSFO outside of EU ETS trades. Furthermore, the company has taken delivery of state-of-the-art ammonia-ready VLCC newbuildings, positioning them for the eventual shift to zero-carbon fuels. The immediate action for OpEx management is optimizing the use of their scrubber-fitted fleet to take advantage of the HSFO price differential where regulations permit.