International Seaways, Inc. (INSW): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at the tanker sector in late 2025, and honestly, the landscape is a mixed bag of high-stakes risks and clear opportunities for a company like International Seaways, Inc. (INSW). While suppliers are squeezing hard-think full shipyard orderbooks and rising crew costs hitting $690 monthly by early 2026-the current spot market is handing owners a temporary win, pushing VLCC rates near $137,000 a day. Still, the real story is how International Seaways, Inc.'s rock-solid balance sheet, boasting a net loan-to-value of just 13%, lets it navigate intense rivalry and looming long-term substitution threats better than most. Dive in below to see the full breakdown of the five forces shaping International Seaways, Inc.'s competitive edge right now.

International Seaways, Inc. (INSW) - Porter's Five Forces: Bargaining power of suppliers

The bargaining power of suppliers for International Seaways, Inc. (INSW) is shaped by input costs, regulatory compliance burdens, and the specialized nature of essential maritime technology.

Shipyard newbuilding prices are high, with little discount pressure as orderbooks are full through 2027. Data from March 2025 showed dry bulk newbuilding contracting plummeting 92% year-over-year in the first two months of 2025, yet newbuilding prices remained relatively stable, dropping only 1%. Delivery delays are significant; smaller bulkers ordered now face delivery dates starting from 2027, while larger vessels won't be available until 2028. Chinese yards have secured preliminary utilization rates of 50% in 2028 and 20% in 2029 with some LNG contracts. Despite a slight dip in prices since the start of 2025, newbuilding pricing remains at near historically firm levels.

Bunker fuel costs are volatile, tied to global oil, and compliance with EU ETS in 2025 is increasing the cost of specialized fuels. For ships operating on intra-EU voyages using Very Low Sulfur Fuel Oil (VLSFO), the EU Emissions Trading System (ETS) compliance cost added $164.02 per metric ton consumed on January 1, 2025, compared to $93.73/mt the previous day. For 2025, shipping firms must surrender 70% of required EU Allowances (EUAs), rising to 100% from 2026 onwards. The FuelEU Maritime regulation mandates a 2% decrease in the greenhouse gas intensity of marine fuels starting in 2025. The total fuel and compliance cost for one tonne of VLSFO on an intra-EU voyage was projected to climb by 5.9% from the 2025 year-to-date average to $829.94 per tonne in 2026.

Crewing costs are rising; the ILO minimum monthly basic wage for an able seafarer is set to increase from $673 to $690 in early 2026. The agreed three-year structure sets the minimum wage at $690 per month from January 1, 2026, $704 from January 2, 2027, and $715 from January 1, 2028. This represents an increase of more than 6% over the previous structure which set the minimum at $673 as of January 1, 2025.

Specialized engine and equipment manufacturers hold power due to complex, proprietary dual-fuel (LNG) technology required for new vessels. WinGD's X-DF is the only low-pressure dual-fuel two-stroke engine promoted for newbuilds, achieving close to 100% market share among LNG carrier new builds in 2024, with almost 900 engines in service or on order. MAN's B&W dual-fuel ME-GI engine is expected to shortly reach 1,000 orders. In 2025, 871 ships were on order that will be fueled by LNG, accounting for just under 70% of ships on order powered by alternative fuels.

Finance is available, but capital costs for new vessels remain near multiyear peaks. International Seaways, Inc. secured a credit facility in 2025 that includes a $239.7 Million Term Loan and a $91.9 Million Revolving Credit facility. An Aframax newbuild cost was reported at $62 million in the second quarter of 2025.

Here's a quick look at the supplier cost pressures:

The specific financial commitments related to International Seaways, Inc. (INSW) financing are:

• Term Loan component of the new facility: $239.7 Million
• Revolving Credit component of the new facility: $91.9 Million
• Projected compliance expenses for the entire shipping industry under EU ETS: $9.1 billion by 2026

International Seaways, Inc. (INSW) - Porter's Five Forces: Bargaining power of customers

You're analyzing the customer power over International Seaways, Inc. (INSW) in the current, highly volatile tanker market as of late 2025. The power dynamic is a tug-of-war between the short-term spot market strength and the long-term negotiating leverage held by a few massive charterers.

Power is low in the current spot market, as geopolitical factors drove Very Large Crude Carrier (VLCC) rates to nearly $137,000 a day at the end of last week in November 2025. This is a significant jump, with the benchmark Middle East Gulf (MEG) to China route (TD3C) having seen spot rates settle at $125,081 per day by October 30, 2025. The Baltic Exchange's global average VLCC time-charter equivalent (TCE) index soared to $108,833 per day by the end of October 2025.

Major oil companies and national oil companies are few and large, giving them leverage in negotiating long-term Time Charter Equivalent (TCE) rates. International Seaways, Inc. serves independent and state-owned oil companies, oil traders, refinery operators, and international government entities. To be fair, this concentration of demand power is most evident in the contracted book. As of October 1, 2025, the Company had 14 vessels on time charter agreements, representing total future contracted revenues through expiry of approximately $229 million, excluding profit share.

Switching costs are minimal for customers who can easily charter a competitor's vessel for a spot voyage. The market liquidity, evidenced by the rapid rate spikes and subsequent easing, suggests that charterers have alternatives for immediate needs, especially given the high number of vessels available for spot fixtures when rates are not at their peak. Still, the sheer volume of crude needing transport due to sanctions-related trade shifts means customers must secure capacity quickly, which can temporarily override this low-cost factor.

International Seaways, Inc.'s fleet of 76 vessels as of September 30, 2025, is diversified across crude and product segments, slightly mitigating reliance on any single customer type. Here's a quick look at that fleet composition:

The mix of 11 crude carriers (VLCCs and Suezmaxes) and product carriers (Aframaxes/LR2s, LR1s, MRs) means International Seaways, Inc. serves different demand cycles, which helps balance customer power across its segments.

High war risk insurance premiums in mid-2025 were passed to charterers, temporarily strengthening the owners' negotiating position. Geopolitical tensions caused sharp increases in these ancillary costs, which owners typically pass on. For instance, war risk insurance premiums for shipments to the Middle East Gulf jumped to 0.5% from around 0.2-0.3% a week prior. For a vessel valued at $100 million, this meant per-voyage hull and machinery insurance premiums in the Gulf of Oman increased from $125,000 to roughly $200,000 in one week.

This cost pressure translates into leverage for International Seaways, Inc. because charterers must absorb these massive, sudden increases to keep oil flowing. You can see the impact on their short-term earnings:

• VLCC rates on the MEG-China route fell only 7% from their high of $96,100 per day to $89,576 per day in late September 2025, showing rate stickiness.
• The blended average spot TCE rate for International Seaways, Inc.'s total fleet in Q3 2025 was lower than Q3 2024, but the market strength in Q4 2025 suggests a strong ability to command high rates for uncommitted days.
• The company declared a combined dividend of $0.86 per share for December 2025, based on a payout ratio of at least 75% of adjusted net income, showing cash flow strength derived from high market rates.

Finance: draft the sensitivity analysis on the impact of a 10% sustained increase in war risk premiums on Q1 2026 projected TCE revenues by next Tuesday.

International Seaways, Inc. (INSW) - Porter's Five Forces: Competitive rivalry

You're looking at the competitive rivalry force for International Seaways, Inc. (INSW), and honestly, it's a tough arena. The global tanker market is highly fragmented, though International Seaways, Inc. (INSW) is recognized as one of the world's largest operators, consistently ranking among the top 10 tanker shipping companies in 2025 reports.

Direct rivalry is intense with major listed peers like Frontline Ltd., Scorpio Tankers Inc., and Teekay Corporation competing for the same charter business. International Seaways, Inc. (INSW) itself operates a diversified fleet, which as of Q3 2025, was actively being optimized through sales of older tonnage. For instance, in Q3 2025, the company sold 5 vessels with an average age above 17 years for $67 million in proceeds, while also agreeing to sell 3 additional MR tankers for about $37 million in Q4 2025.

Market supply/demand balance is diverging right now, which directly impacts how hard you have to fight for rates. Crude tankers are showing a slight strengthening in 2025, with an expected demand growth of 2.5%-3.5% and a supply/demand gap forecast at 4 percentage points. Product tankers, however, are weakening because fleet growth is outpacing demand; the supply/demand gap for this sector is forecast to be a much wider 12 percentage points in 2025.

High exit barriers exist because the assets-the vessels-have a long operational life, and repurposing specialized tankers is difficult. We see evidence of this aging fleet, as approximately 300 Aframax and Suezmax ships alone are set to turn 20 years old by 2028, but scrapping remains low due to current profitability, keeping capacity in the market. This means competitors are incentivized to stay in the fight rather than sell at a loss.

International Seaways, Inc. (INSW)'s strong profitability in the period shows that the market can support high performance, which definitely encourages competitors to maintain their capacity rather than exit. The company's Q3 2025 net income was $71 million, with an Adjusted EBITDA of $108 million for the quarter. This strong performance is reflected in their capital position, reporting total liquidity of $985 million and a net loan-to-value of 13% at the end of Q3 2025.

Here's a quick look at the financial performance that sets the competitive bar:

The segment performance further illustrates the market divergence you're competing against:

• Suezmax spot earnings dropped from $38,000 per day (Q3 2024) to ~$33,300 per day (Q3 2025).
• LR1 spot earnings fell from ~$46,900 per day (Q3 2024) to ~$34,600 per day (Q3 2025).
• The company has over $230 million in contracted charter revenue remaining as of Q3 2025.

International Seaways, Inc. (INSW) - Porter's Five Forces: Threat of substitutes

The threat of substitutes for International Seaways, Inc. (INSW) centers on alternative methods of transporting the crude oil and petroleum products that form the backbone of its business. The most immediate substitute is a change in trade routes; a return to Red Sea/Suez Canal transits would shorten sailing distances and slash tonne-mile demand, which is the primary driver of tanker rates.

For context on market rate sensitivity, International Seaways, Inc.'s average spot earnings for the Suezmax sector in the third quarter of 2025 were approximately $33,300 per day, a decrease from $38,000 per day in the third quarter of 2024. Looking ahead, if ships cannot return to the Red Sea and Suez Canal in 2026, the supply and demand growth gap is estimated to narrow to 1 percentage point for crude tankers and 6 percentage points for product tankers. Conversely, if normal routings resume, tonne miles are forecast to fall 4.5%-5.5% in 2026, down from a forecast growth of 2.5%-3.5% in 2025.

New overland infrastructure presents a tangible, albeit currently limited, substitution threat. The Iran-China railway, launched on November 17, 2025, provides a new, sanctions-proof route that bypasses vulnerable sea lanes like the Strait of Malacca, through which approximately 80% of China's imported oil passes. This railway is capable of moving up to 3 million barrels of oil per month. This project is part of a larger $400 billion 25-year China-Iran partnership.

Pipelines and rail are generally not viable substitutes for the high-volume, intercontinental seaborne trade that is International Seaways, Inc.'s core business. While the new rail link is significant for specific bilateral trade, it does not yet possess the scale to replace the global tanker fleet for crude and product movements. However, the existence of such infrastructure changes the strategic calculus for energy security.

Long-term structural risk is high as the electrification trend accelerates. The International Energy Agency (IEA) Global EV Outlook 2025 projects that electric vehicles (EVs) are set to displace over 5 million barrels a day (mb/d) of diesel and gasoline globally by 2030. In 2024, EVs already cut oil demand by over 1.3 mb/d. The IEA's 2025 World Energy Outlook suggests global oil demand may peak at just over 105 million barrels a day in 2029. This trend is reflected in market pricing, with global oil prices dropping from an average of around USD 80 per barrel in 2024 to below USD 60 per barrel at one point in April 2025.

Alternative energy transport, specifically LNG shipping, represents a substitution threat for future energy flows, but not for current crude/product cargoes carried by International Seaways, Inc. The LNG tanker market is growing, with global trade volumes exceeding 400 million metric tons in 2023. As of 2024, over 700 LNG tankers were operating globally. International Seaways, Inc.'s fleet composition, which includes 41 MR tankers and 14 LR1s (including six newbuildings), is focused on refined products and crude, not LNG.

Here are key statistics related to the threat environment as of late 2025:

The shift in energy transport is also visible in the broader tanker market outlook:

• Tanker Shipping Market CAGR (2025-2033): 4.5%
• LNG Tankers Operating Globally: Over 700 (as of 2024)
• LNG Trade Volume: Exceeded 400 million metric tons (in 2023)
• Forecasted Product Tanker T/M Growth (2026): Fall of 4.5%-5.5%

The immediate threat from route changes is tied to geopolitical stability, as evidenced by the rate differential between Q3 2024 and Q3 2025. The long-term threat is structural, driven by global energy transition policies.

International Seaways, Inc. (INSW) - Porter's Five Forces: Threat of new entrants

The threat of new entrants for International Seaways, Inc. (INSW) remains relatively low, primarily due to the colossal financial and operational barriers to entry in the modern tanker industry. You see this clearly when you look at the sheer cost of acquiring modern, compliant assets.

Capital requirements are a massive barrier; newbuilding prices are near historical highs, and a new Very Large Crude Carrier (VLCC) costs over $100 million. Specifically, recent contracts for top-tier South Korean VLCC berths have been priced at about $129 million per vessel, based on a recent four-ship package deal. Even for a company like International Seaways, Inc., which maintains a very healthy balance sheet with a net loan-to-value ratio of only approximately 13% as of September 30, 2025, raising the initial capital for a new fleet is a monumental undertaking for any newcomer.

Regulatory hurdles are increasing dramatically with new environmental rules (e.g., IMO decarbonization targets) requiring significant capital investment in new vessel designs. While the IMO postponed a global emissions pricing mechanism in October 2025, the underlying pressure for cleaner operations is forcing massive CapEx. The container shipping sector, for example, has already committed $150 billion to decarbonization efforts. Any new entrant must factor in the cost of building ships capable of meeting future standards, not just current ones.

The current orderbook is large, especially for Suezmaxes (20.4%) and LR1/Panamaxes (16.6%) relative to their existing fleets, meaning new capacity is already scheduled to enter the market through 2027. The overall crude tanker orderbook-to-fleet ratio has hit a nine-year high of 14.1%. This scheduled influx of capacity, which is set to peak in deliveries in 2027, means a new entrant would be timing their entry against a known supply increase, potentially dampening immediate rate returns unless they are replacing older tonnage.

Establishing a reputation, securing financing (International Seaways, Inc.'s net loan-to-value is low at 13%), and building a global operational network are complex and time-consuming. It takes years to build the trust required for securing long-term, favorable charter contracts that underpin stable cash flow. New entrants lack this operational track record.

Access to skilled, compliant seafarers is a growing constraint, favoring established operators with existing crewing infrastructure. The transition to greener fuels and new technology means the industry needs significant upskilling. It is estimated that nearly half a million seafarers will require new training by 2030 to handle advanced fuel systems and safety protocols. Securing this trained manpower immediately upon fleet delivery is a significant logistical hurdle that an established operator like International Seaways, Inc. is better positioned to manage.

Here's a quick look at the current capacity overhang that new entrants face:

• Suezmax orderbook-to-fleet ratio: 20.4%
• LR1/Panamax orderbook-to-fleet ratio: 16.6%
• VLCC orderbook-to-fleet ratio: 13%
• Scheduled tanker deliveries peak: 2027
• Seafarer retraining need by 2030: Nearly 500,000

The capital outlay for a single modern VLCC is in the $129 million range, and the operational complexity around crewing and regulation adds layers of cost and risk that only deep-pocketed, experienced players can absorb effectively.

The required investment profile for a new entrant compared to an established operator like International Seaways, Inc. is stark:

Finance: draft 13-week cash view by Friday.