Dr. Nikos Tsakos, founder and CEO of Tsakos Energy Navigation, spoke on the US financial channel Schwab Network about the potential of Greek shipping and how maritime transport will be affected by geopolitical developments.
The head of the NYSE-listed company said that due to Western sanctions against Russia, a major exporter of oil and LNG, the freight market was greatly affected as oil trade routes changed, resulting in an increase in tonne miles and transport costs.
“Russia exports to the Far East, India and Brazil, and Europe brings oil from the Far East and the USA to cover its needs. Therefore, the transportation distance has also increased,” the CEO of Tsakos Energy Navigation stated.
Fares
Regarding the reduction in the price of oil and to what extent the freight rates are affected, the Greek shipowner replied that this is good for consumers, stressing that the lower the price, the more the demand increases, and therefore the transport work for tankers.
Dr. Tsakos added that the geopolitical developments in international trade resulted in a greater demand for oil.
On how maritime transport is affected by restrictions on daily vessel transits announced by the Panama Canal, due to low water levels from the drought, he said that this increases the time of a trip, as ships choose routes via the Cape of Good Hope or Suez to Asia and the Middle East.
This, he added, has caused transport costs to increase by 50%, which is passed on to consumers, who are already facing increased inflation.
Performance
Dr. Tsakos said that 2022 was a year with record profits for TEN and the same performance is expected in 2023, pointing out that currently TEN’s fleet is time chartered at 95%, ensuring profits and dividends for shareholders.
He said that the company operates mainly in the western USA, Northern Europe and Brazil, despite the fact that the offices are located in Greece.
He underlined that shipping is an international industry, adding that Greece has the know-how and expertise and this is the reason why it is called the “Silicon Valley of Shipping.”
“Greece may be a small country of 11 million inhabitants, but Greek shipowners control 20%-25% of the world’s tonnage, depending on the type of ships.”
“Of all the things you see around you and use in your daily life, 1/4 has been transported and reached you by Greek ships,” he added.
