INTERVIEW: Ardmore expands clean tanker fleet amid volatile Hormuz outlook

Ardmore Shipping has doubled its newbuild orderbook to four product and chemical tankers, exercising options for two additional 40,500-deadweight ton Handysize tankers at China's Wuhu Shipyard as the company positions for prolonged volatility in tanker markets following any reopening of the Strait of Hormuz.

The expanded order, announced in a June 16 press release, brings Ardmore's total commitment to four vessels with deliveries scheduled from late 2028 onward, with two further options secured at similar terms.

The company originally ordered two newbuilds earlier this year with full IMO2 specifications, allowing the tankers to carry crude, refined products and the full range of chemical cargoes without conversion work, Gernot Ruppelt, chief executive of Ardmore, said in an interview at the Marine Money Conference in New York on June 16.

"These are multi-decade investment decisions, and it can secure optionality beyond sort of your standard mainstream trades. It's almost a no-brainer," Ruppelt said in the interview.

The incremental cost for marine line coatings at the newbuild stage to achieve IMO2 specifications is about $3 million per ship compared with standard specifications, he said.

The timing of the expanded order follows Ardmore's sale of a 2014-built vessel for $35.5 million around the start of the war in Iran, capturing a 30%-35% price appreciation from secondhand acquisitions made in spring 2025, Ruppelt said.

Market outlook

Ardmore expects six to nine months of disrupted trade flows as the industry adjusts to new supply chain priorities following any reopening of the Strait of Hormuz, with executives forecasting competing arbitrage opportunities that should support freight rates.

Around 130 product tankers remain trapped in the Persian Gulf following months of disruption, according to a previous statement by Ardmore. Those ships' return to service would coincide with shifting cargo flows rather than simply adding capacity, Ruppelt said.

The reopening would trigger a rapid destocking of inventory built up in the Arabian Gulf as consuming regions with depleted stocks scramble to replenish supplies, he said.

"Whatever you saw swinging in one direction is then going to swing quite forcefully the other direction," Ruppelt said. "The market is going to have quite a few upward surprises left."

The shift in trade patterns during the effective closure of the Strait of Hormuz saw US Gulf Coast refiners operating at 98%-99% utilization rates, with cargoes traveling as far as South Korea on routes that are not typical for the trade.

Fleet strategy

The newbuild strategy reflects Ardmore's focus on asset flexibility rather than specialization in either clean petroleum products or chemicals.

During weak markets in 2021, the company carried significant volumes of non-petroleum cargoes, while recent strength in refined products has seen chemical tankers trading extensively in standard clean petroleum product routes, Ruppelt said.

The company maintains a predominantly spot market exposure for its fleet while selectively adding time charter coverage with oil majors and chemical producers. Ardmore's breakeven for its fleet is above $12,000/day, allowing cash flow generation across a wide range of market scenarios, Ruppelt said.

Time charter inquiries from oil companies and refiners have increased as counterparties seek to secure supply chain resilience, although tanker owners are holding out for higher rates given the strong spot environment, Bart Kelleher, president of Ardmore, said.

"We've really tested now the case on how comfortable is just-in-time inventory," Kelleher said. "Whether you're an enterprise player or a state actor, you're really going to kick some tires on your supply chain resilience."

The global product tanker orderbook includes 142 Medium Range newbuilds scheduled for delivery in 2026, with many already committed to initial employment or cargo programs.

The global Long Range 2 orderbook is delivering into free trade, as the Aframax crude tanker orderbook remains minimal, with owners choosing the LR2 specification for built-in optionality between crude and clean trades. About 7% of the current LR2 fleet is replacing former Aframax routes, Ruppelt said.

Ardmore completed three secondhand acquisitions in spring 2025 when asset prices corrected on concerns about global economic impacts. The timing proved accurate as markets subsequently strengthened, Ruppelt said. The company continues to explore price dislocations across different asset classes, delivery dates and cargo flexibility specifications.