Picking up pennies in front of a steamroller. That’s an analogy sometimes used to describe companies and investors trying to squeeze value out of fossil fuel assets, in the face of a burgeoning energy transition. The analogy can sometimes feel a little strained — not least in the business of shipping fossil fuels, where geopolitical upheaval has brought a bounce in demand and sent valuations soaring.
Oil tankers can in principle be refitted to carry methanol and other biofuels, though the growth outlook for these fuels remains uncertain. Moreover, while many might consider the IEA’s 2050 net zero scenario a desirable one, it’s now very hard to see it as probable. Certainly, investors in tanker operators are showing no sign of panic at the prospect. Shares in Norway’s Frontline, one of the biggest oil tanker operators, have risen 159 per cent in the past two years.