SCORPIO TANKERS – RIDING THE PRODUCT MARKET WAVE

Low inventories, record seaborne exports & longer ton-miles, low fleet growth to drive the product tanker market.

New York, January 13, 2023. Senior management of Scorpio Tankers Inc. (NYSE: STNG) gave a slide presentation and responded to a series of questions regarding the company’s strategies for debt reduction, the outlook for the market, and the impacts of Russian sanctions and China’s reopening as part of Capital Link’s Company Presentation Series.

With a fleet of 113 vessels, Scorpio Tankers is the world’s largest product tanker owner. Its fully delivered fleet transports refined petroleum products, such as gasoline, diesel, jet fuel, and naphtha, to a large customer base including oil majors, national oil companies, and commodity traders.?

Scorpio Tankers Has One of the Largest & Most Modern Product Tanker Fleets in the World

·??????Scorpio Tankers’ fleet is large and very young, with an average age of 7.0 years, which is significantly younger than the worldwide fleet.

·??????The fleet is composed entirely of eco vessels, all of which are fuel efficient.

·??????A total of 90% of the company’s vessels were built at?leading Korean shipyards.

Outlook for the Industry is Quite Optimistic

·??????Current product tanker rates are at record levels, export volumes and distances have increased, and demand for the company’s vessels is expected to grow, outpacing supply over the next two years

·??????Exports of global refined products have reached record highs, while inventories have reached extremely low levels.

·??????“Product tankers, now more than ever, are being used to supply more immediate demand from farther afield, and we expect that to continue, especially as jet fuel demand increases,” James Doyle, Head of Corporate Development & Investor Relations, stated.

·??????Jet fuel demand is expected to increase significantly as China opens after years of strict Covid policy. “China opening up is going to increase international travel and jet fuel consumption, which is a major component that’s been missing to the modern product tanker market,” Doyle stated.

·??????Although some analysts have speculated that the product tanker market, like the VLCC market, may be negatively impacted by Russian sanctions, Robert Bugbee, President and Director, dispelled any such fears. “The people drawing these conclusions are wrong,” he stressed.

·??????“I think people put too much expectation on the VLCC market with regard to sanctions. All along, it’s the product tanker market that will benefit more,” Bugbee said.

Very Low Ordering Despite High Rates

·??????Traditionally, when spot rates are high, new ships are ordered. Now, however, there are very few orders for new ships.?

·??????Shipyards are nearly full and construction rates are high, meaning that it could take years for new, large product tankers to be delivered.?“If you really wanted to significantly impact the market and order 100 ships or something, you’d have to spread it out at various yards that are already full with other projects, so you’d be looking at 2026 and after,” Doyle stated.

·??????“We have this extraordinary phenomenon where rates are high combined with an orderbook that is at a record low,” Bugbee remarked. “The supply side is not being recognized by investors or stressed enough by analysts, simply because we work in a world that is so focused on the here and now, so everybody is focused on rates here and now, as opposed to looking forward,” he continued.

Balance Sheet Transformation & Continued Debt Reduction

·??????Scorpio Tankers has maintained a strong balance sheet and expects to reduce $1.3 billion of debt in 2022, and retains $491 million of liquidity as of October 28, 2022

·??????When asked about using the Company’s free cash flow to pay dividends instead of share buybacks, Bugbee stated the shares “are trading well below NAV,” and stressed that the company believes that the best use of its cash flow is to pay back debt.

·??????The?Company has also begun refinancing more?expensive lease financing with new credit facilities from European?financial institutions

·??????Scorpio Tankers has no new buildings on order, providing the company with significant operating leverage

The complete presentation with its extensive Q&A session can be accessed at:?

ABOUT SCORPIO TANKERS INC.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns, lease finances or bareboat charters-in 113 product tankers (39 LR2 tankers, 60 MR tankers and 14 Handymax tankers) with an average age of 7.0 years. The Company is listed on the New York Stock Exchange under the ticker symbol STNG. Additional information about the Company is available at the Company’s website?www.scorpiotankers.com??

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