Paul Heinsdorf

[Paul Heinsdorf @pheinsdo]

@GavMcCracken Never get between a sailor and his steel beach grilled pork.

[Paul Heinsdorf @pheinsdo]

@DarioCpx Ok, so Iran has either (1) ASROC (Anti-Submarine Rocket) to deliver a modified torpedo with the upper depth limits reduced to 0 or (2) rocket delivered mines. Number 2 is not new, number 1 is old tech with a depth modification. I don't see what the deal is.

[Paul Heinsdorf @pheinsdo]

We have not yet begun to top. Only ~2%-3% of VLCC's have been removed from service. 97% yet to go.

[Wisdom & Boats @wisdomandboats]

Seen a lot of posts and opinions on whether tankers have topped and whether the recent drawdown in tanker stocks is just a dip or not.

So here’s me take:

To start, spot rates across the board have started to downturn a bit over the past few days after the recent highs. Most FFAs are in steep backwardation. So the slowdown in spot rates definitely has made the market start to take profits and be more weary of a volatile downturn in rates.

Now freight rates at $25+/barrel just isn’t sustainable obviously and this can be seen as refining margins have fallen considerably and many arbs have started to weaken. The factors that were clearly driving up the market are no longer in play. This can be seen in VLCCs which have been leading the market, as the softening in VLCC spot rates over the past few days has now started to impact the rest of the market.

So as of recently the dip in tanker stocks is an exaggeration of the recent dip in spot rates most likely due to profit taking/fear.

Now are spot rates near/at the top? I don’t think quite yet. I’ve expressed my views that I think the market can go higher as the situation in the Middle East continues either topping within the next ≈1.5 months or later in 2027 if oil prices, arbs, and refining margins can support freight economics. I do think this dip will probably continue as a well needed correction in the short term, with a bounce back to new highs again.

But here’s what’s important, even if rates don’t bounce back fully, and this is the top, it’s basically out of the picture rates return to “normal”. Even if the 1000 WS fixtures are behind us now, rates are still going to stay at extremely elevated levels throughout all of 2027 and likely most/all of 2028.

Crude tanker will still earn hundreds of thousands a day and with asset prices still increasing. Even if rates fall 50% TCEs will still be enormously profitable and supporting of further increasing asset prices. So from a NAV and earnings perspective tanker stocks are still pretty undervalued, and this is what I think people are missing.

There’s still so much support for rates at such strong levels and this evident because the volatility has mostly been on the upside. Rates have jumped 100+ WS a day many times now but that hasn’t been seen on the downside like what would normally happen during a rate spike. So a return to normal isn’t happening and even a big correction will still have rates at absurdly profitable levels.

So there’s my poorly written rant and we’ll all just have to see how this historic market plays out 👍

[Paul Heinsdorf @pheinsdo]

Ok, so then to contract the fleet, Iran only needs to damage/destroy 31+ VLCC's per year. What's not being taken into account are dry docks and dry dock requirements to repair ships. Can't build if you're busy repairing. I expect new VLCC deliveries to drop in 2027.

[Marhelm @MarhelmData]

VLCC supply is no longer as constrained. The VLCC/ULCC orderbook has reached ~32.5% of the existing fleet, while 31 vessels have been delivered in 2026 so far, up from just 1 in 2024 and 6 in 2025. That’s a major shift in the crude tanker supply outlook.

[Paul Heinsdorf @pheinsdo]

Ummm.... didn't we win the Battle for the Hormuz and oil like 2-3 weeks ago?

[Philip Pilkington @philippilk]

There are maybe 1000 working VLCCs in the world. They cost $150m and take 3 years to build.

An Iranian Noor cruise missile costs maybe $100,000 these days. Iran likely has thousands and can supplement them with drones and naval mines.

In an attrition war tankers run out first.

[Paul Heinsdorf @pheinsdo]

@mathelirium From this perspective, Mathematicians are aware the layoff notices will be coming and are being asked to train their AI replacements. The problem is, without this professional class, you won't be able to validate AI "discoveries". I thought OpenAI was set up to prevent this.

[Paul Heinsdorf @pheinsdo]

@mathelirium I've noticed most of the accounts bashing mathematicians are tech-related. There's alot of money in selling the "replacement". Even if the idea is quarter-baked, once the ships are burned, you're stuck on their subscription model.

[Paul Heinsdorf @pheinsdo]

@rieszspieces ngl, I think this is the first step to Idiocracy - the first film which started as comedy but has become a documentary.

[Paul Heinsdorf @pheinsdo]

@m4h007 The damage would progressively hit other fields as well. This was the "ethics" bit OpenAI claimed to want to advance by being open. It's just a valuation stunt with with compounding severe effects on AI itself. Almost desperation, in a way.

[Paul Heinsdorf @pheinsdo]

@m4h007 knowledge to the point where AI math may no longer be validated or iterated on. That is, it could cause severe enough damage to the pipeline for generating new mathematicians that it's future claims may be un-validatable (is that a word?)

[Paul Heinsdorf @pheinsdo]

@jaykreps Great, then you shouldn't be upset when it's your turn to train your lower-cost replacement prior to the layoffs.

[Paul Heinsdorf @pheinsdo]

@cat86g @Anthony_Bonato Why? AI is cheaper and more customizable. Give the kids a chromebook and lower property taxes.

[Paul Heinsdorf @pheinsdo]

@currying @quasicoh hahaha. Mathematicians have gotten word of the impending layoff notices, asked to train their replacement and told they should be happy about it because it's advancing knowledge. After having spent a decade or more in training to do the job.

[Paul Heinsdorf @pheinsdo]

@heuristics @Abelaer Think about it this way, Mathematicians know they're being laid off while being told to train their AI replacements.

[Paul Heinsdorf @pheinsdo]

@heuristics @Abelaer Engineers are most likely next, not so much doctors. Then finance will be automated. You'll still need cashiers and construction workers, oil field laborers, etc. But the knowledge based economy will be gone. With it the trading economy. Without doctors, no need for BMW's

[Paul Heinsdorf @pheinsdo]

@heuristics @Abelaer Once this work is shown to be mostly correct, the need for a mathematician, with decades of training, disappears. Once it hits the medical field, doctors will go. Family doctors first and eventually specialists.