We at Pyxis believe that our modern eco-efficient mid-sized vessels, operated safely and well maintained by our managers, lead to attractive chartering arrangements and cost-effective return on capital for the benefit of our shareholders.
Product Tanker Sector
Primarily, we address the worldwide market for the marine transportation of refined petroleum products, which is driven in turn by demand for transportation fuels, including gasoline, diesel/gas oil, jet/kerosene and naphtha. We believe that fundamental population growth combined with increasing per capita incomes and further industrialization will lead to long-term demand growth globally for transportation fuels.
Product tankers are differentiated by their coated cargo tanks, predominately epoxy-based paint, which minimize any corrosion from refined petroleum products and facilitate the rapid cleaning of cargo holds. Based on carrying capacity, the worldwide product tanker fleet ranges from small tankers under 10,000 deadweight tons (or dwt) carrying capacity to 130,000 dwt. A main group of vessels transporting the majority of cargoes consists of 2,871 product tankers which range from 42,000 to 130,000 dwt (MR2-LR2) and aggregate over 182.1 million dwt. as of February 1, 2026 according to Arrow Shipbrokering. Our area of focus, the Medium Range (or MR2) category represents the largest total carrying capacity at 42.4% (dwt) of this product tanker group. MRs are considered the workhorse and usually operate in the Atlantic and Pacific basins. Customers include major integrated and national oil companies, international commodity trading firms and refiners.
Constructive Industry Conditions:
Historically, seaborne trade of refined products has been moderately correlated with global GDP growth. In January 2026, the IMF slightly revised its forecast for annual global GDP growth to average 3.25% through 2027, supported by resilient economic activity despite trade tensions and sticky inflation.
As a sign of solid global demand, OPEC+ restored 2.9 Mb/d of voluntary crude production cuts by year-end 2025. On March 1, 2026, the group announced a further 206 Kb/d increase effective April. Expanding sanctions on Russia and Iran, along with tighter U.S. restrictions on Venezuela, may constrain petroleum exports particularly to China, reduce reliance on the “dark fleet” and increase demand for compliant tankers while continuing to reshape trade routes.
The IEA’s February 2026 update projects global oil demand to rise by approximately 0.9 Mb/d (less than 1%) to 105.9 Mb/d in 2026, supported by normalizing economic activity. Global crude supply is expected to increase by 2.4 Mb/d to an average of 108.6 Mb/d, driven equally by higher output from non-OPEC+ countries in the Americas and OPEC+. This dynamic could result in an oversupplied market and potential downward pressure on crude prices, absent further geopolitical disruptions.
Product tanker charter rates remain healthy despite moderating global refined product demand, with inventories in several regions still below historical averages. Global refinery runs are projected to rise approximately 1% to 84.6 Mb/d in 2026, backed by healthy crack spreads. In the U.S., refinery utilization averaged 89.6% during the four weeks ended February 27, 2026, a full 4% higher YoY. These trends are expected to support charter rates through the remainder of the year.
Longer-term product tanker demand should be further sustained by increasing worldwide refinery throughput and net capacity additions of 2.5 Mb/d (from 2025 to 2030 according to Drewry –Sept. 2025), substantially in the Middle East (ME) and Asia, driving ton-mile expansion and growth in petroleum products exports from the U.S., ME, India and China.
Major Geopolitical Events Continue to Drive Chartering Activities:
In recent times, major armed hostilities have had a significant impact on the product tanker sector. The invasion of Ukraine by Russia in February, 2022 shocked the global energy markets. As a member of OPEC+, Russia has been a major producer of crude oil at 11.4 million barrels/day as of February 2022 of which ~8 Mb/d were exported. At that time, Russia exported 2.85 Mb/d of refined petroleum products of which 1.5 Mb/d went to Europe. As a result of this war, many countries introduced a broad range of sanctions on Russian entities, individuals, goods and commodities, including petroleum products, which has affected global trade and relationships. The Russia–Ukraine war continues to reshape trade flows and expand ton-mile demand. Despite 19 rounds of sanctions by the EU and UK/US actions, Russian petroleum exports have largely shifted to China and new U.S. measures are beginning to curb deliveries to India. The EU ban on refined products derived from Russian crude started late January and extends to all Russian energy imports by 2027. With ~ 16% of the global product tanker fleet currently black-listed (DNB Carnegie), demand for compliant tonnage is rising. Meanwhile, U.S. Gulf and ME product exports are moving longer distances, further supporting ton-mile growth.
The outbreak of war between U.S.- Isreal and Iran at the end of February, 2026 could expand into a regional conflict. The effective closing of passage from the Persian Gulf through the Strait of Hormuz, a major chokepoint, and threatened attacks by the Houthis on vessels in the Red Sea/ Gulf of Aden, has already disrupted energy markets. A prolonged ME conflict could adversely impact global growth and rekindle inflation. In order to avoid possible assaults, vessels could be rerouted from transits through the Suez Canal around the Cape of Good Hope, adding sailing days thereby reducing available capacity. A resurgence of Somali piracy in the Indian Ocean further compounds these risks and heightens operational uncertainty.
The economic impact from the introduction/expansion of U.S. trade restrictions is still developing, including the effects on the energy markets. The recent defeat of President Trump’s use of IEEPA tariffs clouds the trade picture but should have limited impact to the petroleum sector. The July, 2025 U.S.-EU trade agreement is still on for the potential purchase of $750 billion in US energy products over the next 3 years, which should be a possible tailwind for tanker demand. The U.S. sponsored regime change in Venezuela should have limited impact to the oil markets in the short-term, but may affect other countries, e.g. Cuba. The newly proposed U.S. Maritime Acton Plan, if implemented, could result in substantial fees to be paid on foreign built vessels discharging cargoes at U.S. ports, which could result in reciprocal surcharges by other nations and further impact trade flows.
Uneven economic activity amid increasing destabilizing geopolitical events, combined with limited inventories in certain locations, create arbitrage opportunities for refined products across a number of markets and support our sector. At the same time, these conditions contribute to greater spot chartering volatility; Unpredictable weather patterns and climate change only add to operating complexity. In the short-term, market sentiment should continue to be dictated by the effects of armed conflicts and the general economic fall-out from trade restrictions.
Rising Supply of MR2 Product Tankers- Estimated Net Fleet Growth of 6% in 2026:
Large MR2 tanker orderbook but new orders drop – During 2024, newbuild MR2 orders rose substantially to 194 vessels (BRS Shipbrokers), before slowing sharply with only 53 orders recorded in 2025; As of February 1, 2026, the MR2 orderbook stood at 282 vessels, representing 14.4% of the global MR2 fleet of 1,957 tankers, according to Arrow.
Rising delivery schedule – For remainder of 2026, 138 MR2 are scheduled for shipyard delivery, 87 tankers in 2027 and the balance thereafter (Arrow). Yards quote deliveries for late 2028+.
Slippage continues – Last year slippage in scheduled deliveries was estimated at ~5% of initial 2025 forecasts (Allied QuantumSea). A number of Asian shipyards continue to face inflation, labor issues, supply-chain disruptions and delays stemming from massive order books, primarily for other types of vessels.
Significant newbuild concerns remain for owners – New ordering hampered by high construction prices, limited yard slots with extended delivery dates, future technology/ship design concerns, pricing and availability of alternative low-carbon fuels and increasing/evolving environmental regulations.
Old tonnage exceeds OB; Demolitions should pick up over the long-term – Reportedly, only 13 MR2 were scrapped in 2025 due to the healthy chartering environment and strong tanker values. Given the typical economic life of 25 years, the pace of scrapping should pick-up and the Dark Fleet of old tankers becomes unemployable. Importantly, 19.8% (or 388) of global MR2 fleet is 20+ yrs. old (Arrow), significantly higher than the OB.
Firm MR2 Values- According to a group of international ship brokers as of early March 2026, NB prices were an average of $49.7 million, 29% higher than the 10-year average, second-hand 5-year-old tankers at $45 million, 13% greater than the 5-year average, and 10-year-olds at $35.3 million, 18% higher than the 5 yr. average. Higher charter rates, increasing environmental restrictions and positive long-term supply/demand fundamentals support improving asset values.
Increasing IMO regulations- Tanker operations and vessels are significantly regulated by international conventions, such as SOLAS and MARPOL, class requirements, various governmental health, safety and environmental laws and regulations, including OPA and CERLA, IMO regulations and by other jurisdictions. IMO regulations governing CO2 emissions, including Energy Efficiency Existing Index (EEXI) and Carbon Intensity Indicator (CII), which started in 2023, may lead to a reduction /limitation of available efficient vessel capacity. The IMO vote on the Net-Zero Framework (MEPC 83) has been postponed to October 2026. If implemented, further carbon cuts could follow within a few years, with non-compliant vessels facing material penalties. Consequently, older, less efficient ships would be disadvantaged, leading to slower speeds, lower utilization and higher running costs, as well as fragmentation in chartering. The independent classification societies certify that a vessel has been built and maintained in accordance with established rules and regulations, including periodic inspections and surveys of the vessel. In addition, many charterers have established certain standards to employ vessels carrying refined products guaranteed by strict vetting processes. Consequently, quality vessels and flawless operations are paramount within the product tanker industry.
Dry Bulk Sector
We own controlling interests in three modern mid-sized eco- efficient dry bulkers. Through a 60% equity interest, we control a single ship joint venture which owns a 2016 Japanese built 63,250 dwt. scrubber-fitted Ultramax dry bulk vessel which was purchased in September, 2023. In February, 2024, we acquired a 2015 built Chinese built 83,013 dwt. scrubber-fitted Kamsarmax (KMAX) carrier, and in late June, 2024, we closed a similar joint venture investment in a sister ship.
These strategic investments into the dry bulk sector are supported by counter-cyclical fundamentals, and to a lesser extent, counter-seasonal activity, in contrast to the product tanker sector and should provide attractive long-term returns to our shareholders. Our management and Board members have extensive experience in owning and operating dry bulk carriers.
Dry bulk demand has historically been moderately correlated with global GDP growth, with China the primary driver of demand of major bulk commodities, e.g. iron ore and coal. The IMF (January) slightly raised its global GDP forecast to average 3.25% through 2027. China is projected to grow 4.5% in 2026, slowing to 4.0% in 2027. While export diversification away from the U.S. and Chinese government stimulus support the economy, structural pressures in real estate and banking, along with an aging population, may weigh on its longer-term growth.
Since last summer, dry bulk charter rates have shown steady improvement due to resilient global economic activity which has been supported by strong commodity prices, lower energy costs and a weaker U.S. dollar. Chinese bauxite imports and steel exports have been strong. Record grain harvests in South America and China’s recent agreements to increase U.S. soybean imports have helped strengthen rates for mid-sized bulkers. According to Bimco, during the first 6 weeks of 2026, grain shipments were up 15% YoY and ton-miles up 17%. A prolonged disruption in the oil markets from the Isreal-U.S. and Iran war could boost demand for coal as a cheaper power alternative, which would increase demand for mid-sized bulkers. At March 6, 2026, the Baltic Dry Index (BDI) stood at 2,010, up 7% YTD.
As of February 1st, the total dry bulk fleet was 1.06 billion tons and the OB stood at 13% with 13.5% at 20 yrs. of age or more (Arrow). The Kamsarmax OB was 362 vessels (13.8% of the global fleet) and the Ultrarmax OB was 456 units (25.8%). Notably, 21.6% of the worldwide fleet of 2,622 Kmax was 20+ yrs. old, which should lead to significant scrapping over the long-term. The Ultra fleet is relatively young.
In mid-February 2026, DNB Carnegie issued a balanced supply and demand outlook for the dry bulk sector. During 2026-28, it forecasts average seaborne dry bulk demand growth of 2.5% per year, vs. annual net fleet growth of 2.6%, which could lead to a relatively stable chartering environment and ship values.
Seaborne trade with India will become an increasing positive factor given the world’s largest population and expanding stage of development. The IMF forecasts India’s GDP growth at 6.4% per year through 2027.
Beginning 2H 2024, prices for bulk carriers materially declined. However, values for second-hand modern Eco- Kamsarmax and Ultramax vessels have improved, supported by better freight markets which started summer 2025. As of early March, 2026, the average prices of 5- and 10-year-old Kmax have increased to $35.3 million and $28.2 million, or 7% and 18% higher than 5 year averages. Similarly, Ultras were up 11% and 29% to $34.4 million and $27.0 million, respectively.