Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the Second Quarter 2018 Financial Results. We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, President and CEO; Mr. Paul Durham, Chief Financial Officer; and Mr.

George Saroglou, Chief Operating Officer of the company. At this time, all participant lines are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]. I must advise the conference is being recorded today, and I’ll now pass the floor to Mr.

Nicolas Bornozis, Capital Link, Investor Relations Advisor at Tsakos Energy Navigation. Please go ahead, sir.

Nicolas Bornozis: Thank you very much. And good morning to all of our participants. This is Niolas Bornozis from Capital Link, Investor Relations Advisor of Tsakos Energy Navigation.

This morning, the company publicly released its financial results for the second quarter 2018. In case you do not have a copy of today's earnings release, please call us at 212-661-7566 or e-mail us at ten@capitallink.com, and we will e-mail a copy to you right away. Please note that parallel to today's conference call, there's also a live audio and slide webcast, which can be accessed on the company's website on the front page at www.tenn.gr. The conference call will follow the presentation slides, so please we urge you to access the presentation on the webcast. Please note that the slides of the webcast will be available as an archive on the company's website after the conference call.

Also, please note that the slides of the webcast presentation are user controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. At this time, I would like to read the Safe Harbor statement. This conference call and slide presentation of the webcast contain certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which may affect TEN's business prospects and results of operations. Such risks are more fully disclosed in TEN’s filings with the Securities and Exchange Commission.

Ladies and gentlemen, at this point, I would like to turn the call over to Mr. Takis Arapoglou, the Chairman of the Board of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead sir.

Takis Arapoglou: Thank you, Nicolas.

Good morning, everyone. And thank you for dialing in today. Improving income by 23% from last quarter in this very poor market is quite an impressive achievement. And once again congratulations, and in order, to Nikolas Tsakos and the team. Nikolas and his team would elaborate on the financials, but I’d like to underline that TEN’s prudent and balanced strategy was designed and perfectly executed over time.

Clearly now to fly-by-night exercise allows our fleet to outperform the spot market by over 100%. While at the same time, a large proportion of our fleet, 80%, has secured more than $1.2 billion of minimum contracted revenues for the next 2.5 years. This allows us to cover most of our expenses and maintain a healthy dividend going forward. Our strong balance sheet and ample liquidity allows us to operate comfortably in challenging markets. This underlines the broad recognition of TEN as an operator of the highest quality, governance -- and has set that by best-in-class corporate governance practices.

There should be absolutely no doubt about the quality of TEN’s corporate governance and this is something that the Board and the company’s controlling shareholders are fully committed to. This is the only way after all to attract and maintain our bluechip client base. Rest assured that we will continue to play a very tight defense, which as I say is also the best form of offence, when the time comes -- when the time for this comes. And indeed recently there are increasing signs that we’re getting closer to a more positive sentiment in the market for which we are perfectly positioned to fully benefit from. So that’s it from me for now.

And I’ll pass the floor on to Nikolas Tsakos.

Nikolas Tsakos: Thank you, Chairman, and thank you for your good words. However, it’s still very painful to report losses, even diminishing ones. As we had predicted and we discussed on our last call, we could see that the market environment is still very, very poor but getting better. We believe that the first quarter we were at the real bottom of the bottle, things look to becoming a bit less bleak as we go forward, as far as the spot market is concerned.

We have seen a small but significant improvement shown on spot rate since that period of time. The majority of the categories of our fleet is participating. We have seen the Suezmaxes operating at close to $12,000 in the first six months rather than $7,000 in the previous period. The Aframaxes where we have a very big presence, as you know, with $11,000, up from $4,000 in a previous period, and also the Panamax where again we have a presence tripled from $3,000 -- or doubled from $3,000 to $7,000. So the rates are still very depressed, at least they are covering and I’m talking about the spot market, but at least are starting to govern operating expenses for many -- for which for many owners it is very important.

In our case of course we have a very different picture having able to outperform in significantly the spot rates, and I will get into exactly the analysis during my presentations and George, our COO’s presentation later. Again, there are signs that things are getting better. We are going to be entering the fourth quarter which usually the market harshens. There are a lot of -- we have the largest scrapping year so far, the largest or the biggest scrapping year so far since 2010 as tankers are concerned. So there are reasons to believe that we are getting out of this very long and dark tunnel.

In our case at TEN, we have been able to as always be counter-cycling. The company has a very strong balance sheet, I think significant in excess of $250 million in cash, and looking to take any opportunities that arise either in our main business or on growing our LNG segment and the shuttle business. And with this, I'll let George our COO to give us an overview of what has happened in the first six months and be back with questions. Thank you.

George Saroglou: Thank you, Nikolas.

We are beginning to see a gradual market improvement and hope as we move closer to the fourth quarter for this to be reflected in the rate as well. Global oil demand continues to grow in 2018 and the expectation for next year remains strong as well. OPEC has begun to pump more oil into the market. The global economy despite recent headwinds from emerging market economies and trade disputes continues to be strong and vessel supply is improving. Our newbuilding ordering is managing and scrapping at year-end 2018 is expected to be the highest year since 2010.

In this environment, TEN's proven commercial strategy of fixing more of the vessels in the fleet on medium to long-term time charters, paid dividends again, as it helped the company to outperform the average spot market indices by over 100% in all vessel categories the company operates. We believe that tanker rates will recover from the low point of the current cycle and look forward to the fourth quarter of this year. For those of you who are connected to the Internet and our website, there is an online slide presentation, the format of which we are going to follow during the call. Turning to slide number 3, where we have the key corporate highlights. After the sale of Millennium, the company's oldest vessel, TEN has now a pro forma fleet of 66 vessels, including six vessels in operation and two newbuilding orders to an oil major against long time charters.

25 vessels in the fleet have ice-class capabilities. The average fleet age is 7.9 years versus 10.3 years for the world tanker fleet. We have a balanced employment strategy that takes advantage of market peaks with profit sharing arrangements. Out of the 66 vessel pro forma fleet, 50 vessels are on secured employment contracts, with an average duration of 2.5 years. The emphasis is on charters with profit sharing arrangements tthat enable TEN to take advantage of spikes and stronger freight markets.

We have secured minimum contracted revenue of $1.2 billion with potential additional revenues from profit sharing arrangements. We have a modern diversified fleet covering clients’ transportation requirements in crude, products, shuttle and LNG, and we have become the carrier of choice for many of the top oil majors, commodity traders and refineries. LNG and shuttles remain the sectors where TEN is trying to grow its presence even more. Slide number 4. We have a breakdown of the current 66 vessel pro forma fleet.

As you can see, 48 vessels are engaged in crude trading, 13 in products, while we have three shuttle tankers and two LNG carriers. Slide 5 lists clients of the company, all of which are bluechip names, with whom TEN is doing repeat business over the years. Thanks to the modern fleet, the safety record and the quality of service. The 10 names that you see listed on the left of the slide represent 72% of the revenues generated for the company. Slide 6, strong secured coverage with upside potential.

We have so far announced during this year new charters and charter extension for a total of 23 vessels in the fleet. The charter period for this vessel ranges from six months to up to 12 years if we include optional periods granted to charters by the company. 50 vessels out of the 66 vessel pro forma fleet are fixed under secured revenue contracts, a combination of time charters, time charters with profit sharings and COAs. While 37 vessels are on market-related charters including the vessels currently trading in the sport market, securing the company’s ability to immediately capture the market upside. The revenues expected from the vessels in the fleet with secured employment cover the company’s annual operating and financial obligations.

On slide 7, the left side of the slide presents the all-in breakeven quotes for the various vessel types the company operates. As you can see, the cost base is low. In addition to the low shipbuilding cost, we must highlight the purchasing power of our technical manager, Tsakos Columbia Shipmanagement and the continued cost control efforts by management to maintain a low OpEx average for the fleet, while keeping a very high fleet utilization rate quarter-after-quarter, that we believe qualifies as full employment. With almost 80% of the fleet on secured employment, the revenue this charter generates cover the company’s operating and finance expenses, including the dividend. In addition, the combination of time charters with profit sharing, COAs and spot charters guarantee for the company a share of the market’s upside every time we have a spike or a sustained strong freight market.

Based on the current number of vessels operating in the spot market and in time charters with profit sharings, for every $1,000 increase in spot market rates, we have a positive $0.07 impact on annual earnings per share. The next few slides, from 8 to 10, tell you basically what we see in the market today. We see solid global economic background, which translates to strong global oil demand growth. 2018 marks the 4th year in a row with global oil demand growing by at least 1.4 million barrels per day against the long-term demand growth figure of 1 million barrels per day. The trend appears to be holding strong as the International Energy Agency in their latest report, forecast 2019 demand growth to slightly accelerate to 1.5 million barrels per day, although, the risk from escalating trade disputes are noted.

With global oil stocks currently below the 5-year average levels and looming US led sanctions against Iran from next November, OPEC in their last June meeting decided to relax compliance with the agreed output cuts. The market is already seeing OPEC increase production which historically has always been positive for tanker demand and the freight rates. US continues to develop as a major crude oil exporter to the world. During 2017, the average US exports were in excess of 1.4 million barrels per day. The latest figures indicate that US crude oil exports are closer to or at 2 million barrels per day, meaning that for 2018, the average growth is going to be higher.

The growing US exports have created new long-distance trade routes, mainly to Asian destinations, adding to ton-mile growth. High scrap prices and the weak market have resulted in a significant increase in tanker scrapping. The average age of scrapped vessels is coming down to about 20 years. With the upcoming regulations for the water ballast in 2019, and the global sulfur cap from 2020, we believe in the company that owners of older vessels will continue to prioritize in scrapping their older tonnage rather than passing them to an expensive spot special survey, the effect of which will be lower net fleet growth for the next couple of years. That concludes the operation part of our presentation.

Paul will walk you through the financial highlights for the second quarter and the first half. Paul?

Paul Durham: Thank you, George. Well, as the Chairman mentioned in quarter two TEN improved on quarter one results with a lot smaller by 23% than in quarter one. Even the market, the loss of $9.6 million or $9.2 million before loss on vessel sale which equates to $0.18 -- minus $0.18 earnings per share is at least encouraging in direction and is mainly due to reduced costs. For the half year, there was a loss to core vessel sales of $21 million.

In such a market, losses were also contained due to our time charter coverage and full employment. Our average daily TCE rate for quarter two was a respectable $17,200 per vessel and for the half year $17,500, well above average market rates. In quarter two we still had 18 vessels on spot, mainly Aframaxes and product carriers, which mostly operated at below breakeven but at least covering operating costs. Fortunately, the dry docking schedule was lighter in quarter two with just two vessels in dock. Average daily OpEx at $7,570 per vessel was 4% down from the prior quarter two and 7% down in the high-level incurred in quarter one.

Daily overhead cost per vessel remains stable at $1,200. Finance costs fell by over $1 million as bunker hedges generated cash gains of $2 million and positive value to valuations of $3 million. This was partly offset by increased interest of $3 million mainly due to the new vessel loans in 2017 at a higher interest rate. While our time charters did again generate cash to cover most operating overhead and finance costs, our expectations for recovery in the spot market within 2018 remain caution. TEN therefore concentrated in half year on ensuring adequate liquidity to meet all eventualities, with confidence that conditions will begin to improve going into 2019.

In this respect, TEN issued a new series of preferred stock raising $150 million. Total cash at June 30 was therefore $280 million. TEN started Q2 with $1.72 billion outstanding loans. We've refinanced loans on 12 vessels, repaying $244 million and obtaining new loans at more favorable terms totaling $255 million. Also $10 million debt was repaid from proceeds on the sale of VLCC Millennium, a further $37 million was paid in scheduled repayment.

So at June 30, the outstanding balance was $1.68 billion and net debt-to-capital was down to 47%, indicating total indebtedness is now declining. Negotiations to finance the two newbuilding Aframaxes at very competitive terms are now in their final stage. And this concludes my comments. Except to add that obviously, we will strive to ensure that the promising trend in results continues through the year-end, hoping of course that the market will help. I now hand the call back to Nikolas.

Nikolas Tsakos: Thank you, Paul. And from your mouth to god’s ear as you say, hopefully we are going to see continuous turnaround in the last two quarters. And as I said, we are fortifying the company by getting long-term business. This long-term business allows us to maintain very strong liquidity, allows us to maintain our conservative dividend payment, which is somewhere around 6% yield, as we speak today, and our industrial approach in chartering fixed long-term gives us the chance to always significantly outperform the market. In the previous quarters, we had so far averaged approximately $23,000 for our VLCCs against a market of $11,000; our Suezmaxes at $15,000 against a market of $7,000 -- a spot market of $7,000; our Aframaxes $18,000 against the market of less than $8,000; and our Panamaxes, where we still have quite a significant fleet at $14,000 towards against a market of $8,000.

And we are I think at the market with our Handysize vessels. This policy has fortified the company. As Chairman said, it is playing defense, which sometimes is very offensive way to proceed. And we hope that we are able to take advantage of the upside, looks to be approaching more and more as we speak. And we get the feeling also from the appetite of the major oil companies that are there to charter our ships for long periods of time.

And with that, I will not take any more of your time for me speaking. I would like to see if you have any questions that -- for us to answer. Thank you very much.

Operator: Thank you. [Operator Instructions].

Your first question is from the line of Mark Suarez. Your line is open.

Mark Suarez: If I could start off with the Series F refinancing. What do you see the priority for that? I mean, is it on the Series B and C refinancing or what are the proceeds intended for?

Nikolas Tsakos: Yes. I mean, our -- being a conservative company, being as a proxy where we want to secure, that our future obligations, when we say future we’re talking about an average of two years going forward, can be dealt with and I mean this is a priority and of course plans for further growth.

As I said, we are seeing opportunities, the LNG, we have never said that -- we have never kept the secret that we are always looking at business, the LNG sector. We participate in every single tender, as you know, as you might recall, we are one of the first that started in this business from this second wave, but we ordered the first ship in 2004. However, we have kept a small fleet mainly because of the changes in technology, and I think we have not regretted it, because that market has gone through a lot of cyclicalities and the tickets are quite large talking about approximately around $180 million to $200 million per vessel. But this is some -- our aspiration is to increase the size. So a combination of conservative preparations for our step-up preferred and fuel growth.

Mark Suarez: And then last one, you talked about a possible transition time for IMO 2020 implementation. Do you have any updates there?

Nikolas Tsakos: This is --- yes, this is the $10 billion question, because now through regulation the 8 million has gone out of our ship. It is a battle which is happening as we speak. There is very strong preference from all of us I would say to be able to have 0.5 safe sulfur burning on our ships by January 1st, 2020. However, the way that things look today and what we are experiencing is that the -- if there is no transition period, we’re going to be seeing a big number of ships having actually navigational problems or breakdowns, because of the quality of bunkers and distillates that are being produced.

Right now, there’s no standard available. It’s really very strange that we are less than 18 months from the due date and it’s -- I think, I mentioned this last time which reminds me very much with the Brexit negotiations. There is a date and there’s no plan how to achieve it. So that’s where we are. But however, any disruption of business will be positive for rates.

Mark Suarez: Sure. And you got a unique advantage that you get to see if for -- I guess you get to see how it affects crude tankers, product tankers and LNG, which segment do you think it’s most beneficial for?

Nikolas Tsakos: Come again, you’re talking about 2020 or?

Mark Suarez: Yes. 2020, I mean is it best for crude tankers because it maybe slows down the fleet, is it best for product tankers because it creates additional demand maybe new routes that are best for LNG bunkering. What does it benefit most?

Nikolas Tsakos: Yes. That’s a very good philosophical question.

But I think what -- if I would say I think it will be product carrier, so which we have about 50% of our fleet is product carriers, I believe would be the first in taking advantage, because they will actually have to move this product that can be distillated and refined, let’s say in the modern refineries of India and Arabian Gulf to Europe and the United States. So they will have in addition to disruption more trade. I think then it will be the crude carriers because of what we mentioned. And LNG, the longer -- I mean it's a much longer term prospect. That would be the last to be benefitted from something like this.

Operator: Thank you. And your next question is from the line of James Jang from Maxim Group. Your line is open.

James Jang: This is James from Maxim.

Nikolas Tsakos: Hi, James.

James Jang: Hey, guys. So just talking by more again, Nikolas, have you seen or do you think there will be any waivers granted for IMO 2020?

Nikolas Tsakos: Depends, what you mean, waivers? I think what the industry is trying right now is for a transition period to allow for the right type of bunkers to be available. Today, people are experimenting. They take something which is -- it used to have 3.5% sulfur content and throw some sort of liquids inside and they hope that they are best. However, all these things destroy the engines of the ships, you have breakdown with all this.

We're fighting right now, our COO spending more focus these days fighting claims again for people to not to get our engines damaged. So I hope that people will see the right and they will grant a two year transition period. It's not -- and when I say two years it doesn’t have to have a specific date. When the actual bunkers are there and are available, then we can start burning them.

James Jang: So is this something that INTERTANKO as a group is kind a pushing for or is it just?

Nikolas Tsakos: Yes, INTERTANKO -- not only, INTERTANKO and all the other associations which we call the round table, which is mean we represent tankers and gas; INTERCARGO, all the cargo ships in the world.

And then you have associations like BIMCO, where you have most of the containers. So -- and you have the largest container mover in the world which is most clients, have clearly stated that they are not planning to spend a single penny on I think this hypocritical and bud for the environmental scrubber idea.

James Jang: So for Tsakos, would it be fair to say that you guys would not be looking to install scrubbers ahead of 2020?

Nikolas Tsakos: What we are saying is as you know the majority of our fleet is chartered long-term. We have cases, where we have 5, 10, 15 year contracts. Thus the end users are clients, might decide to at their time and expense to install scrubbers.

I mean it's likely if we have rented the cutout on a long lease, we cannot stop the end user doing whatever they want to do there. We cannot stop them. So we will allow them to at their time and expense put scrubbers. So I do not exclude the chance for us out of the fleet of 66 vessels to have in the dozen ships scrubbers. But those would be paid by charters and not speculatively by us.

James Jang: Okay. So have -- so just follow-up on that, have you had any discussions with charters yet?

Nikolas Tsakos: Of course.

James Jang: Have they expressed interest in installing scrubbers?

Nikolas Tsakos: Without -- yes. So I mean we have charters, but have approached us and they have decided in a very small amount of vessels to install at their time and expense scrubbers. But a majority of our charters, be it the top tier major world companies, because they are environmentally responsible, have decided that it’s their responsibility to provide the right fuel for us to burn without installing scrubbers.

So I would say two-thirds are not looking at scrubbers, one third might can see the scrubbers.

James Jang: Got you. Okay. Alright, that's all I have, thank you very much.

Nikolas Tsakos: Thank you.

Operator: Your next question is from Magnus Fyhr from Seaport Global. Your line is open.

Magnus Fyhr: Good afternoon. This is the Magnus Fyhr, Seaport Global. Just a question on your fleet renewal strategy, I mean, you have a very modern fleet.

But you also mentioned that you think the product tankers are best positioned for IMO 2020. Your product tanker fleet has been shrinking here over the last few years. Should we expect focus on that segment going forward or where do you see the best opportunities?

Nikolas Tsakos: I think we are always looking at vessels that have a dual -- that are able to have dual capabilities, which means product and crude. And whereas if you look at our fleet is balanced, I mean today we’re only having 13 of our vessels working in the product segment. However, we have a very large amount, to about 28 of our vessels are older ships, so they could actually carry products if we have to.

So we’re almost in the middle between crude and products but we have decided because of our clients’ requirement, sometimes charters that they want more dirty trading. But otherwise, we have a large number of products ourselves.

Magnus Fyhr: And what’s the process there of taking them from dirty to clean if you wanted to, ahead of the 2020?

Nikolas Tsakos: I mean, it is not -- from all the costs that are associated in shipping today, water ballast treatment and the scrubbers, et cetera, et cetera. This is the least of the total. But I think you will need on average a week’s cleaning for the big ships and three or four days for the smaller ships at a cost of about $200,000 for the large ships and half of it for the smaller ships.

So it is not that -- it can be done and we do it all the time when we have to.

Magnus Fyhr: And as far as the wetting process with the major oil to go from dirty to clean?

Nikolas Tsakos: The major oil companies, they do not have a problem with this at all. What your charterers would like of course is to make sure that the vessel is clean enough. So they usually give you a fuel cargo and a gasoil cargo as your first cargo after cleaning before you go into the naphthas and to the veg oils and the more sensitive cargoes.

Magnus Fyhr: Okay.

And just one last question. With your balanced chartering strategy, I mean you have -- I’ve just realized, you have 282 million of cash on the balance sheet and your market cap today is 282 million. Any thoughts there of buying back stocks going forward?

Nikolas Tsakos: Yes. I think, as I said, right now as our Chairman said, we are in the defense. And I think we play defenses to make sure that we will never need to dig deep into our cash reserves by fortifying the company with not burning cash sort of it.

But I think, when we see the market is turning that will be -- we will do this in a bit way. But we need there is a sign that we are out of the woods. As long as we are in the woods, we’re keeping fortified.

Operator: And your next question is from the line of Randy Giveans from Jefferies. Your line is now open.

Randy Giveans: Hey. Thanks, guys. Yes, it’s Randy Giveans at Jefferies. Regarding dry docking, I know you strategically put forward some dry docking as a result of kind of the weaker market to get ahead of some of the regulations. So what is your expectation for dry docking in the back half of this year in 2019?

Nikolas Tsakos: Well, we have about -- this year for the balance of the year we have only one, which is going -- it is happening right now as we speak.

And then next year we have I mean on a big fleet like 60 vessels plus, you have another -- it’s something like eight, nine vessels per year, that have to go through special survey. Last year, we did quite a few -- put forward quite a few. And also in the first quarter, we took advantage of a slower market. And we put forward vessels five -- not all of the five vessels had their special surveys due falling in the first quarter. So we took advantage of the slower market to accelerate the repairs.

And right now we are ready and in position to take advantage of the market when the market will improve without disrupting and taking them out of service.

Randy Giveans: Perfect, okay. And then lastly, can you just give some guidance on quarter-to-date I guess current year-in spot rates for some of your open Suezmax and Aframax tankers? Have you seen the market improving since 2Q?

Nikolas Tsakos: We have seen the market improving. The majority of the Suezmaxes that we have right now are in profit sharing. They have a base rate, with the base rates being between $12,000 and $14,000 for most of these vessels.

Right now the spot market is around $10,000. So the two vessels that are in this spot market and they don't have a base rate with profit sharing arrangement, they're earning currently rates closer to this $10,000.

Randy Giveans: And then the Aframax on the crude side?

Nikolas Tsakos: We have a big part of the Aframaxes that are on time charters. And I mean we told you I think that the average is around $10,000, but we have done $18,000. And so this is something that you should put forward in your calculations.

Operator: Thank you. And your next question is from Michael Webber from Wells Fargo. Your line is now open.

Gregory Wasikowski: Hey, guys. This is Greg on for Mike.

How is it going?

Nikolas Tsakos: Hello.

Gregory Wasikowski: Hey. So just going back to the bunker contamination that you touched on earlier, I just wanted to get your full take on it, see if there’s any updates on the regulatory side and then see how you think it affects IMO 2020?

Nikolas Tsakos: Well, this is something that -- first of all, we have a large scale contamination that started at the beginning of the year out of the Houston area, which affected in excess of 120 vessels. And from there -- from a point of time, a lot of these contaminated cargos have been sold to other parts of the world, in essence, contaminating to almost the full global bunker chain. With -- in excess of 120 incidents it's a little bit disappointing that as we speak right now, we have not seen anybody taking responsibility.

And this is not an event that’s a random event. This is something that as bunker buyers we have seen happening every three or five years. So we need to take corrective action to make sure that we don't take a necessary risk for which we pay, because the bunkers are not given to us for free. So we are paying for the bunkers. And we need to make sure that we use these -- we’ve used these bunkers to move from A to B.

And we would like to do it in a safe way. So we think the bunker industry is responsible in making sure that they will provide the right fuel which is fit for purpose and we will not have to deal with the difficulties that we have been dealing and in the large scale that the latest incidence that the industry has faced. And of course, with 2020 ahead of us, where the majority of the fuels appear to be blended fuels, we feel that that this problem -- and without having standards for this 2020 fuel, we feel that this thing is only going to get worse.

Gregory Wasikowski: Okay. That's helpful.

And then going back to the product tanker trade routes, have you seen this developing already as some of the majors have started to test trials on the compliant fuel? Have you seen the trade routes start to change and develop and that fuel start to get carried around or is that something that you see more of a H1 '19 or H2 '19 event?

Nikolas Tsakos: I think this is more of a second half '19 event, I mean most probably fourth quarter ‘19 event. There are some suppliers who have -- who are selling today a 0.1% fuel oil that is more or less a gasoil type. We have been using these fuels in the SECA zone instead of burning pure 0.1% gasoil. And the expectation is as we are going to have price assessment for the 0.5% fuel oil from the start of next year, to gradually see almost everybody put out in the market a 0.5% fuel oil.

Gregory Wasikowski: Okay.

And then last one from me. I mean it looks like delays for IMO 2020 are highly unlikely. But given your comments earlier about the scrubbers like, what kind of regulatory risk do you think there is, what is the likelihood that the hammer comes down on open loop scrubbers, dumping this into the ocean and either in 2021 or 2022 or even in 2025 that that something could happen and open loops could be outlawed?

Nikolas Tsakos: I believe that there’s a very good chance that the open loop will be dropped. And I think -- and rightly so, because instead of now what we’re trying to do is protect the air emissions and reduce the air emissions. But at the same time, we’re killing the resource of oxygen which is the sea.

So this is very, very short-term, it’s a very short-term fix. And we as INTERTANKO have been -- and as owners have always been very critical. It’s like inventing a new -- as I say, it’s like inventing a new drug that perhaps will kill one of the illnesses, but will kill the patient through another illness. So it’s not something we are looking forward to have and that’s why we’re not take -- and I believe it’s going to be a very short-term fix. So some owners out there are ordering for repairing their ships with scrubbers, but still it’s a minute amount.

I mean there are 40,000 vessels out there that have to follow the legislation of the 0.5. Right now, less or less than about 800 ships have scrubbers, a majority of them cruise vessels up in the ECA zones, which are in Alaska or the West Coast and Scandinavia. So from now until if everybody tried to fit a scrubber from now until the end of the year, you could not achieve more, I would say than 2,000 vessels. So I think it is going to be interesting to see the results. But the industry is starting a bit late, but is starting to focus and come together in this.

And through my participation as Chairman of INTERTANKO we are going to be having a very I would say exciting and heated September in various IMO discussions and hoping that March was the last deadline of any transition period something can be done.

Operator: At this time, speaker, please continue. No questions. Speaker, please continue.

Nikolas Tsakos: Well, there are no more other questions?

Operator: No further questions at this time.

Nikolas Tsakos: We would like again to thank you for tracking the company. I have to say that we are being the largest shareholders, the most disappointed from anybody with not being able to have a positive result which we have pride ourselves in our 25-year history. We hope to be able to reverse this trend for sure in 2019 and 2020 and make it less painful for all of us by preparing the company in this low environment to take advantage of the opportunities that will come. In the meantime, we’ll try and I think as Paul said maintain expenses to the minimum utilization to its highest degree 96.2% way above the industry average of 85%. And you make sure that we are there to provide a healthy efficient environmental-friendly and hopefully very profitable service for us, to our clients.

And with that, thank you very much.

Operator: Thank you. That does conclude the conference for today. Thank you all for participating. And you may now disconnect.