Dear Investors,

Following the market commentary from the Chairman of the Investment Advisory Board, Martin Haugaard, in December, we believe it is timely to provide an update given the significant developments across our core markets in recent weeks.

Tensions between the United States, Israel, and Iran have increased geopolitical risk in the Middle East, particularly around the Strait of Hormuz. This is a key energy chokepoint, handling around 20% of global oil trade and a meaningful share of LPG volumes.

Traffic through the Strait has been sharply reduced, with activity down significantly compared to pre-conflict levels. While the situation remains uncertain, a prolonged full closure appears unlikely. Iran depends on continued exports through the Strait, and a sustained shutdown would also heavily impact neighboring producers such as Qatar and the UAE.

Even so, the current disruption has already had a clear positive effect on shipping markets. Both LPG and tanker segments have strengthened, with higher freight rates and rising asset values so far in 2026. The main driver is a shift in trade patterns: reduced Middle Eastern exports are being replaced by volumes from alternative regions, particularly the United States. This increases sailing distances to Asia and lifts overall ton-mile demand.

In parallel, the situation is highlighting the limited flexibility in global energy supply. With 20–30% of seaborne LPG and oil flows normally moving through the Strait, replacement options are constrained. As a result, global inventories are being drawn down.

Looking ahead, this sets up a supportive backdrop even beyond the current disruption. Once conditions stabilize, there will be a need to rebuild oil and LPG stocks, which can support tanker and VLGC demand over time. The situation also points to limited global storage capacity, which may drive further investment and strengthen long-term trade flows.

While we hope for a de-escalation, the current environment is constructive for our core segments. Our portfolio is well positioned to benefit from stronger utilization, longer-haul trades, and continued market tightness. We remain focused on staying ahead of developments and capturing opportunities as they arise.

Thank you for your continued trust and partnership.

Martin Haugaard