What happened

Shares of crude oil tanker operator Scorpio Tankers (NYSE: STNG) retreated 15.5% in the first month of the new year, entering January at $4.53 a share but exiting at only $3.83.

So what

So what went wrong? (And given that the stock has given up a further 3% in February, what is still going wrong?)

In four short words: the "Baltic Clean Tanker Index" (BCTI). This index, which tracks average industry rates for chartering "clean" tankers transporting refined petroleum products (as opposed to "dirty" tankers that transport crude oil), has declined 33% since the new year began, falling from 867 points to a recent low of 581 points. With Scorpio Tankers unable to charge as much for its oil-carrying services as it once did, its stock is now in the tank itself.

Oil tanker at sea at sunset.

Is the sun setting on Scorpio Tankers stock? Image source: Getty Images.

Now what

How bad will things get? We'll get our next reading on that question in less than a week, when Scorpio Tankers reports its fiscal Q4 and full-year earnings -- due out on Monday, Feb. 13. Don't get your hopes up for the prospect of an improvement, though.

Analysts who follow Scorpio are warning that the company, which earned $0.21 per share in Q4 2015, will reverse course and report a loss of $0.19 per share for Q4 2016. Full-year earnings ($1.21 per share a year ago) will likewise probably show a loss of $0.06 per share. And full-year revenue is expected to decline 31% year over year, while quarterly results are expected to show a 42% decline -- indicating that things are getting worse, not better, for the company as time goes on.

On the plus side, this creates a lot of room for an upside surprise if Scorpio manages to report results that are simply less awful than Wall Street anticipates. On the downside, few analysts seem to think that scenario will come to pass.

Editor's note: A previous version of this article mistakenly referred to the Baltic Dirty Tanker Index and its accompanying data. The Fool regrets the error.