A. RESERVED
B. CAPITALIZATION AND INDEBTEDNESS
Not applicable.
C. REASONS FOR THE OFFER AND USE OF THE PROCEEDS
Not applicable.
D. RISK FACTORS
If the events discussed in these Risk Factors occur, our business, financial condition, results of operations or cash flows could be materially adversely affected. In such a case, the market price of our common stock
could decline.
Summary of Risk Factors
Risks Relating to our Company
• A contraction or tightening of the global credit markets and the resulting volatility in the financial markets could have a material adverse impact on credit availability, world oil demand and demand for our vessels, which could adversely affect our results of operations, financial condition and cash flows, and could cause the market price of our common stock to decline.
• We may not be able to re-charter or employ our vessels profitably.
• We are dependent on the performance of our charterers and other counterparties.
• We may have difficulty managing growth.
• We may elect to reduce our fleet.
• Restrictive covenants in the secured credit facilities may impose financial and other restrictions on us and our subsidiaries.
• If we fail to comply with certain corporate or ship-specific covenants, including as a result of declining vessel values, or are unable to meet our debt obligations under the secured credit facilities, our lenders could declare their debt to be immediately due and payable and foreclose on our vessels.
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Risks Relating to our Industry
• Vessel values and charter rates are volatile. The highly cyclical nature of the tanker industry may lead to changes in charter rates from time to time, which may adversely affect our earnings, financial condition and results of operations.
• An oversupply of new vessels may adversely affect charter rates and vessel values.
• Political and economic decisions globally, including tariffs and other trade measures, may affect our vessels’ trading patterns and related costs and expenses and could adversely affect our business and operating results.
• Adverse conditions and disruptions in global economies could have a material adverse effect on our business.
• Compliance with environmental laws, regulations or carbon tax regimes and emissions regulation schemes, as well as increasing focus on sustainability and other environmental, social and governance matters, may adversely affect our business.
Risks Relating to our Capital Stock
• The market price of our common stock may be unpredictable and volatile.
• Future sales of our common stock could cause the market price of our common stock to decline.
• The anti-takeover provisions in our amended and restated bylaws may discourage a change of control.
Risks Relating to Taxation
• Certain adverse U.S. federal income tax consequences could arise for U.S. stockholders.
• Our operating income may not qualify for an exemption from U.S. federal income taxation, which will reduce our cash flow.
• We may be subject to taxation in Norway, which could have a material adverse effect on our results of operations and would subject dividends paid by us to Norwegian withholding taxes.
• Recently enacted income tax laws in Bermuda may adversely affect our business, financial condition or results of operations.
RISKS RELATING TO OUR COMPANY
A contraction or tightening of the global credit markets and the resulting volatility in the financial markets could have a material adverse impact on credit availability, world oil demand and demand for our vessels,
which could adversely affect our results of operations, financial condition and cash flows, and could cause the market price of our common stock to decline.
The global financial markets have been highly volatile and the availability of credit from financial markets and financial institutions can vary substantially depending on developments in the global financial markets. While we have seen
improvement in the health of financial institutions and the willingness of financial institutions to extend credit to companies in the shipping industry, there is no guarantee that credit will be available to us going forward. As the shipping
industry is highly dependent on the availability of credit to finance and expand operations, we may be adversely affected by a decline in the global credit and financial markets.
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There is considerable instability in the world economy that could negatively impact the economic environment and our business. The current geopolitical and macroeconomic environment is characterized by, among other factors, inflation, which
caused the U.S. Federal Reserve and other central banks to increase interest rates. Though inflation has come down from the high levels seen in 2022 and 2023, inflation and high interest rates may raise the cost of capital, increase our operating
costs and generally reduce economic growth, disrupting global trade, oil demand and shipping. Concerns over inflation, high interest rates, energy costs, geopolitical issues, including acts of war, and the availability and cost of credit have
contributed to increased volatility and diminished expectations for the economy and the markets going forward. Further, these factors, combined with volatile oil prices and declining business and consumer confidence, have precipitated fears of a
possible economic recession and a tightening in the credit markets, low levels of liquidity in financial markets and volatility in credit and equity markets. Furthermore, a renewal of the financial crisis that affected the banking system and the
financial markets may adversely impact our business and financial condition in ways that we cannot predict. In addition, the uncertainty about current and future global economic conditions caused by a renewed financial crisis may cause our
customers to defer projects in response to tighter credit, decreased cash availability and declining confidence, which may negatively impact the demand for our vessels.
We may not be able to re-charter or employ our vessels profitably, which could materially and adversely affect our business, financial position and cash available for the payment of dividends.
As of December 31, 2025, 10 of our vessels were on time charters with five different charterers. At the expiry of these charters, we may not be able to re-charter our vessels on terms similar to the terms of our existing charters. We may also
employ the vessels on the spot charter market, which is subject to greater rate volatility than the time charter market. If we receive lower charter rates under replacement charters or are unable to re-charter our vessels, our business and
financial position could be materially and adversely affected and the amounts that we have available, if any, to pay distributions to our stockholders may be reduced or eliminated.
We are dependent on performance by our charterers and any failure by the charterers to perform their obligations could materially and adversely affect our business, financial position and cash available for the payment
of dividends.
As of December 31, 2025, 10 of our 22 vessels in operation were on time charters. We are dependent on the performance by the charterers of their obligations under the charters. The ability and willingness of our charterers to perform their
obligations under their charters will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the overall financial condition of the charterer and various expenses. Any failure by
the charterers to perform their obligations could materially and adversely affect our business, financial position and cash available for the payment of dividends.
We may have difficulty managing growth which could materially and adversely affect our business, financial position and cash available for the payment of dividends.
We may grow our fleet by acquiring additional vessels, fleets of vessels or companies owning vessels or by entering into joint ventures in the future. Such future growth will primarily depend on:
• identifying and acquiring vessels, fleets of vessels or companies owning vessels, contracting to build new vessels or entering into joint ventures that meet our requirements, including, but not limited to, price, specification and technical condition;
• consummating acquisitions of vessels, fleets of vessels or companies owning vessels, contracting to build new vessels or acquisitions of companies or joint ventures; and
• obtaining required financing through equity or debt financing on acceptable terms.
We may not be able to acquire newly built or secondhand vessels on acceptable terms, which could impede our growth and negatively impact our financial condition and ability to pay cash dividends. We may not be able to contract for newbuilds or
locate suitable vessels or negotiate acceptable construction or purchase contracts with shipyards and owners, or obtain financing for such acquisitions on economically acceptable terms, or at all.
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Additionally, growing any business by acquisition presents numerous risks, such as undisclosed liabilities and obligations, the possibility that indemnification agreements will be unenforceable or insufficient to cover potential losses and the
difficulties associated with imposing common standards, controls, procedures and policies, obtaining additional qualified personnel, managing relationships with customers and integrating newly acquired assets and operations into existing
infrastructure. We cannot give any assurance that we will be successful in executing any growth plans or that we will not incur significant expenses and losses in connection with any future growth.
We may elect to reduce the size of our fleet which could materially and adversely affect our business, financial position and cash available for the payment of dividends.
We may elect to divest the least energy efficient vessels in our fleet to transition to more energy efficient vessels and technologies, and in order to prepare the Company for future yet unidentified investments. For example, in December 2025
and January 2026, we agreed to sell our three 2007-built VLCCs, the DHT China, DHT Europe and DHT Bauhinia. In January 2026, we took delivery of a newbuild vessel, the DHT Antelope, and in March 2026 we took delivery of the DHT Addax. We expect two
additional newbuilds to be delivered in 2026. If we elect to further reduce the size of our fleet in the future and subsequent investments are delayed or are more costly than anticipated, our business, financial condition and results of operations,
as well as our cash flows, including cash available for dividends to our stockholders, could be materially adversely affected.
Restrictive covenants in the secured credit facilities may impose financial and other restrictions on us and our subsidiaries.
We are a holding company and have no significant assets other than cash and the equity interests in our subsidiaries. Our subsidiaries own all of our vessels. As described in Item 5, our subsidiaries are party to seven secured credit facilities
(the “secured credit facilities”), each secured by mortgages over certain vessels owned by our subsidiaries. The secured credit facilities impose certain operating and financial restrictions on us and our subsidiaries. These restrictions may limit
our and our subsidiaries’ ability to, among other things: pay dividends, incur additional indebtedness, change the management of vessels, permit liens on their assets, sell vessels, merge or consolidate with, or transfer all or substantially all of
their assets to, another person, enter into certain types of charters and enter into a line of business.
Therefore, we may need to seek permission from the lenders under the respective secured credit facilities in order to engage in certain corporate actions. The lenders’ interests may be different from ours and we cannot guarantee that we will be
able to obtain their permission when needed.
If we fail to comply with certain corporate or ship-specific covenants, including as a result of declining vessel values, or are unable to meet our debt obligations under the secured credit facilities, our lenders
could declare their debt to be immediately due and payable and foreclose on our vessels.
Our obligations under the secured credit facilities include financial and operating covenants, both corporate and ship-specific, including requirements to maintain specified “value-to-loan” ratios. Our credit facilities generally require that
the fair market value of the vessels pledged as collateral never be less than 135% of the aggregate principal amount outstanding under the loan. Though we are currently compliant with such ratios under the secured credit facilities, vessel values
have generally experienced significant volatility over the last few years. If vessel values decline meaningfully from current levels, we could be required to make repayments under certain of the secured credit facilities in order to remain in
compliance with the value-to-loan ratios.
If we breach these or other covenants contained in the secured credit facilities or we are otherwise unable to meet our debt obligations for any reason, our lenders could declare their debt, together with accrued interest and fees, to be
immediately due and payable and foreclose on those of our vessels securing the applicable facility, which could result in the acceleration of other indebtedness we may have at such time and the commencement of similar foreclosure proceedings by
other lenders.
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To maintain our carrying capacity, we may enter into newbuilding agreements that subject us to certain risks, and the failure of our counterparties to meet their obligations thereunder could cause us to suffer losses
or otherwise materially and adversely affect our operations, financial condition and cash flows.
From time to time, we enter into newbuilding agreements. Such agreements subject us to counterparty risk. The ability of our counterparties to perform their obligations thereunder will depend on a number of factors that are beyond our control
and may include, among other things, general economic conditions, the overall financial condition of the counterparty and various expenses. Should our counterparties fail to honor their obligations under our future newbuilding agreements, we could
sustain significant losses that could have a material adverse effect on our business, financial condition, results of operations and cash flows. Furthermore, if we are unable to enforce any refund guarantees related to future newbuilding
agreements, we may lose all or part of our advance deposits in the newbuildings, which could have a material adverse effect on our results of operations, financial condition and cash flows.
We cannot assure you that we will be able to refinance our indebtedness incurred under the secured credit facilities which may increase our cost of borrowing or cause us to issue additional equity securities which
could be dilutive to existing shareholders.
In the event that we are unable to service our debt obligations out of our operating activities, we may need to refinance our indebtedness and we cannot assure you that we will be able to do so on terms that are acceptable to us or at all,
especially in the current interest rate environment. The actual or perceived tanker market rate environment and prospects and the market value of our fleet, among other things, may materially affect our ability to obtain new debt financing. If we
are unable to refinance our indebtedness, we may choose to issue securities or sell certain of our assets in order to satisfy our debt obligations.
Fluctuations in interest rates could materially and adversely affect our results of operations and financial condition.
We are exposed to market risk from changes in interest rates because borrowings under our secured credit facilities contain interest rates that fluctuate with the financial markets, and our interest expense is affected by changes in the general
level of interest rates. As of December 31, 2025, all of our obligations under the secured credit facilities bear interest by reference to the Secured Overnight Finance Rate (“SOFR”). Between the start of 2022 to the end of 2023, SOFR increased
from 0.05% to 5.38%, before declining to 3.87% as of year-end of 2025. Any increases in SOFR could materially adversely affect our operating results, financial condition and cash flows, including the cash available for dividends to our
stockholders. While we occasionally use interest rate swaps to partly reduce our exposure to interest rate risk and to hedge a portion of our outstanding indebtedness, there is no assurance that our derivative contracts will provide adequate
protection against adverse changes in interest rates or that our bank counterparties will be able to perform their obligations. For additional information, see “Item 5. Operating and Financial Review and Prospects—Market Risks and Financial Risk
Management” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk”.
A limited number of customers comprise the majority of our revenues. The loss of these customers could materially and adversely affect our business, financial condition, results of operations and cash flows and
consolidation or alliances among these customers will reduce our bargaining power.
Five customers represent the majority of our revenue. In 2023, 2024 and 2025, our five largest customers together represented 61%, 61% and 73 % of our revenue,
respectively. The number of companies which comprise our client base may shrink in the future, which could render us dependent on establishing relationships with new customers to generate a substantial portion of our revenues. The cessation of
business with these companies or their failure to fulfill their obligations under the charters for our vessels could have a material adverse effect on our business, financial condition and results of operations, as well as our cash flows, including
cash available for dividends to our stockholders. Industry consolidations and alliances involving our customers could further increase the concentration of our business and reduce our bargaining power.
Our financial and operating performance was previously adversely affected by COVID-19 and an occurrence of another similar epidemic and related governmental responses may have a material adverse effect on our results
of operations and financial condition.
Our business may be adversely affected by an occurrence of an epidemic that may emerge and any related governmental response. The initial outbreak of COVID-19 resulted in numerous actions taken by governments and governmental agencies in an
attempt to mitigate the spread or any resurgence of the virus, including travel bans, quarantines and other emergency public health measures such as lockdowns. It introduced uncertainty into global economic activity and, as such, our operational
and financial activities. Failure to control the spread of another epidemic could significantly impact economic activity, which could adversely affect our business, financial condition, and results of operations. The occurrence or reoccurrence of
any of the foregoing events or other epidemics, an increase in the severity or duration of epidemics and pandemics or a recession or market correction resulting from the spread of another virus could have a material adverse effect on our future
financial and operating performance.
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The indexes used to calculate the earnings for vessels on index-based charters may, in the future, no longer reasonably reflect the estimated earnings of the vessels.
The indexes used to calculate the earnings for vessels on index-based charters may, in the future, no longer be available or applicable in order to reasonably reflect the estimated earnings of the vessel, due to factors not controlled by us. If
an index used to calculate the earnings for a vessel on an index-based charter incorrectly reflects the earnings potential of a vessel on such charter, this could have an adverse effect on our results of operations and our ability to pay dividends.
As of December 31, 2025, we had two vessels on index-based charters for which the profit sharing element is calculated based on the indexes.
Under the ship management agreements for our vessels, our operating costs could materially increase.
The technical management for all our vessels is carried out by our wholly-owned subsidiary, Goodwood Ship Management Pte. Ltd. (“Goodwood”). As such, we pay the actual cost related to the technical management of our vessels. The amounts that we
have available, if any, to pay distributions to our stockholders could be impacted by any changes in the operating or maintenance costs for our vessels, some of which may be beyond our control.
When a tanker changes ownership or technical management, it may lose customer approvals.
Most users of seaborne oil transportation services will require vetting of a vessel before it is approved to service their account. This represents a risk to our company as it may be difficult to efficiently employ the vessel until such vetting
approvals are in place. Most users of seaborne oil transportation services conduct inspection and assessment of vessels on request from owners and technical managers. Such inspections must be carried out regularly for a vessel to have valid
approvals from such users of seaborne oil transportation services. Whenever a vessel changes ownership or its technical manager, it loses its approval status and must be re-inspected and re-assessed by such users of seaborne oil transportation
services. Increasingly longer voyages in the VLCC trade could make timely vetting inspections challenging and thus could result in vessels not obtaining vetting approvals in time to secure their next employment at market rates.
We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial and other obligations.
We are a holding company and have no significant assets other than cash and the equity of our subsidiaries. Our ability to pay dividends depends on the performance of our subsidiaries and their ability to distribute funds to us. Our ability or
the ability of our subsidiaries to make these distributions are subject to restrictions contained in our subsidiaries’ financing agreements and could be affected by a claim or other action by a third party, including a creditor, or by Marshall
Islands, Monaco, Norway or Singapore law which regulates the payment of dividends by companies. If we are unable to obtain funds from our subsidiaries, we may not be able to pay dividends.
Economic substance laws of the Marshall Islands and Bermuda may adversely impact our business, financial condition or results of operations.
The European Union Code of Conduct Group has assessed the tax policies of a range of countries, including the Marshall Islands, where we and all of our vessel-owning subsidiaries, including the subsidiaries related to the newbuilding contracts
as described in “Item 4. Information on the Company”, are incorporated, and Bermuda (together with the Marshall Islands, the “Economic Substance Jurisdictions”), where our principal executive offices are located.
On January 1, 2019, the Marshall Islands enacted the Economic Substance Regulations, 2018 (the “Marshall Islands ESR”) and Bermuda enacted the Economic Substance Act 2018 (as amended) (the “Bermuda ESA” and, together with the Marshall Islands
ESR, the “Economic Substance Laws”).
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The Economic Substance Laws generally require companies that are registered in the applicable Economic Substance Jurisdiction and carrying on one or more “relevant activities” to maintain a substantial economic presence in such Economic
Substance Jurisdiction. The list of “relevant activities” includes, among other business activities, shipping business, headquarters business and holding company business. The Company intends to comply with relevant Economic Substance Laws;
however, it is difficult to predict the outcome of any review by the authorities as to whether we have correctly interpreted the requirements. Failure to comply with relevant Economic Substance Laws in each Economic Substance Jurisdiction may
subject us to certain monetary penalties and, solely with respect to the Marshall Islands ESR, revocation of the formation documents and dissolution of the applicable non-compliant Marshall Islands entity. Accordingly, any implementation of, or
changes to, any of the Economic Substance Laws that impact us could increase the complexity and costs of carrying on business in these jurisdictions, and thus could adversely affect our business, financial condition or results of operations.
A cyberattack could lead to a material disruption of our IT systems and the loss of business information, which may hinder our ability to conduct our business effectively and may result in lost revenues and additional
costs.
Parts of our business depend on the secure operation of our computer systems to manage, process, store and transmit information. Like other global companies, we have, from time to time, experienced threats to our data and systems, including
malware and computer virus attacks, internet network scans, systems failures and disruptions. A cyberattack that bypasses our IT security systems, causing an IT security breach, could lead to a material disruption of our IT systems, adversely
impact our daily operations and cause the loss of sensitive information, including our own proprietary information and that of our customers, suppliers and employees. Such losses could harm our reputation and result in competitive disadvantages,
litigation, regulatory enforcement actions, lost revenues, additional costs and liability. While we devote substantial resources to maintaining adequate levels of cybersecurity, our resources and technical sophistication may not be adequate to
prevent all types of cyberattacks.
Furthermore, any changes in the nature of cyber threats might require us to adopt additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. War, terrorism and geopolitical conflicts
could be accompanied by cyberattacks against instruments of the government and/or cyberattacks on surrounding countries. It is possible that such attacks could have collateral effects on additional critical infrastructure and financial institutions
globally, which could hinder our ability to conduct our business effectively and adversely impact our revenues. It is difficult to assess the likelihood of such threat and any potential impact at this time.
RISKS RELATING TO OUR INDUSTRY
Our results of operations and financial condition depend significantly on charter rates for VLCC vessels, which may be highly volatile and are based on macroeconomic factors outside of our control. If we cannot charter
or sell our vessels on favorable terms, there could be a material adverse effect on our earnings and our ability to comply with our loan covenants.
The tanker industry historically has been highly cyclical. If the tanker industry is depressed at a time when we may charter or sell a vessel, our earnings and available cash flow may decrease. Our ability to charter our vessels and the charter
rates payable under any new charters will depend upon, among other things, the conditions in the tanker market at that time. Fluctuations in charter rates and vessel values result from changes in the supply and demand for tanker capacity and
changes in the supply and demand for oil and oil products.
Additionally, as of the date of this report, 12 of our vessels operate in the spot market, which exposes us to the fluctuations in spot market rates. The spot market is highly competitive, and rates within this market are subject to volatile
fluctuations. For example, in reaction to recent sanctions and sanctions enforcement, the spot market experienced immediate and significant fluctuations, and we may not be able to predict whether future spot rates will be sufficient to enable our
vessels to be operated profitably.
Factors affecting the supply and demand for tankers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable and may adversely affect the values of our vessels and result in significant
fluctuations in the amount of revenue we earn, which could result in significant fluctuations in our quarterly or annual results.
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The factors that influence the demand for tanker capacity include:
• demand for oil and oil products, which affects the need for tanker capacity;
• global and regional economic and political conditions which, among other things, could impact the supply of oil as well as trading patterns and the demand for various types of vessels;
• changes in the production of crude oil, particularly by OPEC and other key producers, which could impact the need for tanker capacity;
• developments in international trade, protectionism and other trade policies, and market fragmentation or consolidation;
• changes in seaborne and other transportation patterns, including changes in the distances that cargoes are transported;
• environmental concerns and other legal and regulatory developments;
• international sanctions, embargoes, import and export restrictions, nationalizations and wars;
• weather; and
• competition from alternative sources of energy.
The factors that influence the supply of tanker capacity include:
• the number of newbuilding orders and deliveries;
• technological advances in tanker design and capacity;
• the availability of financing for new vessels and shipping activity;
• the scrapping rate of older vessels;
• the number of vessels that are restricted due to sanctions;
• fragmentation or consolidation of the fleet ownership or operational control;
• the number of vessels that are out of service; and
• environmental and maritime regulations.
Additionally, the effective supply of tankers has been impacted in recent years by the impact of sanctions and trade pattern disruptions, including vessels currently continuing to reroute away from the Strait of Hormuz, Red Sea, Gulf of Aden and
Suez Canal due to attacks on ships. These factors resulted in fleet inefficiencies and support for tanker charter rates, which may not continue.
An oversupply of new vessels may adversely affect charter rates and vessel values, which may have a material adverse effect on our results of operations and financial condition.
If the carrying capacity of new ships delivered exceeds the capacity of tankers being removed from the fleet, total transportation capacity will increase. As of March 13, 2026, the newbuilding orderbook for VLCC vessels equaled 22.2% of the
existing trading fleet. However, we cannot assure you that the orderbook will not increase further relative to the size of the current fleet. If the supply of tanker capacity increases and the demand for tanker capacity does not increase
correspondingly, charter rates could decline and the value of our vessels could be adversely affected.
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Political and economic decisions globally, including the effects of tariffs and other trade measures, may affect our vessels’ trading patterns and could adversely affect our business and operating results.
Our vessels are trading globally, and the operation of our vessels is therefore exposed to political and economic risks across multiple jurisdictions. Most recently, the escalating military conflict between the U.S., Israel and Iran and the
related attacks on vessels effectively shutdown of the Strait of Hormuz, forcing companies to reroute their vessels to avoid the waterway. Similarly, seizures and attacks on commercial vessels in the Red Sea, the Gulf of Aden, the Persian Gulf and
the Arabian Sea have impacted seaborne trade as many companies have decided to reroute vessels to avoid the Suez Canal and the Red Sea. Such conflicts have raised concerns of long-term supply disruption.
Trade tensions between the U.S. and China, in particular, remain high, and have escalated in recent periods. In early 2025, the Office of the U.S. Trade Representative (“USTR”) determined to impose additional port fees targeting China’s
maritime, logistics and shipbuilding sectors. The U.S. port fees went into effect on October 14, 2025, and were structured to impact certain Chinese-linked vessels that call at U.S. ports. In response to the U.S. port fees, China’s Ministry of
Transport announced parallel Chinese port fees on vessels that call at Chinese ports and are deemed to have a U.S. nexus, including vessels that are owned, operated or controlled by U.S. persons and vessels associated with enterprises in which U.S.
persons directly or indirectly hold 25% or more of equity, voting rights or board seats. On November 10, 2025, U.S. and Chinese authorities suspended the application of each respective set of port fees for one year. There is substantial uncertainty
as to how the port fees will be assessed after the end of the suspension period. As we are a U.S.-listed, widely held public company, there is a risk that we could be subject to the port fees or similar measures should they go into effect following
the end of the suspension period, which could lead to added operating costs and adversely affect our results of operations, financial condition and cash flows.
Further, on February 13, 2026, the second Trump administration released its Maritime Action Plan (the “MAP”) focused on reviving the U.S. shipping sector. Notably, the MAP proposes a “universal infrastructure or security fee,” which would apply
more broadly than the USTR special port fees and would cover all internationally built vessels calling at U.S. ports. While specific figures have yet to be determined, the fees would be assessed on the weight of the imported tonnage arriving on the
vessel. Currently, the MAP represents a policy plan for the administration, and it is unclear whether any of the initiatives contained therein will ultimately result in binding law or regulation. Given the uncertainties surrounding the
implementation and potential magnitude of these proposed fees, as well as any retaliatory measures that other countries may adopt in response, the impact of such measures on our business is difficult to assess at this time.
Additionally, the second Trump administration has imposed and may continue to impose additional tariffs on imports from Canada, Mexico and China and has announced plans to impose tariffs on imports from the European Union (the “EU”). Hostilities
between Russia and Ukraine and between Israel and Hamas and related conflicts in the Middle East, in addition to the sanctions announced by the United States and several European countries against Russia and any forthcoming sanctions may also
adversely impact our business, given Russia’s role as a major global exporter of crude oil. The United States has implemented the Russian Foreign Harmful Activities Sanctions program, which includes prohibitions on the import of certain Russian
energy products into the United States, including crude oil, petroleum, petroleum fuels, oils, liquefied natural gas and coal, as well as prohibitions on all new investments in Russia by U.S. persons, among other restrictions. Furthermore, the
United States has also prohibited a variety of specified services related to the maritime transport of Russian Federation origin crude oil and petroleum products, including trading/commodities brokering, financing, shipping, insurance (including
reinsurance and protection and indemnity), flagging, and customs brokering. These prohibitions took effect on December 5, 2022 with respect to the maritime transport of crude oil, and on February 5, 2023 with respect to the maritime transport of
other petroleum products. An exception exists to permit such services when the price of the seaborne Russian oil does not exceed the relevant price cap. Violations of the price cap policy or the risk that information, documentation, or attestations
provided by parties in the supply chain are later determined to be false may pose additional risks that may adversely affect our business. Our business could be harmed by trade tariffs, as well as any trade embargoes or other economic sanctions by
the United States or other countries against countries in the Middle East, Asia, Russia or elsewhere as a result of terrorist attacks, hostilities or diplomatic or political pressures that limit trading activities with those countries.
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The Israel-Hamas conflict, the conflict between the U.S., Israel and Iran and related conflicts in the Middle East, and the vessel attacks in the Strait of Hormuz and the Red Sea have also created additional concerns for the stability of the
supply of oil as the conflicts could broaden or escalate. The geopolitical environment is evolving and continues to be uncertain as new developments arise, and any such changes may have direct or indirect impacts on us. Geopolitical risks are
outside of our control and could potentially limit or disrupt our access to markets and operations and may have an adverse effect on our business.
We operate our ships worldwide, which means adverse conditions and disruptions in the global economy could have a material adverse effect on our business.
Our business can be affected by a number of factors that are beyond our control, such as general geopolitical, economic and business conditions. The world economy is subject to downside economic risks stemming from factors such as high
inflation, energy costs, fiscal fragility in advanced economies, monetary tightening in certain advanced and emerging economies, high sovereign, corporate and private debt levels, highly accommodative macroeconomic policies and increased volatility
in debt and equity markets as well as in the price of fuel and other commodities. Adverse conditions and disruptions in the global economy, particularly the U.S. economy, European economies, and Asian economies, may lead to weaker demand for our
services and have a material adverse effect on our business.
In recent years, Asia has emerged as the most important region for demand of oil and oil transportation. However, if China’s growth in gross domestic product and in industrial production slows and other countries in the Asia Pacific region
experience slower or negative economic growth in the future, this may negatively affect the global economy, and thus, may negatively impact shipping demand. In addition, the continued global trade war between the U.S. and China, including the
introduction by the U.S. of tariffs on selected imported goods, mainly from China, may provoke further retaliation measures from the affected countries which has the potential to create new impediments to trade. Furthermore, trade friction could
increase the volatility in the foreign exchange markets which could also negatively affect global trade. Such volatile economic conditions could have a material adverse effect on our business.
In addition, the structural issues facing the EU following the United Kingdom’s June 2016 referendum to withdraw from the EU (commonly referred to as “Brexit”) remain, and problems could resurface that could affect financial market conditions,
and, possibly, our business, results of operations, financial condition and liquidity, particularly if they lead to the exit of one or more countries from the European Monetary Union (the “EMU”) or the exit of additional countries from the EU. If
one or more countries exited the EMU, there would be significant uncertainty with respect to outstanding obligations of counterparties and debtors in any exiting country, whether sovereign or otherwise, and it would likely lead to complex and
lengthy disputes and litigation. The partial or full breakup of the EMU or EU would be unprecedented and its impact highly uncertain, including with respect to our business.
Compliance with environmental laws or regulations, as well as increasing focus on sustainability and other environmental, social and governance matters, may adversely affect our business.
Our operations are affected by extensive and changing international, national and local environmental protection laws, carbon tax regimes and emissions regulation schemes, regulations, treaties, conventions and standards in force in
international waters, the jurisdictional waters of the countries in which our vessels operate, as well as the countries of our vessels’ registration. Many of these requirements are designed to reduce the risk of oil spills and other pollution, and
our compliance with these requirements can be costly.
These requirements can affect the resale value or useful lives of our vessels, require a reduction in carrying capacity, ship modifications or operational changes or restrictions, lead to decreased availability of insurance coverage for
environmental matters or result in the denial of access to certain jurisdictional waters or ports, or detention in certain ports. Under local, national and foreign laws, as well as international treaties and conventions, we could incur material
liabilities, including cleanup obligations, in the event that there is a release of petroleum or other hazardous substances from our vessels or otherwise in connection with our operations. We could also become subject to personal injury or property
damage claims relating to the release of or exposure to hazardous materials associated with our current or historic operations, as well as claims by governmental authorities or other trustees for natural resource damages. Violations of, or
liabilities arising under, environmental regulations may result in substantial penalties, fines and other sanctions, including in certain instances, seizure or detention of our vessels. For example, the OPA affects all vessel owners shipping oil
to, from or within the U.S. The OPA allows for potentially unlimited liability without regard to fault for owners, operators and bareboat charterers of vessels for oil pollution in U.S. waters. The OPA expressly permits individual states to impose
their own liability regimes with regard to hazardous materials and oil pollution incidents occurring within their borders, coasts and territorial seas. Coastal states in the U.S. have enacted pollution prevention liability and response laws, many
providing for unlimited liability for entities found responsible for pollution. Similarly, the International Convention on Civil Liability for Oil Pollution Damage, 1969, as amended, which has been adopted by most countries outside of the U.S.,
imposes liability for oil pollution in international waters.
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Due to concern over the risks of climate change, a number of countries and the IMO have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas (“GHG”) emission and other emissions from ships. These regulatory
measures may include adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for implementation of new technologies. On November 1, 2022, carbon intensity measures came into force that require
ships to calculate their Energy Efficiency Index (“EEXI”), which indicates a ship’s efficiency compared to a specified baseline, and their annual operational Carbon Intensity Indicator (“CII”) and CII rating. The EEXI could require us to implement
certain additional operational or technical steps, such as speed and power limitations or installations of technical features, to improve the energy efficiency of our ships. The CII rating is on a scale from A to E, with E as the lowest score. If
our ships rate D for three consecutive years or E for a single year, they must develop corrective action plans to achieve the required annual operational CII. Such plans may include capital expenditures and investments for our ships to stay in
compliance. In July 2023, the IMO adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships, a framework for Member States that provides new emissions reduction goals and guidance. At its meeting in April 2025, the Marine Environment
Protection Committee (“MEPC”) approved the IMO net-zero framework, including the new fuel standard for ships and a global GHG emission pricing mechanism for emissions. However, at the October 2025 MEPC meeting, the Committee did not adopt these
previously approved measures. As a result, it is currently uncertain when, or if, the IMO net-zero framework will be adopted by a sufficient number of Member States to enter into force as a mandatory regulation with which our vessels would be
required to comply. If these measures go into effect, we may need to incur additional capital expenditures to achieve compliance with the relevant requirements. In addition, although emissions of greenhouse gases from international shipping are not
currently subject to agreements under the United Nations Framework Convention on Climate Change, such as the “Kyoto Protocol” and the “Paris Agreement,” a new treaty may be adopted in the future that includes additional restrictions on shipping
emissions beyond those already adopted under the International Convention for the Prevention of Marine Pollution from Ships, or the “MARPOL Convention.” Compliance with pending or future changes in laws and regulations relating to climate change
and GHG emissions could increase the costs of operating and maintaining our ships and could require us to invest in new equipment to be installed onboard, acquire allowances or pay taxes related to our greenhouse gas emissions, as well as impact
revenue generation and strategic growth opportunities.
In addition, in connection with our compliance with the OPA, IMO regulations, EU directives or other existing laws and regulations or those that may be adopted in the future, we may incur significant additional costs in meeting new maintenance
and inspection requirements, developing contingency arrangements for potential spills and obtaining insurance coverage. Government regulation of vessels, particularly in the areas of safety and environmental requirements and climate change, can be
expected to become more strict in the future and require us to incur significant capital expenditures for our vessels to keep them in compliance, or even to scrap or sell certain vessels altogether. For example, in 2017, the U.S. and the IMO
enacted ballast water discharge standards that required the installation of ballast water treatment systems in existing ships by September 8, 2024, which has increased compliance costs for us and other similarly regulated ocean carriers. In the
past, the IMO and EU accelerated non-double-hull phase-out schedules in response to highly publicized oil spills and other shipping incidents involving companies unrelated to us. Although all of our tankers are double-hulled and have ballast water
treatment systems installed, future environmentally-damaging accidents can be expected in the industry, and such accidents or other events could result in the adoption of even stricter laws and regulations, which could limit our operations or our
ability to do business and therefore could have a material adverse effect on our business and financial results.
Even in the absence of climate change legislation and regulations, our business and operations may be materially affected as a result of weather events and climate change. Moreover, companies across all industries, including shipping and
transportation, are facing increasing scrutiny relating to sustainability and other environmental, social and governance policies, practices and performance. For example, long-term concerns over climate change have resulted in an increased focus on
the environmental footprint of the energy and transportation sectors from regulators, shareholders, lending banks, customers, environmental groups and other stakeholders and could lead to a decrease in oil and gas demand or contribute to a negative
perception of the oil and gas industry, which could impact our ability to attract investors, access financing and capital markets and attract and retain talent. This increasing scrutiny also could require us to implement additional relevant
practices or standards or otherwise incur additional costs, which could have a material adverse effect on our business, financial condition and results of operations.
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Terrorist attacks, international hostilities and the emergence or continuation of a global public health threat could affect the demand for oil transportation, which could adversely affect our business.
Terrorist attacks, the outbreak or threat of war, the existence of international hostilities, or the emergence or continuation of a global public health threat or pandemic crisis, such as COVID-19, could damage the global economy, adversely
affect the availability of and demand for crude oil and petroleum products and adversely affect our ability to employ our vessels. We conduct our operations internationally, and our business, financial condition and results of operations may be
adversely affected by trade wars and changing economic, political and government conditions in or between the countries and regions in which our vessels are employed. Moreover, we operate in a sector of the economy that is likely to be adversely
impacted by political instability, terrorist or other attacks, war or international hostilities.
The ongoing conflict between Russia and Ukraine, the conflict between Israel and Hamas, the conflict between the U.S., Israel and Iran and related conflicts in the Middle East and the seizures and attacks on commercial vessels in the Strait of
Hormuz, Red Sea, the Gulf of Aden, the Persian Gulf and the Arabian Sea, for example, may lead to further regional and international conflicts or armed action. Such conflicts have disrupted and may continue to disrupt supply chains and cause
instability in the global economy. Additionally, the ongoing conflict in Ukraine could result in the imposition of further economic sanctions by the United States and the European Union against Russia. While much uncertainty remains regarding the
global impact of the conflict between Russia and Ukraine, the conflict between Israel and Hamas, the conflict between the U.S., Israel and Iran and related conflicts in the Middle East, and the attacks on commercial ships in the Strait of Hormuz
and the Red Sea, it is possible that such tensions and others that may arise could adversely affect our business, financial condition, results of operation and cash flows. Furthermore, it is possible that third parties with whom we have charter
contracts may be impacted by the conflict between Russia and Ukraine, the conflict between Israel and Hamas, the conflict between the U.S., Israel and Iran and related conflicts in the Middle East and the attacks on commercial ships in the Strait
of Hormuz and the Red Sea, which could adversely affect our operations. Additionally, other conflicts and public health threats may arise on a global or regional scale and affect the demand for oil transportation, which could adversely affect our
business.
Acts of piracy on ocean-going vessels could adversely affect our business and results of operations.
Acts of piracy have historically affected vessels operating in regions of the world, such as the Gulf of Aden off the coast of Somalia, the Arabian Sea, the Red Sea, the Gulf of Guinea in West Africa, and the South China Sea, among others.
According to the International Maritime Bureau (IMB), a non-profit organization that aims to tackle maritime crime and malpractice, global maritime incidents and piracy increased in 2025, with 137 incidents recorded compared to 116 in 2024 and 120
in 2023. The seizures and attacks on commercial vessels in the Red Sea, the Gulf of Aden, the Persian Gulf and the Arabian Sea have impacted seaborne trade, as many companies have rerouted vessels to avoid the Suez Canal and Red Sea, raising
concerns about supply disruption. If piracy activity results in regions in which our vessels operate being designated as “war risk” zones by insurers, premiums for such coverage could increase significantly and may become more difficult to obtain.
Crew-related costs, including expenses associated with onboard security personnel, could also increase. We may not be adequately insured to cover losses arising from such incidents, including payment of any ransom we may be forced to make, which
could have a material adverse effect on us. Additionally, these events could lead to reduced revenues, increased costs, and decreased cash flows to our customers, potentially impairing their ability to meet payment obligations under our charters.
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Our vessels may call on ports located in countries that are subject to restrictions imposed by the governments of the U.S., the United Nations (the “UN”) or the EU, which could negatively affect the trading price of
our shares of common stock.
From time to time on charterers’ instructions, our vessels have called and may again call on ports located in countries subject to sanctions and embargoes imposed by the U.S. government, the UN or the EU, and countries identified by the U.S.
government, the UN or the EU as state sponsors of terrorism. The U.S., UN and EU sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such
sanctions and embargo laws and regulations may be amended, strengthened, or lifted over time. For example, in 2010, the U.S. enacted the Comprehensive Iran Sanctions, Accountability, and Divestment Act, or “CISADA,” which expanded the scope of the
Iran Sanctions Act (as amended, the “ISA”) by amending existing sanctions under the ISA and creating new sanctions. Among other things, CISADA introduced additional prohibitions and limits on the ability of companies (both U.S. and non-U.S.) and
persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products. In 2011, the President of the United States issued Executive Order 13590, which expanded on the
existing energy-related sanctions available under the ISA. In 2012, the President signed additional relevant executive orders, including Executive Order 13608, which prohibits foreign persons from violating or attempting to violate, or causing a
violation of, any sanctions in effect against Iran or facilitating any deceptive transactions for or on behalf of any person subject to U.S. sanctions. The Secretary of the Treasury may prohibit any transactions or dealings, including any U.S.
capital markets financing, involving any person found to be in violation of Executive Order 13608. Also in 2012, the U.S. enacted the Iran Threat Reduction and Syria Human Rights Act of 2012 (the “ITRA”) which again created new sanctions and
strengthened existing sanctions under the ISA. Among other things, the ITRA intensifies existing sanctions regarding the provision of goods, services, infrastructure or technology to Iran’s petroleum or petrochemical sector. The ITRA also includes
a provision requiring the President of the United States to impose five or more sanctions from Section 6(a) of the ISA on a person the President determines is a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a
vessel that was used to transport crude oil from Iran to another country and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the person otherwise owns, operates, or
controls, or insures the vessel, the person knew or should have known the vessel was so used. Such a person could be subject to a variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to
U.S. jurisdiction, and exclusion of that person’s vessels from U.S. ports for up to two years. The ITRA also includes a requirement that issuers of securities must disclose to the SEC in their annual and quarterly reports filed after February 6,
2013 if the issuer or “any affiliate” has “knowingly” engaged in certain sanctioned activities involving Iran during the time frame covered by the report. At this time, we are not aware of any such sanctionable activity, conducted by ourselves or
by any affiliate that is likely to prompt an SEC disclosure requirement.
In January 2013, the U.S. enacted the Iran Freedom and Counter-Proliferation Act of 2012 (the “IFCPA”), which expanded the scope of U.S. sanctions on any person that is part of Iran’s energy, shipping or shipbuilding sector and operators of
ports in Iran, and imposes penalties on any person who facilitates or otherwise knowingly provides significant financial, material, technological or other support to these entities. On November 24, 2013, the P5+1 (the U.S., United Kingdom, Germany,
France, Russia and China) entered into an interim agreement with Iran entitled the “Joint Plan of Action” (the “JPOA”). Under the JPOA, it was agreed that, in exchange for Iran taking certain voluntary measures to ensure that its nuclear program is
used only for peaceful purposes, the U.S. and EU would voluntarily suspend certain sanctions for a period of six months. On January 20, 2014, the U.S. and EU indicated that they would begin implementing the temporary relief measures provided for
under the JPOA. These measures include, among other things, the suspension of certain sanctions on the Iranian petrochemicals, precious metals, and automotive industries from January 20, 2014 until July 20, 2014. At the end of the six-month period,
when no agreement between Iran and the P5+1 could be reached, the measures were extended for a further six months to November 24, 2014, on which date the parties affirmed that they would continue to implement the measures through June 30, 2015. On
July 14, 2015, the P5+1 and EU entered into a Joint Comprehensive Plan of Action (“JCPOA”) with Iran. Under the JCPOA, it was agreed that, in exchange for Iran taking certain voluntary measures to ensure that its nuclear program is used only for
peaceful purposes, certain sanctions would be lifted on the Iranian petrochemicals, precious metals, and automotive industries. The parties affirmed that the JPOA’s temporary relief measures would remain in effect until the date that Iran
implemented certain nuclear-related commitments described in the JCPOA (“Implementation Day”). On October 18, 2015, the JCPOA came into effect and participants began taking steps necessary to implement their JCPOA commitments. On January 16, 2016,
the International Atomic Energy Agency verified that Iran implemented key nuclear-related commitments described in the JCPOA, and, in accordance with the JCPOA, that day was deemed Implementation Day, and the JPOA ceased to be in effect. As a
result, the following sanctions were lifted on Implementation Day: (1) U.S. nuclear-related sanctions described in sections 17.1 to 17.2 of Annex V of the JCPOA, (2) EU nuclear-related sanctions described in section 16 of Annex V of the JCPOA and
(3) the UN Security Council Resolutions 1696, 1737, 1747, 1803, 1835, 1929 and 2224. On May 8, 2018, the United States announced its withdrawal from the JCPOA. U.S. nuclear-related sanctions that had been lifted on Implementation Day were
reinstated in two phases and became effective on August 7, 2018 and November 5, 2018, respectively. In 2019, the United States imposed sanctions on Iran’s iron, steel, aluminum and copper sectors, and on Iran’s Supreme Leader and other senior
Iranian government officials. In 2020, additional sanctions were imposed on Iran’s construction, mining, manufacturing and textiles sectors, as well as transfers to and from Iran of conventional arms or military equipment. Finally, certain or
future counterparties of ours may be affiliated with persons or entities that are the subject of sanctions imposed by the U.S. and EU or other international bodies as a result of the annexation of Crimea by Russia in March 2014 and Russia’s
invasion of Ukraine in February 2022.
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During 2025, 2024 and 2023, no vessels in our fleet made any calls to ports in Iran. During 2018, prior to the reinstatement of U.S. nuclear-related sanctions described above, vessels in our fleet made a total of two calls to ports in Iran,
representing 0.27% of our 741 calls on worldwide ports during the same period. During 2017, when the JPOA was not in effect, and thus the corresponding nuclear-related sanctions described above had been lifted in connection with Implementation Day,
vessels in our fleet made a total of four calls to ports in Iran, representing 0.56% of our 707 calls on worldwide ports during the same period. During 2016, when the JPOA was not in effect, and thus the corresponding nuclear-related sanctions
described above had been lifted in connection with Implementation Day, vessels in our fleet made a total of three calls to ports in Iran, representing 0.48% of our 629 calls on worldwide ports during the same period. Prior to 2016, the last call to
a port in Iran made by a vessel in our fleet was in January 2012. The port calls made to ports in Iran in 2018, 2017 and 2016 were made at the direction of the time charterer of the vessels. Prior to making port calls to Iran, the charterer is
required to conduct a due diligence to ensure that the port calls are in compliance with applicable sanctions against Iran. To our knowledge, none of our vessels made port calls to Syria, Sudan, Cuba or the Crimea Region during the period from 2011
to 2025.
We monitor compliance of our vessels with applicable restrictions through, among other things, communication with our charterers and administrators regarding such legal and regulatory developments as they arise. Although we believe that we are
in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear
and may be subject to changing interpretations. Any such violation could result in fines or other penalties and could result in some investors deciding, or being required, to divest their interest, or not to invest, in our company. Additionally,
some investors may decide to divest their interest, or not to invest, in our company simply because we do business with companies that do business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws
and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. Investor perception of the value of our common stock may also be adversely affected by the
consequences of war, the effects of terrorism, civil unrest or governmental actions in these and surrounding countries.
Failure to comply with the U.S. Foreign Corrupt Practices Act and other anti-bribery legislation in other jurisdictions could result in fines, criminal penalties, contract terminations and an adverse effect on our
business.
We operate in a number of countries throughout the world, including some countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of
business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the “FCPA.” We are subject, however, to the risk that we, our affiliated entities or our or their respective officers,
directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil or criminal penalties, curtailment of operations
in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting,
investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our management.
Vessel values may be depressed at a time when we sell a vessel, when our subsidiaries are required to make a repayment under the secured credit facilities or when the secured credit facilities mature, which could
adversely affect our liquidity and our ability to refinance the secured credit facilities.
Tanker values have generally experienced high volatility. Investors can expect the fair market value of our tankers to fluctuate, depending on general economic and market conditions affecting the tanker industry and competition from other
shipping companies, types and sizes of vessels and other modes of transportation. In addition, as vessels age, they generally decline in value. These factors will affect the value of our vessels for purposes of covenant compliance under the secured
credit facilities and at the time of any vessel sale. If for any reason we sell a tanker at a time when tanker prices have fallen, the sale may be at less than the tanker’s carrying amount on our financial statements, with the result that we would
also incur a loss on the sale and a reduction in earnings and surplus, which could reduce our ability to pay dividends.
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In the event of the sale or loss of a vessel, certain of the secured credit facilities require us and our subsidiaries to prepay the facility in an amount proportionate to the market value of the sold or lost vessel compared with the total
market value of all of our vessels financed under such credit facility before such sale or loss. If vessel values are depressed at such a time, our liquidity could be adversely affected as the amount that we and our subsidiaries are required to
repay could be greater than the proceeds we receive from a sale. In addition, declining tanker values could adversely affect our ability to refinance our secured credit facilities as they mature, as the amount that a new lender would be willing to
lend on the same terms may be less than the amount we owe under the expiring secured credit facilities.
The carrying values of our vessels may not represent their charter-free market value at any point in time. The carrying values of our vessels held and used by us are reviewed for potential impairment whenever events or changes in circumstances
indicate that the carrying value of a particular vessel may not be fully recoverable.
We operate in the highly competitive international tanker market and may not be able to compete effectively or operate profitably, which could affect our financial position.
The operation of tankers and transportation of crude oil are extremely competitive. Competition arises primarily from other tanker owners, including major oil companies or state-owned entities that control vessels, as well as independent tanker
companies, some of whom have substantially larger fleets and substantially greater resources than we do. Competition for the transportation of oil and oil products can be intense and depends on price, location, size, age, condition and the
acceptability of the tanker and its operators to charterers. We will have to compete with other tanker owners, including major oil companies or state-owned entities that control vessels and independent tanker companies, for charters. Due in part to
the fragmented tanker market, competitors with greater resources may be able to offer better prices than us, which could result in our achieving lower revenues from our vessels.
The shipping industry has inherent operational risks, which could impair the ability of charterers to make payments to us and which may have a material adverse effect on our results of operations and financial
condition.
Events such as marine disasters or casualties, bad weather, mechanical failures, human error, war, terrorism, piracy, environmental accidents and other circumstances or events could result in loss of life or harm to persons, loss of property or
damage to our tankers and their cargos. In addition, transporting crude oil across a wide variety of international jurisdictions creates a risk of business interruptions due to political circumstances in foreign countries, hostilities, labor
strikes and boycotts, the potential for changes in tax rates or policies, and the potential for government expropriation of our vessels. Further, our business operations could be negatively impacted by future epidemics, which could interrupt our
business operations and ability to execute our services. Any of these events could impair the ability of charterers of our vessels to make payments to us under our charters.
Our insurance coverage may be insufficient to make us whole in the event of a casualty to a vessel or other catastrophic event, or fail to cover all of the inherent operational risks associated with the tanker
industry.
In the event of a casualty to a vessel or other catastrophic event, we will rely on our insurance to pay the insured value of the vessel or the damages incurred, less the agreed deductible that may apply. Our wholly owned subsidiaries will be
responsible for arranging insurance against those risks that we believe the shipping industry commonly insures against, and we are responsible for the premium payments on such insurance. This insurance includes marine hull and machinery insurance,
protection and indemnity insurance, which includes pollution risks and crew insurance, and war risk insurance. We may also enter into loss of hire insurance, in which our wholly owned subsidiaries are responsible for arranging such loss of hire
insurance, and we are responsible for the premium payments on such insurance. This insurance generally provides coverage against business interruption for periods of more than 60 days per incident (up to a maximum of 180 days per incident) per
year, following any loss under our hull and machinery policy. We will not be reimbursed under the loss of hire insurance policies, on a per incident basis, for the first 60 days of off-hire. Currently, the amount of coverage for liability for
pollution, spillage and leakage available to us on commercially reasonable terms through protection and indemnity associations and providers of excess coverage is $1 billion per vessel per occurrence. We cannot assure you that we will be adequately
insured against all risks. If insurance premiums increase, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet. Additionally, our insurers may refuse to pay particular claims. Any significant loss or liability
for which we are not insured could have a material adverse effect on our financial condition. In addition, the loss of a vessel would adversely affect our cash flows and results of operations.
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Maritime claimants could arrest our tankers, which could interrupt charterers’ or our cash flow.
Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against that vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien-holder may
enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt the charterers’ or our cash flow and require us to pay a significant amount of money to have the arrest
lifted. In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel that is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel
owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one vessel in our fleet for claims relating to another vessel in our fleet.
Governments could requisition our vessels during a period of war or emergency without adequate compensation which could have a material adverse effect on our results of operations and financial condition.
A government could requisition one or more of our vessels for title or for hire. Requisition for title occurs when a government takes control of a vessel and becomes her owner, while requisition for hire occurs when a government takes control of
a vessel and effectively becomes her charterer at dictated charter rates. Generally, requisitions occur during periods of war or emergency, although governments may elect to requisition vessels in other circumstances. Although we would be entitled
to compensation in the event of a requisition of one or more of our vessels, the amount and timing of payment would be uncertain. Government requisition of one or more of our vessels may negatively impact our revenues and reduce the amount of cash
we have available for distribution as dividends to our stockholders.
RISKS RELATING TO OUR CAPITAL STOCK
The market price of our common stock may be unpredictable and volatile.
The market price of our common stock may fluctuate due to factors such as actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry, mergers and strategic alliances in the tanker
industry, market conditions in the tanker industry, changes in government regulation, shortfalls in our operating results from levels forecast by securities analysts, announcements concerning us or our competitors and the general state of the
securities market. The tanker industry has been unpredictable and volatile. The market for common stock in this industry may be equally volatile. Therefore, we cannot assure you that you will be able to sell any of our common stock you may have
purchased at a price greater than or equal to the original purchase price.
Future sales of our common stock could cause the market price of our common stock to decline and would be dilutive to existing shareholders.
The market price of our common stock could decline due to sales of our shares in the market or the perception that such sales could occur. This could depress the market price of our common stock and make it more difficult for us to sell equity
securities in the future at a time and price that we deem appropriate, or at all. The sale of additional common stock would result in dilution to our existing stockholders.
The anti-takeover provisions in our amended and restated bylaws may discourage a change of control.
Our amended and restated bylaws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. These provisions provide for:
• a classified board of directors with staggered three-year terms, elected without cumulative voting;
• removal of directors only for cause and with the affirmative vote of holders of at least a majority of the common stock issued and outstanding;
• advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at annual meetings;
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• a limited ability for stockholders to call special stockholder meetings; and
• board of directors authority to determine the powers, preferences and rights of our preferred stock and to issue the preferred stock without stockholder approval.
Our board of directors may, subject to its fiduciary duties under applicable law, choose to implement a shareholder rights plan in the future.
These provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many stockholders. As a result, stockholders may be limited in their ability to obtain a premium for
their shares.
We may not pay dividends in the future, and our dividend policy is subject to change at any time.
The timing and amount of future dividends for our common stock or preferred stock, if any, could be affected by various factors, including our earnings, financial condition and anticipated cash requirements; the loss of a vessel; the acquisition
of one or more vessels; required capital expenditures; reserves established by our board of directors; increased or unanticipated expenses; including insurance premiums; a change in our dividend policy; increased borrowings; increased interest
payments to service our borrowings; prepayments under credit agreements in order to stay in compliance with covenants in the secured credit facilities; repurchases of our securities that may be outstanding from time to time, future issuances of
securities or the other risks described in this section of this report, many of which may be beyond our control. In addition, the tanker industry is highly volatile, and we cannot predict with certainty the amount of cash, if any, that will be
available for distribution as dividends in any period. Furthermore, any new shares of common stock issued will increase the cash required to pay future dividends. Any common or preferred stock that may be issued in the future to finance
acquisitions, upon exercise of stock options or other equity incentives, would have a similar effect, and may reduce our ability to pay future dividends.
In addition, our dividends are subject to change at any time at the discretion of our board of directors and our board of directors may elect to change our dividends by establishing a reserve for, among other things, the repayment of the secured
credit facilities, repurchases of our securities that may be outstanding from time to time or to help fund the acquisition of a vessel. Our board of directors may also decide to establish a reserve to repay indebtedness if, as the maturity dates of
our indebtedness approach, we are no longer able to generate cash flows from our operating activities in amounts sufficient to meet our debt obligations and it becomes clear that refinancing terms, or the terms of a vessel sale, are unacceptable or
inadequate. If our board of directors were to establish such a reserve, the amount of cash available for dividend payments would decrease. In addition, our ability to pay dividends is limited by the Republic of the Marshall Islands (the “Marshall
Islands”) law. Marshall Islands law generally prohibits the payment of dividends other than from surplus, or if there is no surplus, from the net profits for the current and prior fiscal year, or while a company is insolvent or if a company would
be rendered insolvent by the payment of such dividends. We may not have sufficient surplus or net profits in the future to pay dividends, and we can give no assurance that dividends will be paid in the future or the amounts of dividends which may
be paid.
We are incorporated in the Marshall Islands, which does not have a well-developed body of corporate law, a bankruptcy act or an insolvency act.
Our corporate affairs are governed by our amended and restated articles of incorporation and amended and restated bylaws and by the Republic of the Marshall Islands Business Corporations Act, or the “BCA.” The provisions of the BCA resemble
provisions of the corporation laws of a number of states in the U.S. However, there have been few judicial cases in the Marshall Islands interpreting the BCA, and the rights and fiduciary responsibilities of directors under the laws of the Marshall
Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in the U.S. Therefore, the rights of stockholders of the Marshall Islands may differ from the rights
of stockholders of companies incorporated in the U.S. While the BCA provides that it is to be interpreted and construed according to the laws of the State of Delaware and other U.S. states with substantially similar legislative provisions and that
the non-statutory laws of the State of Delaware and other U.S. states with substantially similar legislative provisions are thereby declared to be and adopted as the laws of the Marshall Islands, there have been few court cases interpreting the BCA
in the Marshall Islands. We cannot predict whether the Marshall Islands courts would reach the same conclusions that any particular U.S. court would reach or has reached. Thus, you may have more difficulty in protecting your interests in the face
of actions by the management, directors or controlling stockholders than would stockholders of a corporation incorporated in a U.S. jurisdiction which has developed a relatively more substantial body of case law.
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In addition, the Marshall Islands has neither a bankruptcy nor an insolvency act, and as a result, any bankruptcy action involving our company would have to be initiated outside the Marshall Islands, and our public stockholders may find it
difficult or impossible to pursue their claims in such other jurisdictions.
Our amended and restated bylaws restrict stockholders from bringing certain legal action against our officers and directors and investors may find it difficult or impossible to effect service of process and enforce
judgments against us, our directors and our executive officers.
Our amended and restated bylaws contain a broad waiver by our stockholders of any claim or right of action, both individually and on our behalf, against any of our officers or directors. The waiver applies to any action taken by an officer or
director, or the failure of an officer or director to take any action, in the performance of his or her duties, except with respect to any matter involving any fraud or dishonesty on the part of the officer or director. This waiver limits the right
of stockholders to assert claims against our officers and directors unless the act or failure to act involves fraud or dishonesty.
Additionally, our officers and most of our directors reside outside of the United States and our assets are located outside of the United States. As a result, it may be difficult for U.S. investors to: (i) effect service of process within the
United States upon the Manager or those directors and officers who are not residents of the United States; or (ii) realize in the United States upon judgments of courts of the United States predicated upon the civil liability provisions of the
United States federal securities laws.
Our reliance upon “foreign private issuer” exemptions may afford less protection to holders of our common shares.
We are a “foreign private issuer” or “FPI” under the securities laws of the United States and the rules of the NYSE. Under the NYSE rules, a foreign private issuer is subject to less stringent corporate governance requirements. Subject to
certain exceptions, the rules of the NYSE permit a foreign private issuer to follow its home country practice in lieu of the listing requirements of the NYSE. In addition, as a foreign private issuer we are not required to comply with all of the
periodic disclosure and current reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) applicable to U.S. domestic companies whose securities are registered under the Exchange Act. See “Item 16G. Corporate
Governance” for further details.
Changes to the definition of “foreign private issuer” under the securities laws of the United States could cause us to lose our FPI status and become subject to increased regulatory and reporting burdens.
On June 4, 2025, the SEC published a concept release soliciting public comment on whether to amend the eligibility criteria for FPI status, and on December 18, 2025, the Holding Foreign Insiders Accountable Act (the “HFIAA”) was enacted, which
will require our directors and officers to comply with the share ownership and transaction reporting obligations of Section 16(a) of the Exchange Act by March 18, 2026. The concept release outlines several potential approaches to narrow FPI
eligibility, including updating the existing shareholder and business contacts tests, adding minimum non-U.S. trading volume requirements or requiring incorporation in jurisdictions with robust regulatory frameworks. If the SEC were to adopt any of
these approaches, we may no longer qualify as an FPI and would become subject to similar regulatory and reporting requirements applicable to U.S. domestic issuers. Compliance with these additional requirements may require us to incur material
additional costs.
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RISKS RELATING TO TAXATION
Certain adverse U.S. federal income tax consequences could arise for U.S. stockholders.
A non-U.S. corporation will be treated as a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax purposes if either (i) at least 75% of its gross income for any taxable year consists of certain types of “passive income” or
(ii) at least 50% of the average value of the corporation’s assets are “passive assets,” or assets that produce or are held for the production of “passive income.” “Passive income” includes dividends, interest, gains from the sale or exchange of
investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of
services does not constitute “passive income.”
We believe it is more likely than not that the gross income derived from our transportation services or deemed to derive from our time chartering activities is properly treated as services income, rather than rental income. Assuming this is
correct, our income from our time chartering activities would not constitute “passive income,” and the assets we own and operate in connection with the production of that income would not constitute passive assets. Consequently, based on our actual
and projected income, assets and activities, we believe that it is more likely than not that we are not currently a PFIC and will not become a PFIC in the foreseeable future.
We believe there is substantial legal authority supporting the position that we are not a PFIC consisting of case law and U.S. Internal Revenue Service (the “IRS”) pronouncements concerning the characterization of income derived from time
charters as services income for other tax purposes. Nonetheless, it should be noted that there is legal uncertainty in this regard because the U.S. Court of Appeals for the Fifth Circuit has held that, for purposes of a different set of rules under
the U.S. Internal Revenue Code of 1986, as amended (the “Code”), income derived from certain time chartering activities should be treated as rental income rather than services income. However, the IRS has stated that it disagrees with the holding
of this Fifth Circuit case, and that income derived from time chartering activities should be treated as services income. We have not sought, and we do not expect to seek, an IRS ruling on this matter. Accordingly, no assurance can be given that
the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. No assurance can be given that this result will not occur. In addition, although we intend to conduct our
affairs in a manner to avoid, to the extent possible, being classified as a PFIC with respect to any taxable year, no assurance can be given that the nature of our operations will not change in the future, or that we will be able to avoid PFIC
status in the future.
If the IRS were to find that we are or have been a PFIC for any taxable year, our U.S. stockholders will face adverse U.S. federal income tax consequences. In particular, U.S. stockholders who are individuals would not be eligible for the
current maximum 20% preferential tax rate on qualified dividends. In addition, under the PFIC rules, unless U.S. stockholders make certain elections available under the Code, such stockholders would be liable to pay U.S. federal income tax at the
then-prevailing income tax rates on ordinary income upon the receipt of excess distributions and upon any gain from the disposition of our common stock, with interest payable on such tax liability as if the excess distribution or gain had been
recognized ratably over the stockholder’s holding period of such stock. The current maximum 20% preferential tax rate for individuals would not be available for this calculation.
Our operating income could fail to qualify for an exemption from U.S. federal income taxation, which will reduce our cash flow.
Under the Code, 50% of our gross income that is attributable to transportation that begins or ends, but that does not both begin and end, in the U.S. is characterized as U.S. source gross transportation income and is subject to a 4% U.S. federal
income tax without allowance for any deductions, unless we qualify for exemption from such tax under Section 883 of the Code. Based on our review of the applicable United States Securities and Exchange Commission (“SEC”) documents, we believe that
we qualified for this statutory tax exemption in 2025 and we will take this position for U.S. federal income tax return reporting purposes.
However, there are factual circumstances that could cause us to lose the benefit of this tax exemption in the future, and there is a risk that those factual circumstances could arise in 2026 or future years. For instance, we might not qualify
for this exemption if our common stock no longer represents more than 50% of the total combined voting power of all classes of our stock entitled to vote or of the total value of our outstanding stock. In addition, we might not qualify if holders
of our common stock owning a 5% or greater interest in our stock were to collectively own 50% or more of the outstanding shares of our common stock on more than half the days during the taxable year.
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If we are not entitled to this exemption for a taxable year, we would be subject in that year to a 4% U.S. federal income tax on our U.S. source gross transportation income. This could have a negative effect on our business and would result in
decreased earnings available for distribution to our stockholders.
We may be subject to taxation in Norway, which could have a material adverse effect on our results of operations and would subject dividends paid by us to Norwegian withholding taxes.
If we were considered to be a resident of Norway or to have a permanent establishment in Norway, all or a part of our profits could be subject to Norwegian corporate tax. We operate in a manner so that we do not have a permanent establishment in
Norway and so that we are not deemed to reside in Norway, including by having our principal place of business outside Norway. The management functions below the board level are currently split between Monaco, Norway, Singapore and India. Our Monaco
office holds senior management, our Norwegian office retains functions within finance, accounting, investor relations, chartering and operations, our Singapore office holds chartering, operations, newbuilding supervision, technical management and
ship management services, and India provides additional ship management services. Material decisions regarding our business or affairs are made, and our board of directors meetings are held at our principal place of business (including
telephonically, in the case of some board meetings). However, because one of our directors resides in Norway and we have entered into a management agreement with our Norwegian subsidiary, DHT Management AS, the Norwegian tax authorities may contend
that we are subject to Norwegian corporate tax. If the Norwegian tax authorities make such a contention, we could incur substantial legal costs defending our position and, if we were unsuccessful in our defense, our results of operations would be
materially and adversely affected. In addition, if we are unsuccessful in our defense against such a contention, dividends paid to our stockholders could be subject to Norwegian withholding taxes.
Recent income tax laws in Bermuda may adversely affect our business, financial condition or results of operation.
On December 27, 2023, Bermuda enacted its Corporate Income Tax (“CIT”) Act 2023, which imposes a 15% income tax on companies with revenue in excess of €750 million for two of the four previous fiscal years. The CIT Act applies to fiscal years
beginning on or after January 1, 2025, with a five-year deferred effective date for certain groups with a limited international footprint. Under current Bermuda law, the Company is not subject to any income or capital gains taxes in Bermuda. In
addition, because the Company has not exceed the €750 million revenue threshold for at least two of the four fiscal years immediately preceding the current fiscal year, it is not subject to the CIT Act. As a result, no income tax is payable by the
Company for the 2025 fiscal year, and we do not expect to be subject to income tax under the CIT Act unless our revenue exceeds the applicable threshold in future periods. Should the Company become subject to the CIT Act in the future, we may incur
additional income tax which could adversely affect our business, financial condition or results of operations.