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February 16, 2001

OMI reports improved earnings
OMI Corporation reported net income of $31,352,000 or $0.53 basic/diluted earnings per share ("EPS") for the fourth quarter 2000 compared to a net loss of $42,750,000 or $0.97 basic/diluted loss per share (after an extraordinary loss of $0.03 per share) for the same period in 1999.

For the year ended December 31, 2000, the net income was $53,085,000 compared to 1999's net loss of $80,305,000

Chairman, CEO and president Craig H. Stevenson, Jr. commented that "the past year saw a turnaround in the energy service business in general and the tanker segment in particular. Market fundamentals suggest that the energy service business should be strong for at least the next several years. We are excited about the impact of this strength on high quality vessels and especially OMI's very young fleet."

OMI's fleet currently comprises 22 vessels, consisting of six wholly-owned Suezmaxes, two chartered-in Suezmaxes (one bareboat and one time charter), three 66,000 dwt product tankers currently carrying crude oil, eight handysize product carriers (three additional product carriers are to be delivered in February 2001), two handymax product carriers and one ULCC.

OMI has two Suezmaxes and two handymaxes under construction for 2002 deliveries.

The company participates in three marketing alliances for its Suezmax, Panamax and IPC product carrier fleets. In 1998, OMI formed a joint venture, Alliance Chartering LLC ("Alliance") with Frontline Ltd., to charter both companies' Suezmaxes. In 1999, OMI entered into a joint venture, International Product Carriers Limited ("IPC") with Osprey Maritime Limited ("Osprey") for midsize product tankers. Currently six of OMI's product carriers are operating under adjustable rate time charters with IPC. OMI also has its three Panamax tankers operating in the Star Tankers Pool, the world's largest commercial operator of Panamaxes.

MARKET SUMMARY

Suezmax Tanker Market: OMI says the tanker market fundamentals improved substantially throughout 2000 and, in the fourth quarter, TCE freight rates reached very high levels not seen since the early 1970s. This was the result of increasing world oil demand at a time of very low inventory levels, and increased crude oil seaborne volumes as OPEC revised upward its oil production quota by an aggregate total of 3.7 million b/d. At the same time, the growth of the world tanker fleet was moderate as high tanker scrapping activity, especially in the first half of 2000, offset newbuilding deliveries. In addition, charterers substantially reduced their acceptance of old tankers, due to concerns stemming from the Erika accident at the end of 1999. TCE rates for Suezmax tankers have softened in February 2001 but remain above the level prevailing at the same time last year. This is due to a reduction of Iraqi oil exports as a result of an oil pricing dispute with the United Nations. Though Iraq is soon expected to resume its oil production and exports to the levels prior to the dispute, in the short run, Suezmax TCE's could be lower than the recent peak as the other OPEC members have decided to reduce their oil production quotas by 1.5 million bld beginning February 1, 2001 to support oil prices. However, even after the cut, OPEC will be producing at a higher rate than the same period a year ago. The OPEC oil production cut, the oil loss due to lower Iraqi oil exports and substitution of oil for gas in the U.S. due to very high gas prices would ensure a significant first quarter oil stock draw, as well as reduce the second quarter usual commercial oil stock build. This would set the stage for stronger oil and tanker markets in the second half of 2001 as world economic activity improves and oil supply/demand fundamentals become materially tighter.

Product Tanker Market: OMI says the product tanker market continued to improve with each quarter in 2000 and TCE's for handysize product tankers in the Caribbean reached levels not seen since the Iraqi/Kuwaiti conflict ten years ago. This was the result of continued strong oil demand growth in the Atlantic region at a time that oil product inventories were very low, the charterers reduced preference for old vessels in favor of quality product tanker tonnage after the Erika incident, and the moderate product tanker fleet increase in 2000. Freight rates for product tankers have continued to be strong to date in 2001. The strong product tanker market is expected to continue in the foreseeable future given the tight oil product markets in the Atlantic region and the high price and low natural gas supply in North America, which encourage substitution of oil for gas and the sourcing of large volume imports of heating oil into the U.S. from Europe.

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