earnings of $29,000/day

WHAT A WAY TO END THE YEAR 19 th December 2014 Summing up 2014 in just a few words seems like an impossible task, soo much has happened making it difficult to know where to start. Geopolitics has certainly playedd a part with disruptions in Libya, ISIS in Iraq/Syria, protracted talks over Iran the crisis in Crimea helping the oil price to peak at $116/bbl before falling to less than $60/bbl this week which is somewhat remarkable against a backdrop of such political instability. OPEC s decisionn to avoid cutting production has lent support to the tanker market despite slower oil dem growth. Whilst in the short term this is undoubtedly a positive for tankers, a persistently low oil price will discourage investmentt in higher cost fields. However, lower oil prices typically stimulate consumption subsequent tanker dem. Much was ( still is) saidd about floating storage, but the reality is that we just haven t seen a wide enough contango structure to make tanker storage profitable. However, with a surplus of crude rapidly building, floating storage could make sense later in 2015 - a tantalising prospect for owners. Of course in the latter stages off this year owners have seen their earnings improve off the back off lower fuel costs. Bunker pricess peaked to averagee $591/tonne (Rotterdam HSFO) in June but December too date averaged just $342/tonne. 2014 saw a strong start for the crude sector with TD3 (AG-Japan) averaging $35,000/day through January February before softening to average $18,000/da$ ay over Q2/3. However Q4 failed to disappoint with earnings averaging $50,000/day for f the period to date VLCC earnings in excess of $80,000/day at the time of writing. On the whole, VLCC owners will end 2014 much better than 2013 with earnings averagingg in the region of $29,000/day the highest annual average since 2010. Suezmaxes were able to achieve TCE T earnings of $25,500/day over the course of the year, levels not seen since 2008 promptingg much attention to the sector as can been seen from the 48 orders placed this year. Aframaxes benefitted from a volatile market subsequently earnings surged to average $24,500/ /day in part thanks to earnings of nearly $80,000/day in January. At times the product sector has been less inspiring, sentiment has shifted towards the crude sector. MRs suffered throughoutt the year as growing fleet supply continued to impact upon earnings. C2/TC14 (UK Cont-USAC/USG-UK Cont) triangulation earningss struggled to average $11,500/day in Q1-Q3. However ownerss were able to achieve triangulation earnings of $29,000/day in the final quarter. LRs took a while to get going but were not as a sluggish as the MRs. LR2s trading between the Middle East Gulf Japan earned just $11,000/day in the first half of 2014, but achieved $24,500 in the second half. The story was similar for LR1s which also achieved $11,000/day in the first half generating better returns of $19,500/day for the second half of the year. These rate improvements mean LR1s/LR2s earnings are the highest since 2008 yet many owners will still requiree higher levels to breakeven onn their investments (see our 12 th December report). Overall crude tanker supply growth slowed in 2014 with VLCC deliveries outstripping scrapping/conversionss to see year end fleet growth of 12 vessels. By comparison the Suezmax fleet grew by just 3 vessels, Aframax/LR2s contracted by 7 vessels Panamax/ LR2s by 5. Of course the story is significantly different withh MR/Hies wheree supply grew by 79 vessels a heavy orderbook set to deliver over the next 2/3 years. Tanker orders have been significantly lower at 172 units at the time off writing, down from 336 a year prior. Suezmaxes received the greatest attention with 48 units booked, VLCC ordering activity declined slightly to 38 orders. Aframax/LR2 orders declined significantly over 2013, with justt 21 orderss placed (coated/non coated) down from 63 a year earlier. It seems hard to believe that t in 20133 not one owner pulled

the trigger on LR1/Panamax orders is therefore little surprise to see 27 orders make the cut this year. Fortunately MR ordering has nosedived this year following the realisation that 225 orders in 2013 was more than ample, subsequently we have seen just 38 orders placed for 2014. Looking ahead the theme of compliance continues. Owners will w be faced with the challenge of complying with emission control regulations from the 1 st of o January 2015. Additionally the ballast water management convention may finally be ratified in 2015, meaning it would enter in to force 12 months later another significant cost for vessels without ballast water treatment facilities already on board. Rates VLCCC Suezmax Aframax LR2 LR1 MR (TCEs at market speed ) Middle East - Japan West Africa - UKCont North Sea - UKCont Middle East - Japan Middle East - Japan UKCont - USAC December 2013 WS TCE/day 62 $51,250 99 $45,750 135 $47,250 82 $12,000 100 $12,000 125 $10,250 December 2014 2014 WS TCE/day WS Low WS High 69 $76,500 32 83 81 $32,500 52. 5 147.5 109 $34,500 82. 5 220 103 $27,750 70 135 113 $21,750 87. 5 135 195 $33,000 80 210 Single Hull vs. Double Hull End 2014 S.Hull D.Hull VLCCC Suezmax Aframax/LR2 Panamax/LR1 Hy/MR 1 1 6 3 67 629 478 891 420 1,7688 NB: Almost all of the remaining S/H tankers are nott actively trading in conventional tanker markets. Tanker Orderbook (25,000 dwt+) excluding options New Deliveries (25,000 dwt+ +) 61.7 M dwt (587 vsls) 20.7 M dwtt (169 vsls) 65.0 M dwt d (561) 15.8 M dwt d (157) Brent Oil Price (ICE Close) Bunkers 380cst Fujairah / Rotterdam $110.80/bbl (31 st Dec) $59.27 (18 Dec) $623 / $5933 tonne $330 / $ 308 tonne World Oil Production (November) OPEC crude production Non OPEC -inc OPEC NGL & Biofuels World Oil Dem 88.8 M b/dd (+0.8%) 29.5 M b/dd (-4.8%) 59.9 M b/dd (+3.8%) 91.7 M b/dd (+1.7%) 90.7 M b/d b (+2.1%) 30.3 M b/d b (+2.7%) 61.3 M b/d b (+2.3%) 92.4 M b/d b (+0.7%) Tankers Demolished (25,0000 dwt+) Lwt price - China / India VLCC s sold for scrap number /dwt US$: 1 12.4 M dwtt (107) $340 / $4400 21 vessels / 6.1 M dwt $1.6481 (311 st Dec) 8.2 M dwt (74) $235 / $465 12 vessels / 3.5 M dwt $1.5659 (18 th Dec)

CRUDE Middle East VLCC Charterers initially kept the party throbbing, Owners spun rates up to over wss 80 to the East, as a result. However, as December fully closed, full January programmes were awaited, the music died, some noticeable discounting quickly took over to bring levels down to around ws 70 East mid ws 30 s to the West. A last minute pre-holiday shopping spreee will be keenly hoped for by Owners to prevent more deterioration. Suezmaxes trod a steadier path. Activity simmered, rather than bubbled, but it proved sufficient to keep rates averaging in the mid ws 90 s East, low/midd ws 40 s to the West, though some very late-week action now sets a potentially steeper path over the next period. Aframaxes scratched around for most off the week rates suffered accordingly to sub 80,000 by ws 115 to Singapore with further slippage s onn the cards. West Africa Suexmaxes had a mixed bag of a week, starting slowly with rates easing gently, but from mid-week enjoying a relative fixing-fest lines, which allowed for the market to gain legs to 130,000 by ws 90+ to Europe, d ws as Charterers cleared their pre-holiday 85 to the US Gulf, though consolidation, rather than acceleration is now the watchword. VLCCs also started slowly, but the dip in the Middle East provoked more interest to the East with ws 68.5 'last done', lower levels likely to be posted within short. Mediterranean A reversal in fortunes for Aframaxes here. Last week s gains evaporated upon stagnant enquiry, cancellation of a number of Libyan stems didn t help either. Rates fell off to 80,000 by ws 97.5 X-Med, could slip a little further. Suezmaxes bumped up significantly to t 140,000 by ws 115 from the Black Sea too European destinations on solid interest, but oncee the shelves had been cleared, the market m had to exist upon crumbs, rates slipped to ws 107..5 with signposts pointing strongly further South. Caribbean Aframaxes hadd high hopes of holiday shopping, but the tills stayed rather quiet rates slipped badly to 70,000 by ws 102.5 upcoast it ll need a veritable fixing frenzy to clear enough availability to allow for a significant turnaround. VLCCs saw little, but it didn t need n muchh to keep Owners' plate spinning at $7.25 millionn to Singapore, $6.4 million to West Coast India, with little early change likely whilst local supply remains so limited. North Sea Healthy levels of Aframax enquiry, but a nondescript result. Rates operate with an 80,000 by ws 117.5/120 range r X-UKC, at 100,000 by ws 95/97.5 from the Baltic. Holiday plans will now be prioritised for many, d a flat period forecast. VLCCs found one o or two things to do - but not more. $5.3 million was w paid, however, for fuel oil to Singapore, d $7.175 million for Crude oil fromm Hound Point to South Korea to at least provide some talking point for f the industry chatteratti.

CLEAN PRODUCTS East LR1s have remained fairly tight on tonnage but volumes have been less, so rates have just drifted from the elevated level they reached the week before. 55,000 mt Naphtha AG/Japan is now at ws 120 65,000 mt jet AG/UKC is hovering around $2.05 million. The big Christmas slow down is coming but with MRs super tight there will be enough shorthaul stems to keep the LR1s busy for now. LR2s have seen a slight resurgence this week with the first decade January Naphtha stems hitting the market ships quickly thinning out. Rates are back to last weeks levels may move a touch higher. 75,000 mt Naphtha AG/Japan is now ws 100 90,000 mt Jet AG/UKC is upto $2.70 million again are fixing at ws 125 levels. East Africa has been in high dem, with a host of early January liftings the market has slowly firmed with ws 175 on subjects. AG to the UKC has been very busy also Owners have been pushing rates up, it has peaked at $1.7 Million, which is a rise of $225,000 over the course of the week. The shorthauls have also seen firming with X-AG close to $350,000. Next week is disjointed given the holidays, but the firmness is expected to last into the New Year. Disappointingly for shipowners, the North Asia CPP market has had a very quiet slow week with very little to talk about in terms of cargo volume. The position list has lengthened for all three sizes, Owner sentiment has been chipped away as a result. South Korea/Singapore for the MR sizes has not really been tested this week, but Nakhodka/Singapore is reported on subjects at the time of writing at $520K which, taking the mostly accepted $50-70K differential for Korea vs. Russia loading, would put South Korea/Singapore at best $470K today another $50K drop on last week s levels. LR1s LR2s have also been deadly quiet Owners will hope the fact that the AG market is picking up again can stop the rot on the backhaul. LR1s should fix at about $520K Korea/Singapore but are untested, for LR2s, last done levels were at $625K but again the route is untested next done could well be below these levels. The Singapore market has stayed firmer this week with a good amount of activity; most Owners will still prefer to fix long-haul cargoes (especially in the lead up to Christmas) so these routes have stayed steadier at 30kt x ws 180 levels or a shade below for Singapore/Australia. Short-haul routes have been more volatile X- Singapore should be back to above $150K again now. Next week is expected to be quieter though, we will probably see rates come off as a result. Mediterranean Another whopper of a week in the Mediterranean. Monday trading was fixing around 30 x ws 215, but on account of tight tonnage a glut of cargoes rates have jumped upwards the market closes 30 x ws 230+ with 30 x ws 240-245 rumoured on subjects. MR rates have been softening from the UKC, but the Med market has held up better with less tonnage availability, so consider it 37 x ws 195 for Med Transatlantic 37 x ws 210-215 West Africa. Heading East to the Red Sea is around the $1.3-1.4 million level but date Owner sensitive. UK Continent A quiet start to the week saw TC2 slip slightly with rates falling to 37 x ws185. However at time of writing a few more cargoes in the market should keep rates buoyed at current levels, with 37 x ws185-190 the conference rate depending on Worldscale ECA agreements. Cont/ West Africa followed suit trades at +15 points. Hies X- Continent continue to hover around 30 x ws 182.5-185 Flexi's 22 x ws 235-240 levels. LRs have had a quieter week giving the tonnage list an opportunity to build. LR1s remain tight although a number of ballast positions between 25-30 December may put downward pressure on rates, although expect more cargoes before month is out. LR2s are extremely tight until the New Year. Caribbean USG market is trending sideways this week, hovering around the 38 x ws 145 levels for TC14. Enough enquiry in the market to keep rates firm prevent them from falling, with tonnage steadily being tucked away. Caribs up to the USAC now at around 37 x ws 160 levels. LRs ex USG have also quietened off from their busy spell, with the fixing window now in the first half of January.

DIRTY PRODUCTS Hy With six days until Christmas we have witnessed slight panic in the market where Charterers are keen to shift their remaining cargo before the t end off the year Owners are keen to capitalise on thiss but also cover their fleet during the quiet holiday period. As a consequence we have seen points surge fixing dates leap into the New Year. With both markets feeding Owners with plenty of business, tonnage has naturally tightened, however the risk of forward fixing falls on both parties laps as firm itineraries are key. Well placed tonnage is ultimately in control of this firm market that said, a lot of stems have been covered already next weekk will depend on vessels schedules. Panamax Some gentle progression p on rates from f an Owner side has managed to be achieved in the Continent, albeit with some help from some last minute 2014 fixing. This being said, as we enter week 52 with a quiet week passing inn the Mediterranean Caribbean, tonnage willl start to build any opportunity to find some employment to cover the Christmas period will bee actively sought. Expect some last minute non-market rates to appear or just simply vessels falling off tonnage lists as Charterers clip vessels away under the radar. MR A slow week for the MRs has passed, with some Owners expecting the pre-christmas rush to have appeared. Unfortunately this is yet to be seen, with only a few days left of opportunity, perhapss we won t. The Continent has seen some consistent gently inquiry, market conditions remain flat. In the Mediterranean some vessels have ignoredd the tempting 30kt stems in hope of finding the illusivee full cargo, as we sit heree on Friday,, any remaining tonnage may start to be concerned; with the hope of the first half of week 52 to see a final flurry.

Dirty Tanker Spot Market Developments - Spot Worldscale TD3 VLCC AG-Japan +5 78 73 51 51 TD20 Suezmax WAF-UKC +14 88 75 148 88 TD7 Aframax N.Sea-UKC +16 121 105 131 113 Dirty Tanker Spot Market Developments - $/day tce (a) TD3 VLCC AG-Japan +12,500 96,500 84,000 38,000 51,500 TD20 Suezmax WAF-UKC +11,750 47,750 36,000 78,250 44,000 TD7 Aframax N.Sea-UKC +13,500 44,250 30,750 45,500 36,750 Clean Tanker Spot Market Developments - Spot Worldscale TC1 LR2 AG-Japan -1 99 100 113 TC2 MR - west UKC-USAC -18 187 205 167 138 TC5 LR1 AG-Japan +7 118 111 119 106 TC7 MR - east Singapore-EC Aus +1 180 179 185 Clean Tanker Spot Market Developments - $/day tce (a) TC1 LR2 AG-Japan +1,750 28,500 26,750 28,500 TC2 MR - west UKC-USAC -3,250 31,250 34,500 21,750 19,500 TC5 LR1 AG-Japan +4,000 25,250 21,250 20,250 21,500 TC7 MR - east Singapore-EC Aus +1,500 22,000 20,500 18,750 (a) based on round voyage economics at 'market' speed LQM Bunker Price (Rotterdam HSFO 380) -25 308 332.5 416.5 LQM Bunker Price (Fujairah 380 HSFO) -48 330 377.5 460 LQM Bunker Price (Singapore 380 HSFO) -41 334 375 467 RM/JH/JD/DP/SLK Produced by Gibson Consultancy Research Visit Gibson s website at www.gibson.co.uk for latest market information E.A. GIBSON SHIPBROKERS LTD., AUDREY HOUSE, 16-20 ELY PLACE, LONDON EC1P 1HP Switchboard Telephone: (UK) 020 7667 1000 (International) +44 20 7667 1000 E-MAIL: tanker@eagibson.co.uktelex: 94012383 GTKR G FACSIMILE No: 020 7831 8762 BIMCOM E-MAIL: 19086135 This report has been produced for general information is not a replacement for specific advice. While the market information is believed to be reasonably accurate, it is by its nature subject to limited audits validations. No responsibility can be accepted for any errors or any consequences arising therefrom. No part of the report may be reproduced or circulated without our prior written approval. E.A. Gibson Shipbrokers Ltd 2014.