75208--3/1/2006--OVERSEAS_SHIPHOLDING_GROUP

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{condition, economic, financial}

{capital, credit, financial}

{cost, contract, operation}

{investment, property, distribution}

{operation, natural, condition}

{competitive, industry, competition}

{operation, international, foreign}

{acquisition, growth, future}

{personnel, key, retain}

{tax, income, asset}

{cost, regulation, environmental}

{product, liability, claim}

{debt, indebtedness, cash}

The highly cyclical nature of the tanker industry may lead to volatile changes in charter rates and vessel values, which may adversely affect the Company s earnings An increase in the supply of tankers without an increase in demand for tankers could cause charter rates to decline, which could have a material adverse effect on OSG s revenues and profitability Charter rates may decline from their current level, which could have a material adverse effect on OSG s revenues and profitability OSG s revenues are subject to seasonal variations Terrorist attacks and international hostilities can affect the tanker industry, which could adversely affect OSG s business The market value of vessels fluctuates significantly, which could adversely affect OSG s liquidity, result in breaches of its financing agreements or otherwise adversely affect its financial condition Shipping is a business with inherent risks, and OSG s insurance may not be adequate to cover its losses Because OSG conducts its business on a worldwide basis, OSG faces a number of significant risks that could result in losses or higher costs Compliance with environmental laws or regulations may adversely affect OSG s business The market value of OSG s vessels, which are at or near historically high levels, may be depressed at a time and in the event that it sells a vessel The Company s substantial debt could adversely affect our financial condition When OSG s credit facilities mature, it may not be able to refinance or replace them The Company is highly dependent upon volatile spot market charter rates OSG may not be able to renew time charters when they expire or enter into new time charters for newbuilds OSG is dependent on the creditworthiness of its customers Termination or change in the nature of OSG s relationship with any of the pools in which it participates could adversely affect its business OSG may not be able to grow its fleet OSG s strategy of growing its business in part through acquisitions is capital intensive, time consuming and subject to a number of inherent risks Operating costs and capital expenses will increase as the Company s vessels age OSG s purchase of second hand vessels carries risks associated with the quality of those vessels In the highly competitive international tanker market, OSG may not be able to effectively compete for charters with companies with greater resources OSG is being investigated by the U.S. Department of Justice relating to the handling of waste oils OSG s vessels call on ports located in countries that are subject to restrictions imposed by the U.S. government, which could negatively affect the trading price of the Company s common stock OSG depends on its key personnel and may have difficulty attracting and retaining skilled employees The Company may face unexpected drydock costs for its vessels Maritime claimants could arrest OSG s tankers, which could interrupt its cash flow Governments could requisition OSG s vessels during a period of war or emergency without adequate compensation

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75208--3/1/2006--OVERSEAS_SHIPHOLDING_GROUP_INC