Nordic American Tankers Ltd (NYSE: NAT) – Comments on the current blocking of the Suez Canal

Rhea-AI Summary

Nordic American Tankers (NAT) operates a fleet of 25 Suezmax tankers, capable of carrying one million barrels of oil each. Recently, the Suez Canal has been blocked by a large vessel, creating uncertainty about the duration of the blockage. Prolonged closure could necessitate rerouting vessels around Africa, significantly increasing travel distance and time, which would reduce the available shipping capacity and potentially raise freight rates. The company has not provided specific financial forecasts due to the unpredictable nature of the situation.

Positive

• Higher freight rates anticipated due to reduced shipping capacity caused by Suez Canal blockage.

Negative

• Uncertainty regarding duration of Suez Canal blockage could disrupt logistics.
• Potential for longer voyages could lock up shipping capacity, reducing effective number of voyages.

 

March 25, 2021

Dear Shareholders and Investors, 

NAT is a Suezmax specialist – each vessel of 150,000/160,000 tons can carry one million barrels of oil. Our fleet consists of 25 Suezmax tankers (including 2 newbuildings).

A Suezmax tanker is the largest tanker that can transit the Suez Canal.

The Suez Canal is now blocked by a large vessel. We cannot predict how long the current situation in the Suez Canal will last. 

A closure of the Suez Canal, over a prolonged period of time, would require vessels to divert around Africa going from West to East and vice versa. This is a materially longer distance.

A longer voyage will lock up more shipping capacity, reducing the effective number of voyages the world fleet can perform over a period. This means reduced availability of shipping capacity, which in turn would imply higher freight rates.

 

Sincerely,

Herbjorn Hansson
Founder, Chairman & CEO

Nordic American Tankers Ltd.                                                           www.nat.bm  

 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker market, as a result of changes in OPEC’s petroleum production levels and worldwide oil consumption and storage, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission, including the prospectus and related prospectus supplement, our Annual Report on Form 20-F, and our reports on Form 6-K.

NAT is a Bermuda based company.

Contacts:       

Gary J. Wolfe
Seward & Kissel LLP
New York, USA
Tel: +1 212 574 1223

Bjørn Giæver, CFO                                                             
Nordic American Tankers Ltd                                             
Tel: +1 888 755 8391 or +47 91 35 00 91                                 

Herbjørn Hansson, Founder, Chairman & CEO
Nordic American Tankers Ltd
Tel: +1 866 805 9504 or +47 90 14 62 91       

 

FAQ

What impact does the Suez Canal blockage have on NAT's operations?

The blockage may lead to longer shipping routes, which could increase operational costs and affect logistics.

How many tankers does Nordic American Tankers operate?

NAT operates a fleet of 25 Suezmax tankers.

What is the capacity of a Suezmax tanker operated by NAT?

Each Suezmax tanker can carry one million barrels of oil.

What are the implications of increased freight rates for NAT?

Higher freight rates could enhance revenue potential for NAT, benefiting shareholders.

When was the press release regarding the Suez Canal issued?

The press release was issued on March 25, 2021.