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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.08pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
+0.05pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.10pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adversely+4
against+3
adverse+2
threatened+2
retaliate+2
Positive rising
effective+2
satisfaction+2
satisfy+1
Risk Factors (Item 1A)
18,400 words
ITEM 1A. RISK FACTORS
This section highlights important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements made in this report or presented elsewhere by management from time to time. If any of the circumstances or events described below actually arise or occur, the Company’s business, results of operations and financial condition could be materially adversely affected. Actual dollar amounts are used in this Item 1A. “Risk Factors” section.
Summary of Risk Factors
The following is a summary of the risk factors you should be aware of before making a decision to invest in our common stock. This summary does not address all the risks we face. Additional discussion of the risks summarized in this risk factor summary, and other risks we face, can be found below in this risk factor section and should be carefully considered, together with other information in this annual report on Form 10-K and other filings with the SEC, before making an investment decision regarding our common stock.
Risks Related to Our Industry
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The highly cyclical nature of the industry may lead to volatile changes in charter rates and vessel values, which could adversely affect the Company’s earnings and available cash.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
instability+2
decline+2
losses+1
disrupted+1
volatile+1
Positive rising
strengthening+3
strong+2
achieve+1
effective+1
satisfied+1
MD&A (Item 7)
11,258 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
This MD&A, which should be read in conjunction with our accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” provides a discussion and analysis of our business, current developments, financial condition, cash flows and results of operations. It is organized as follows:
General. This section provides a general description of our business and factors that impact our operations, which we believe is important in understanding the results of our operations, financial condition and potential future trends.
Operations & Oil Tanker Markets. This section provides an overview of industry operations and dynamics that have an impact on the Company’s financial position and results of operations.
Results from Vessel Operations. This section provides an analysis of our results of operations presented on a business segment basis. In addition, a brief description of significant transactions and other items that affect the comparability of the results is provided, if applicable.
Liquidity and Sources of Capital. This section provides an analysis of our cash flows, outstanding debt and commitments. Included in the analysis of our outstanding debt is a discussion of the amount of financial capacity available to fund our ongoing operations and future commitments as well as a discussion of the Company’s planned and/or already executed capital allocation activities.
Risk Management . This section provides a general overview of how the interest rate, currency and fuel price risks are managed by the Company.
The market value of vessels fluctuates significantly, which could adversely affect INSW’s liquidity or otherwise adversely affect its financial condition.
Declines in charter rates and other market deterioration could cause INSW to incur impairment charges.
Changes in the worldwide supply of vessels or an expansion of the capacity of newly-built vessels, without a commensurate shift in demand for such vessels, may cause spot charter rates to increase or decline, affecting INSW’s revenues, profitability and cash flows, and the value of its vessels.
Shipping is a business with inherent risks, and INSW’s insurance may not be adequate to cover its losses.
Counterparty credit risk and constraints on capital availability may adversely affect INSW’s business.
The state of the global financial markets may adversely impact the Company’s ability to obtain additional financing on acceptable terms and otherwise negatively impact the Company’s business.
INSW conducts its operations internationally, which subjects it to changing economic, political and governmental conditions that may adversely affect its business.
Acts of piracy on ocean-going vessels, terrorist attacks and international hostilities and instability, including attacks against merchant vessels in the Red Sea and the Gulf of Aden by Iran–backed Houthi militants in Yemen, could adversely affect the Company’s business.
The war between Russia and Ukraine could adversely affect INSW’s business.
Public health threats could adversely affect INSW’s business.
Risks Related to Our Company
INSW has incurred significant indebtedness which could affect its ability to finance its operations, pursue desirable business opportunities and successfully run its business in the future, all of which could affect INSW’s ability to fulfill its obligations under that indebtedness.
The Company may not be able to generate sufficient cash to service all of its indebtedness and could in the future breach covenants in its credit facilities, term loans and certain vessel charters.
INSW is a holding company and depends on the ability of its subsidiaries to distribute funds to it in order to satisfy its financial obligations or pay dividends.
The Company will be required to make additional capital expenditures to expand the number of vessels in its fleet and to maintain its vessels, which depend on additional financing.
The Company depends on third-party service providers for technical and commercial management of its fleet.
INSW’s business depends on voyage charters, and any future decrease in spot charter rates could adversely affect its earnings.
INSW may not be able to renew Time Charters when they expire or enter into new Time Charters.
Termination of, or a change in the nature of, INSW’s relationship with any of the commercial pools in which it participates could adversely affect its business.
INSW may not realize the benefits it expects from past acquisitions or acquisitions or other strategic transactions it may make in the future.
The smuggling or alleged smuggling of drugs or other contraband onto the Company’s vessels may lead to governmental claimsagainst the Company.
Operational costs and capital expenses will increase as the Company’s vessels age and may also increase due to unanticipated events related to secondhand vessels and the consolidation of suppliers.
The Company is subject to credit risks with respect to its counterparties on contracts, and any failure by those counterparties to meet their obligations could cause the Company to sufferlosses on such contracts, decreasing revenues and earnings.
The Company may face unexpected drydock costs for its vessels.
Technological innovation could reduce the Company’s charter income and the value of the Company’s vessels.
The Company stores, processes, maintains, and transmits confidential information through information technology (“IT”) systems. Cybersecurity issues, such as security breaches and computer viruses, affecting INSW’s IT systems and those of its third-party vendors, suppliers or counterparties, could disrupt INSW’s business, result in unintended disclosure or misuse of confidential or proprietary information, damage its reputation, increase its costs, and cause losses.
INSW’s revenues are subject to seasonal variations.
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Effective internal controls are necessary for the Company to provide reliable financial reports and effectively prevent fraud.
Risks Related to Legal and Regulatory Matters
Climate change and greenhouse emissions may adversely affect our operating results.
Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our sustainability and governance policies may impose additional costs on us or expose us to additional risks.
Compliance with complex laws, regulations, and, in particular, environmental laws or regulations, including those relating to the emission of greenhouse gases (“GHGs”), may adversely affect INSW’s business.
The employment of the Company’s vessels could be adversely affected by an inability to clear the oil majors’ risk assessment process.
The Company’s vessels may be directed to call on ports located in countries that are subject to restrictions imposed by the United States (“U.S.”), the UN, the United Kingdom, or the EU, which could negatively affect the trading price of the Company’s common shares.
An increase in trade protectionism and regulations issued by the United States to impose significant fees on vessels entering a U.S. port where that vessel was constructed in China or owned or operated by a Chinese entity , and orders issued by China to impose comparable fees on vessels entering a Chinese port where that vessel was not constructed in China and is owned or operated by a United States controlled entity could adversely impact our results of operation, financial condition and cash flows.
The Company may be subject to litigation and government inquiries or investigations that, if not resolved in the Company’s favor and not sufficiently covered by insurance, could have a material adverse effect on it.
Maritime claimants could arrest INSW’s vessels, which could interrupt cash flows.
Governments could requisition the Company’s vessels during a period of war or emergency, which may negatively impact the Company’s business, financial condition, results of operation and available cash.
We may be subject to U.S. federal income tax on U.S. source shipping income, which could reduce our net income and cash flows.
U.S. tax authorities could treat us as a “passive foreign investment company”, which could have adverse U.S. federal income tax consequences to U.S. shareholders.
Pending and future tax law changes may result in significant additional taxes to us.
Risks Related to the Common Stock
We are incorporated in the Marshall Islands, which may have fewer rights and protections for shareholders than under a typical jurisdiction in the United States.
It may be difficult to serve process on or enforce a United States judgment against us, our officers and our directors because we are a foreign corporation.
The market price of the Company’s securities may fluctuate significantly.
Our Amended and Restated Rights Plan may discourage, delay or prevent a change of control of the Company or changes to our management and, therefore, depress the market price of our Common Stock.
Future offerings of debt or equity securities by the Company may materially adversely affect the share price, and future capitalization measures could lead to substantial dilution of existing shareholders’ interests in the Company.
INSW may not continue to pay cash dividends on its Common Stock.
Risks Related to Our Industry
The highly cyclical nature of the industry may lead to volatile changes in charter rates and vessel values, which could adversely affect the Company’s earnings and available cash.
INSW depends on short duration, or “spot,” charters, for a significant portion of its revenues, which exposes INSW to fluctuations in market conditions. In the years ended December 31, 2025, 2024 and 2023, INSW derived approximately 82%, 86% and 91%, respectively, of its TCE revenues in the spot market. The tanker industry is both cyclical and volatile in terms of charter rates and profitability. Fluctuations in charter rates and vessel values result from changes in supply and demand both for tanker capacity and for oil and oil products. Factors affecting these changes in supply and demand are generally outside of the Company’s control. The nature, timing and degree of changes in industry conditions are unpredictable and could adversely affect the values of the Company’s vessels
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or result in significant fluctuations in the amount of charter revenues the Company earns, which could result in significant volatility in INSW’s quarterly results and cash flows, and the Company’s ability to remain in compliance with financial covenants in its credit facilities. See “—The Company may not be able to generate sufficient cash to service all of its indebtedness and could in the future breach covenants in its credit facilities, term loans and certain vessel charters.” Furthermore, recent geopolitical instability and weather conditions have significantly benefitted the Company’s financial results by increasing tanker demand in 2023 and 2024. This increased demand remained at an elevated level in 2025. There can be no certainty as to when such geopolitical instability and weather conditions will normalize, and any such normalization could cause tanker rates to decline significantly.
Factors influencing the demand for tanker capacity include:
supply and demand for, and availability of, energy resources such as oil, oil products and natural gas, which affect customers’ need for vessel capacity;
global and regional economic and political conditions, including armed conflicts, terrorist activities and strikes, that among other things could impact the supply of oil, as well as trading patterns and the demand for various vessel types;
regional availability of refining capacity and inventories;
changes in the production levels of crude oil (including in particular production by OPEC, the United States and other key producers);
weather and natural disasters;
international sanctions, embargoes, import and export restrictions or nationalizations and wars, including the current Russia – Ukraine war, attacks by Iran – backed Houthi militants based in Yemen and heightened U.S. sanctions-enforcement activity in Venezuela;
developments in international trade generally;
changes in seaborne and other transportation patterns, including changes in the distances that cargoes are transported, changes in the price of crude oil and changes to the West Texas Intermediate and Brent Crude Oil pricing benchmarks;
environmental and other legal and regulatory developments and concerns;
government subsidies of shipbuilding;
construction or expansion of new or existing pipelines or railways; and
competition from alternative sources of energy.
Factors influencing the supply of vessel capacity include:
the number of newbuilding deliveries;
the recycling rate of older vessels;
environmental and maritime regulations;
the number of vessels being used for storage or as FSO service vessels;
the number of vessels that are removed from service;
changes in the number of vessels ceasing to comply with sanctions imposed by the U.S., the UK and the EU, which changes either decrease or increase the number of vessels that participate in sanctions compliant trading;
availability and pricing of other energy sources for which tankers can be used or to which construction capacity may be dedicated; and
port or canal congestion and weather delays.
Many of the factors that influence the demand for tanker capacity will also, in the longer term, effectively influence the supply of tanker capacity, since decisions to build new capacity, invest in capital repairs, or to retain in service older obsolescent capacity are influenced by the general state of the marine transportation industry from time to time. If the number of new ships of a particular class delivered exceeds the number of vessels of that class being recycled, available capacity in that class will increase. The newbuilding order book of all classes of tankers (representing vessels in various stages of planning or construction that will be delivered in the future) equaled approximately 17%, 14% and 7% as of each of December 31, 2025, 2024 and 2023.
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The market value of vessels fluctuates significantly, which could adversely affect INSW’s liquidity or otherwise adversely affect its financial condition.
The market value of vessels has fluctuated over time. The fluctuation in market value of vessels over time is based upon various factors, including:
age of the vessel;
general economic and market conditions affecting the tanker industry, including the availability of vessel financing;
number of vessels in the world fleet;
types and sizes of vessels available;
changes in trading patterns affecting demand for particular sizes and types of vessels;
cost of newbuildings;
prevailing level of charter rates;
environmental and maritime regulations;
competition from other shipping companies and from other modes of transportation;
technological advances in vessel design and propulsion and overall vessel efficiency; and
ability to utilize less expensive fuels.
During the second half of 2025, tanker values increased, primarily because of higher TCE rates (resulting in part from geopolitical conditions) and limited shipyard capacity to construct tankers because of orders for other categories of vessels such as bulk carriers, container ships and LNG carriers. If INSW sells a vessel at a sale price that is less than the vessel’s carrying amount on the Company’s financial statements, INSW will incur a loss on the sale and a reduction in earnings and surplus. Declines in the values of the Company’s vessels could adversely affect the Company’s compliance with its loan covenants.
Declines in charter rates and other market deterioration could cause INSW to incur impairment charges.
The Company evaluates events and changes in circumstances that have occurred to determine whether they indicate that the carrying amounts of the vessel assets might not be recoverable. This review for potential impairment indicators and projection of future cash flows related to the vessels is complex and requires the Company to make various estimates, including with respect to future freight rates, earnings from the vessels, market appraisals and discount rates. All of these items have historically been volatile. The Company evaluates the recoverable amount of a vessel asset as the sum of its undiscounted estimated future cash flows. If the recoverable amount is less than the vessel’s carrying amount, the vessel’s carrying amount is then compared to its estimated fair value. If the vessel’s carrying amount is less than its fair value, it is deemed impaired. The carrying values of the Company’s vessels may differ significantly from their fair market value. The Company did not record any vessel impairment charges during 2025.
Changes in the worldwide supply of vessels or an expansion of the capacity of newly-built tankers, without a commensurate shift in demand for such vessels, may cause spot charter rates to increase or decline, affecting INSW’s revenues, profitability and cash flows, and the value of its vessels.
Changes in vessel supply have historically been a driver of both spot market rates and the overall cyclicality of the maritime industry. When the number of new ships of a particular class delivered exceeds the number of vessels of that class being recycled over a period, available capacity in that class increases. Although vessel recycling levels over any particular period will depend on various factors, including charter rates and recycling prices, the newbuilding order book (i.e., vessels in various stages of planning or construction that will be delivered in the future) represented approximately 17% and 14% of the existing world tanker fleet as of each of December 31, 2025 and 2024. In addition, if newly built tankers have more capacity than the tankers being recycled or otherwise removed from the active world fleet, overall tanker capacity will expand. Supply is also affected by the number of tankers being used for floating storage (which are thus not available to transport crude oil or petroleum products). Although currently only a relatively small percentage of the world tanker fleet is being used for storage at sea, that percentage varies over time, and is affected by expectations of changes in the price of oil and petroleum products, with vessel use generally increasing when prices are expected to increase more than storage costs and generally decreasing when they are not. Any of these factors may cause both spot charter rates and the value of the INSW’s vessels to fluctuate, and may have a material adverse effect on our revenues, profitability, cash flows and financial condition.
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Shipping is a business with inherent risks, and INSW’s insurance may not be adequate to cover its losses.
INSW’s vessels and their cargoes are at risk of being damaged or lost and its vessel crews and shoreside employees are at risk of injury or death because of events including, but not limited to:
marine disasters;
bad weather;
mechanical failures;
human error;
war, terrorism and piracy;
grounding, fire, explosions and collisions; and
other unforeseen circumstances or events.
These hazards may result in death or injury to persons; loss of revenues or property; demand for the payment of ransoms; environmental damage; higher insurance rates; damage to INSW’s customer relationships; and market disruptions, delay or rerouting, any or all of which may also subject INSW to litigation. In addition, transporting crude oil and refined petroleum products creates a risk of business interruptions due to political circumstances in foreign countries, hostilities, labor strikes, port closings and boycotts. The operation of tankers also has unique operational risks associated with the transportation of oil. An oil spill may cause significant environmental damage and the associated costs could exceed the insurance coverage available to the Company. Compared to other types of vessels, tankers are also exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability of the oil transported in tankers. Furthermore, any such incident could seriouslydamage INSW’s reputation and cause INSW either to lose business or to be less likely to be able to enter into new business (either because of customer concerns or changes in customer vetting processes). Any of these events could result in loss of revenues, decreased cash flows and increased costs.
While the Company carries insurance to protect against certain risks involved in the conduct of its business, risks may arise against which the Company is not adequately insured. For example, a catastrophic spill could exceed INSW’s $1.0 billion per vessel insurance coverage and have a material adverse effect on its operations. In addition, INSW may not be able to procure adequate insurance coverage at commercially reasonable rates in the future, and INSW cannot guarantee that any particular claim will be paid by its insurers. In the past, new and stricter environmental regulations have led to higher costs for insurance covering environmental damage or pollution, and new regulations could lead to similar increases or even make this type of insurance unavailable. Furthermore, even if insurance coverage is adequate to cover the Company’s losses, INSW may not be able to timely obtain a replacement ship or may suffer other consequential harm or difficulty in the event of a loss. INSW may also be subject to calls, or premiums, in amounts based not only on its own claim records but also the claim records of all other members of the protection and indemnity associations through which INSW obtains insurance coverage for tort liability. INSW’s payment of these calls could result in significant expenses which would reduce its profits and cash flows or cause losses.
Counterparty credit risk and constraints on capital availability may adversely affect INSW’s business.
Certain of the Company’s customers, financial lenders and suppliers may suffer material adverse impacts on their financial condition that could make them unable or unwilling to comply with their contractual commitments, including the refusal or inability to pay charter hire to INSW or an inability or unwillingness to lend funds. While INSW seeks to monitor the financial condition of its customers, financial lenders and suppliers, the availability and accuracy of information about the financial condition of such entities and the actions that INSW may take to reduce possible losses resulting from the failure of such entities to comply with their contractual obligations is limited. Any such failure could have a material adverse effect on INSW’s revenues, profitability and cash flows.
The Company also faces other potential constraints on capital relating to counterparty credit risk and constraints on INSW’s ability to borrow funds. See also “— Risks Related to Our Company — The Company is subject to credit risks with respect to its counterparties on contracts, and any failure by those counterparties to meet their obligations could cause the Company to sufferlosses on such contracts, decreasing revenues and earnings ” and “— Risks Related to Our Company — INSW has incurred significant indebtedness which could affect its ability to finance its operations, pursue desirable business opportunities and successfully run its business in the future, all of which could affect INSW’s ability to fulfill its obligations under that indebtedness .”
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The state of the global financial markets may adversely impact the Company’s ability to obtain additional financing on acceptable terms and otherwise negatively impact the Company’s business.
Global financial markets have been, and continue to be, volatile. There have been periods where there was a general decline in the willingness of banks and other financial institutions to extend credit, particularly in the shipping industry, due to regulatory pressures (e.g., Basel IV) and the historically volatile asset values of vessels, exacerbated by individual companies’ exposure to the spot market (i.e., without fixed or locked in time charter coverage). As the shipping industry is highly dependent on the availability of credit to finance and expand operations, it may be negatively affected by any such decline.
Also, concerns about the stability of financial markets generally and the solvency of counterparties specifically may increase the cost of obtaining money from the credit markets. Lenders may also enact tighter lending standards, refuse to refinance existing debt at all or on terms similar to current debt and reduce, and in some cases cease to provide funding to borrowers. Due to these factors, additional financing may not be available if needed and to the extent required, on acceptable terms or at all. If additional financing is not available when current facilities mature, or is available only on unfavorable terms, the Company may be unable to meet its obligations as they come due or the Company may be unable to execute its business strategy, complete additional vessel acquisitions, or otherwise take advantage of potential business opportunities as they arise.
INSW conducts its operations internationally, which subjects it to changing economic, political and governmental conditions that may adversely affect its business.
The Company conducts its operations internationally, and its business, financial condition, results of operations and cash flows may be adversely affected by changing economic, political and government conditions in the countries and regions where its vessels are employed, including:
regional or local economic downturns;
changes in governmental policy or regulation;
restrictions on the transfer of funds into or out of countries in which INSW or its customers operate;
difficulty in staffing and managing (including ensuring compliance with internal policies and controls) geographically widespread operations;
trade relations with foreign countries in which INSW’s customers and suppliers have operations, including protectionist measures such as tariffs and import or export licensing requirements;
general economic and political conditions, which may interfere with, among other things, the Company’s supply chain, its customers and all of INSW’s activities in a particular location;
difficulty in enforcing contractual obligations in non-U.S. jurisdictions and the collection of accounts receivable from foreign accounts;
different regulatory regimes in the various countries in which INSW operates;
inadequate intellectual property protection in foreign countries;
the difficulties and increased expenses in complying with multiple and potentially conflicting U.S. and foreign laws, regulations, security rules, product approvals and trade standards, anti-bribery laws, government sanctions and restrictions on doing business with certain nations or specially designated nationals;
import and export duties and quotas;
demands for improper payments from port officials or other government officials;
U.S. and foreign customs, tariffs and taxes;
currency exchange controls, restrictions and fluctuations, which could result in reduced revenue and increased operating expense;
international incidents;
transportation delays or interruptions;
local conflicts, acts of war, terrorist attacks or military conflicts;
changes in oil prices or disruptions in oil supplies that could substantially affect global trade, the Company’s customers’ operations and the Company’s business;
the imposition of taxes or fees by flag states, port states and jurisdictions in which INSW or its subsidiaries are incorporated or where its vessels operate; and
expropriation of INSW’s vessels.
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The occurrence of any such event could have a material adverse effect on the Company’s business.
Additionally, protectionist developments, or the perception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Governments may turn to trade barriers to protect their domestic industries against foreign imports, or to retaliateagainst other governments imposing tariffs, potentially depressing shipping demand. The United States government has made statements and taken actions that impact U.S. international trade policies, including imposing new tariffs on imports from Canada, Mexico and China, and those and other countries have imposed, or threatened to impose, retaliatory tariffs on imports from the United States. In particular, shifts in trade regulations or port-related regulatory actions in China and the United States, including changes to port fee structures, can create uncertainty around voyage costs and operational planning. We cannot predict the timing, outcome, or impact of future developments in the U.S., China or other countries’ trade regulations or tariff policy, and any such changes could materially adversely affect our business, financial condition or results of operations. Increasing trade protectionism may cause an increase in the cost of goods exported from regions globally, particularly the Asia-Pacific region and the risks associated with exporting goods, which may significantly affect the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs. Further, increased tensions may adversely affect oil demand, which would have an adverse effect on shipping rates.
INSW must comply with complex U.S. and non-U.S. laws and regulations, such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other local laws prohibiting corrupt payments to government officials; anti-money laundering laws; and competition regulations. Moreover, the shipping industry is generally considered to present elevated risks in these areas.
Violations of these laws and regulations could result in fines and penalties, criminal sanctions, restrictions on the Company’s business operations and on the Company’s ability to transport cargo to one or more countries, and could also materially affect the Company’s brand, ability to attract and retain employees, international operations, business and operating results. Although INSW has policies and procedures designed to achieve compliance with these laws and regulations, INSW cannot be certain that its employees, contractors, joint venture partners or agents will not violate these policies and procedures. INSW’s operations may also subject its employees and agents to extortion attempts.
Changes in fuel prices may adversely affect profits.
Fuel is a significant expense in the Company’s shipping operations when vessels are under voyage charter. Accordingly, an increase in the price of fuel may adversely affect the Company’s profitability if these increases cannot be passed onto customers. The price and supply of fuel is unpredictable and fluctuates based on events outside the Company’s control, including geopolitical developments; supply and demand for oil and gas; actions by OPEC, and other oil and gas producers; war and unrest in oil producing countries and regions; regional production patterns; and environmental concerns and regulations, including requirements to use certain fuels that are more costly.
Terrorist attacks and international hostilities and instability can affect the tanker industry, which could adversely affect INSW’s business.
Terrorist attacks, the outbreak of war, or the existence of international hostilities could damage the world economy, adversely affect the availability of and demand for crude oil and petroleum products and adversely affect both the Company’s ability to charter its vessels and the charter rates payable under any such charters. In addition, INSW operates in a sector of the economy that is likely to be adversely impacted by the effect of political instability, terrorist or other attacks, war or international hostilities. Political instability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region, in the Black Sea in connection with the war between Russia and Ukraine and in the Red Sea and the Gulf of Aden in connection with the Israel/Gaza conflict resulting from attacks by Iran-backed Houthi militants based in Yemen, respectively. Political tensions and heightened sanctions enforcement in other oil‑producing regions, such as Venezuela, may also contribute to volatility in global oil markets and pose additional risks to maritime operations. These factors could also increase the costs to the Company of conducting its business, particularly crew, insurance and security costs, and prevent or restrict the Company from obtaining insurance coverage, all of which have a material adverse effect on INSW’s business, financial condition, results of operations and cash flows.
In April 2019, Iran publicly threatened that it would interrupt the flow of oil through the Straits of Hormuz, the entrance to the Arabian Gulf. Commencing in May 2019, several vessels in the Arabian Gulf have been attacked, which attacks the United States has attributed to Iranian forces, and at least two vessels have been seized by Iran. Further the war between Russia and Ukraine and the
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Israel/Gaza conflict have resulted in attacks on commercial vessels in the Black Sea, Red Sea and Gulf of Aden in the 2022 – 2025 period. None of these attacks or seizures have involved the Company’s vessels. To date, these attacks and vessel seizures, while increasing the costs of the Company conducting its business to a limited extent, have not had a material adverse effect on INSW’s business, financial condition, results of operations and cash flow but no assurance can be given that continued vessel attacks or seizures will not do so.
Acts of piracy on ocean-going vessels could adversely affect the Company’s business.
The threat of pirate attacks on seagoing vessels remains, particularly off the west coast of Africa, the Gulf of Aden and in the South China Sea. If piracy attacks result in regions in which the Company’s vessels are deployed being characterized by insurers as “war risk” zones, as the Gulf of Aden has been, or Joint War Committee “war and strikes” listed areas, premiums payable for insurance coverage could increase significantly, and such insurance coverage may become difficult to obtain. Crew costs could also increase in such circumstances due to risks of piracy attacks.
In addition, while INSW believes the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released. A charterer may also claim that a vessel seized by pirates was not “on-hire” for a certain number of days and it is therefore entitled to cancel the charter party, a claim the Company would dispute. The Company may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on the Company. In addition, hijacking as a result of an act of piracy against the Company’s vessels, or an increase in the cost (or unavailability) of insurance for those vessels, could have a material adverse impact on INSW’s business, financial condition, results of operations and cash flows. Such attacks may also impact the Company’s customers, which could impair their ability to make payments to the Company under their charters.
Public health threats could have an adverse effect on the Company’s operations and financial results.
Public health threats and other highly communicable diseases, outbreaks of which have already occurred in various parts of the world near where INSW operates, could adversely impact the Company’s operations, the operations of the Company’s customers and the global economy, including the worldwide demand for crude oil and the level of demand for INSW’s services. Any quarantine of personnel, restrictions on travel to or from countries in which INSW operates, or inability to access certain areas could adversely affect the Company’s operations. Travel restrictions, operational problems or large-scale social unrest in any part of the world in which INSW operates, or any reduction in the demand for tanker services caused by public health threats in the future, may impact INSW’s operations and adversely affect the Company’s financial results.
Risks Related to Our Company
INSW has incurred significant indebtedness which could affect its ability to finance its operations, pursue desirable business opportunities and successfully run its business in the future, all of which could affect INSW’s ability to fulfill its obligations under that indebtedness.
As of December 31, 2025, INSW had approximately $567 million of outstanding indebtedness (including finance lease obligations), net of deferred finance costs. INSW’s substantial indebtedness and interest expense could have important consequences, including:
limiting INSW’s ability to use a substantial portion of its cash flow from operations in other areas of its business, including for working capital, capital expenditures and other general business activities, because INSW must dedicate a substantial portion of these funds to service its debt;
to the extent INSW’s future cash flows are insufficient, requiring the Company to seek to incur additional indebtedness in order to make planned capital expenditures and other expenses or investments;
limiting INSW’s ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions, and other expenses or investments planned by the Company;
limiting the Company’s flexibility and ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation, and INSW’s business and industry;
limiting INSW’s ability to satisfy its obligations under its indebtedness; and
increasing INSW’s vulnerability to a downturn in its business and to adverse economic and industry conditions generally.
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INSW’s ability to continue to fund its obligations and to reduce or refinance debt in the future may be affected by, among other things, the age of the Company’s fleet and general economic, financial market, competitive, legislative and regulatory factors. An inability to fund the Company’s debt requirements or reduce or refinance debt in the future could have a material adverse effect on INSW’s business, financial condition, results of operations and cash flows. Further, for certain lease transactions, including finance leases, the Company’s ability to prepay the lease is restricted so the lease obligations may remain outstanding throughout the lease term even if it is financially advantageous for the Company to prepay the lease.
Additionally, the actual or perceived credit quality of the Company’s or its pools’ charterers (as well as any defaults by them) could materially affect the Company’s ability to obtain the additional capital resources that it will require to purchase additional vessels or significantly increase the costs of obtaining such capital. The Company’s inability to obtain additional financing at an acceptable cost, or at all, could materially affect the Company’s results of operation and its ability to implement its business strategy.
The Company may not be able to generate sufficient cash to service all of its indebtedness and could in the future breach covenants in its credit facilities, term loans, and certain vessel charters.
The Company’s earnings, cash flow and the market value of its vessels vary significantly over time due to the cyclical nature of the tanker industry, as well as general economic and market conditions affecting the industry. As a result, the amount of debt that INSW can manage in some periods may not be appropriate in other periods and its ability to meet the financial covenants to which it is subject or may be subject in the future may vary. Additionally, future cash flow may be insufficient to meet the Company’s debt obligations and commitments. Any insufficiency could negatively impact INSW’s business.
The Company’s $500 Million Revolving Credit Facility and $160 Million Revolving Credit Facility contain customary representations, warranties, restrictions and covenants including financial covenants that require the Company (i) to maintain a minimum liquidity level of the greater of $50 million and 5% of the Company’s Consolidated Indebtedness; (ii) to ensure the Company’s and its consolidated subsidiaries’ Maximum Leverage Ratio will not exceed 0.60 to 1.00 at any time; (iii) to ensure that Current Assets exceeds Current Liabilities (which is defined to exclude the current portion of Consolidated Indebtedness); and (iv) to ensure the aggregate Fair Market Value of the Collateral Vessels under each facility will not be less than 135% of the aggregate outstanding principal amount of each facility. Certain of the Company’s other debt agreements, and its lease financing arrangements also contain similar financial covenants.
While the Company is in compliance with all of its loan covenants, a decrease in vessel values or a failure to meet collateral maintenance requirements could cause the Company to breach certain covenants in its existing credit facilities, term loans and vessel leases, or in future financing agreements that the Company may enter into from time to time. If the Company breaches such covenants and is unable to remedy the relevant breach or obtain a waiver, the Company’s lenders could accelerate its debt and lenders could foreclose on the Company’s owned vessels and the owners of certain vessels that the Company charters in could terminate such charters.
A range of economic, competitive, financial, business, industry and other factors will affect future financial performance, and, accordingly, the Company’s ability to generate cash flow from operations and to pay debt and to meet the financial covenants under the Company’s debt facilities. Many of these factors, such as charter rates, economic and financial conditions in the tanker industry and the global economy or competitive initiatives of competitors, are beyond the Company’s control. If INSW does not generate sufficient cash flow from operations to satisfy its debt obligations, it may have to undertake alternative financing plans, such as:
refinancing or restructuring its debt;
selling tankers or other assets;
reducing or delaying investments and capital expenditures; or
seeking to raise additional capital.
Undertaking alternative financing plans, if necessary, might not allow INSW to meet its debt obligations. The Company’s ability to restructure or refinance its debt will depend on the condition of the capital markets, its access to such markets and its financial condition at that time. Any refinancing of debt could be at higher interest rates and might require the Company to comply with more onerous covenants, which could further restrict INSW’s business operations. In addition, the terms of existing or future debt instruments may restrict INSW from adopting some alternative measures. These alternative measures may not be successful and may not permit INSW to meet its scheduled debt service obligations. The Company’s inability to generate sufficient cash flow to satisfy its
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debt obligations, to meet the covenants of its credit agreements and term loans and/or to obtain alternative financing in such circumstances, could materially and adversely affect INSW’s business, financial condition, results of operations and cash flows.
INSW is a holding company and depends on the ability of its subsidiaries to distribute funds to it in order to satisfy its financial obligation or pay dividends.
International Seaways, Inc. is a holding company, and its subsidiaries conduct all of its operations and own all of its operating assets. It has no significant assets other than the equity interests in its subsidiaries. As a result, its ability to satisfy its financial obligations or pay dividends depends on its subsidiaries and their ability to distribute funds to it. In addition, the terms of certain of the Company’s financing agreements restrict the ability of certain of those subsidiaries to distribute funds to International Seaways, Inc.
The Company will be required to make additional capital expenditures to expand the number of vessels in its fleet and to maintain all of its vessels, which depend on additional financing.
The Company’s business strategy is based in part upon the expansion of its fleet through the purchase of additional vessels at attractive points in the tanker cycle. The Company currently has newbuilding construction contracts for the purchase of four dual fuel LNG ready LR1s, which are scheduled to be delivered between the first and third quarters of 2026 (in addition to two dual fuel LNG ready LR1s which were delivered in September and October 2025). These contracts provide for installment payments of the purchase price to be made by the Company as the vessels are being built. If the Company is unable to fulfill its obligations under such contracts, the shipyard constructing such vessels may be permitted to terminate such contracts and the Company may be required to forfeit all or a portion of the down payments it made under such contracts and it may also be sued for any outstanding balance. In addition, as a vessel must be drydocked within five years of its delivery from a shipyard, with survey cycles of no more than 60 months for the first three surveys, and 30 months thereafter, not including any unexpected repairs, the Company will incur significant maintenance costs for its existing and any newly-acquired vessels. As a result, if the Company does not utilize its vessels as planned, these maintenance costs could have material adverse effects on the Company’s business, financial condition, results of operations and cash flows.
The Company depends on third-party service providers for technical and commercial management of its fleet.
The Company currently outsources to third-party service providers certain management services of its fleet, including technical management, certain aspects of commercial management and crew management. In particular, the Company has entered into ship management agreements that assign technical management responsibilities to a third-party technical manager for each conventional tanker in the Company’s fleet (collectively, the “Ship Management Agreements”). The Company has also transferred commercial management of much of its fleet to certain other third-party service providers, principally commercial pools.
In such outsourcing arrangements, the Company has transferred direct control over technical and commercial management of the relevant vessels, while maintaining significant oversight and audit rights, and must rely on third-party service providers to, among other things:
comply with contractual commitments to the Company, including with respect to safety, quality and environmental compliance of the operations of the Company’s vessels;
comply with requirements imposed by the U.S., the U.N., the U.K. and the EU (i) restricting calls on ports located in countries that are subject to sanctions and embargoes and (ii) prohibiting bribery and other corrupt practices;
respond to changes in customer demands for the Company’s vessels;
obtain supplies and materials necessary for the operation and maintenance of the Company’s vessels; and
mitigate the impact of labor shortages and/or disruptions relating to crews on the Company’s vessels.
The failure of third-party service providers to meet such commitments could lead to legal liability or other damages to the Company. The third-party service providers the Company has selected may not provide a standard of service comparable to that the Company would provide for such vessels if the Company directly provided such service. The Company relies on its third-party service providers to comply with applicable law, and a failure by such providers to comply with such laws may subject the Company to liability or damage its reputation even if the Company did not engage in the conduct itself. Furthermore, damage to any such third party service provider’s reputation, relationships or business may reflect on the Company directly or indirectly, and could have a material adverse effect on the Company’s reputation and business.
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The third-party technical managers have the right to terminate the Ship Management Agreements at any time with 90 days’ notice. If a third-party technical manager exercises that right, the Company will be required either to enter into substitute agreements with other third parties or to assume those management duties. The Company may not succeed in negotiating and entering into such agreements with other third parties and, even if it does so, the terms and conditions of such agreements may be less favorable to the Company. Furthermore, if the Company is required to dedicate internal resources to managing its fleet (including, but not limited to, hiring additional qualified personnel or diverting existing resources), that could result in increased costs and reduced efficiency and profitability. Any such changes could result in a temporary loss of customer approvals, could disrupt the Company’s business and have a material adverse effect on the Company’s business, results of operations and financial condition.
INSW’s business depends on voyage charters, and any future decrease in spot charter rates could adversely affect its earnings.
Voyage charters, including vessels operating in commercial pools that predominantly operate in the spot market, constituted 82% of INSW’s aggregate TCE revenues in the year ended December 31, 2025, 86% in 2024 and 91% in 2023. Accordingly, INSW’s shipping revenues are significantly affected by prevailing spot rates for voyage charters in the markets in which the Company’s vessels operate. The spot charter market may fluctuate significantly from time to time based upon tanker and oil supply and demand. The spot market is very volatile, and, in the past, there have been periods when spot charter rates have declined below the operating cost of vessels. The successful operation of INSW’s vessels in the competitive spot charter market depends on, among other things, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. If spot charter rates decline in the future, then INSW may be unable to operate its vessels trading in the spot market profitably, or meet its other obligations, including payments on indebtedness. Furthermore, as charter rates for spot charters are fixed for a single voyage, which may last up to several weeks during periods in which spot charter rates are rising or falling, INSW will generally experience delays in realizing the benefits from or experiencing the detriments of those changes. See also Item 1, “Business — Fleet Operations — Commercial Management.”
INSW may not be able to renew Time Charters when they expire or enter into new Time Charters.
INSW’s ability to renew expiring contracts or obtain new charters will depend on the prevailing market conditions at the time of renewal. As of December 31, 2025, INSW employed 13 of its vessels on time charters, with expiration dates ranging between March 2026 and April 2030. The Company’s existing time charters may not be renewed at comparable rates or if renewed or entered into, those new contracts may be at less favorable rates. In addition, there may be a gap in employment of vessels between current charters and subsequent charters. If, upon expiration of the existing time charters, INSW is unable to obtain time charters or voyage charters at desirable rates, the Company’s business, financial condition, results of operations and cash flows may be adversely affected.
Termination of, or a change in the nature of, INSW’s relationship with any of the commercial pools in which it participates could adversely affect its business.
As of December 31, 2025, nine of the Company’s 12 VLCCs participate in the TI pool; 11 of its 13 Suezmaxes participate in the Maersk Tankers pool; three of the Company’s four Aframaxes participate in the Aframax International pool; all seven of its LR1s participate in the PI pool; and 27 of the 33 MRs participate in the CPTA pool or NTP pool. INSW’s participation in these pools is intended to enhance the financial performance of the Company’s vessels through higher vessel utilization. Any participant in any of these pools has the right to withdraw upon notice in accordance with the relevant pool agreement. Changes in the management of, and the terms of, these pools (including as a result of changes adopted in conjunction with the implementation of the EU Emission Trading System), decreases in the number of vessels participating in these pools, or the termination of these pools, could result in increased costs and reduced efficiency and profitability for the Company.
In addition, in recent years the EU has published guidelines on the application of the EU antitrust rules to traditional agreements for maritime services such as commercial pools. While the Company believes that all the commercial pools it participates in comply with EU rules, there has been limited administrative and judicial interpretation of the rules. Restrictive interpretations of the guidelines could adversely affect the ability to commercially market the respective types of vessels in commercial pools.
In the highly competitive international market, INSW may not be able to compete effectively for charters.
The Company’s vessels are employed in a highly competitive market. Competition arises from other vessel owners, including major oil companies, which may have substantially greater resources than INSW. Competition for the transportation of crude oil and other petroleum products depends on price, location, size, age, condition and the acceptability of the vessel operator to the charterer. The
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Company believes that because ownership of the world tanker fleet is highly fragmented, no single vessel owner is able to influence charter rates.
INSW may not realize the benefits it expects from past acquisitions or acquisitions or other strategic transactions it may make in the future.
From time to time, INSW considers, and may make, acquisitions of individual vessels, groups of vessels, or shipping businesses. The success of any such acquisition will depend upon a number of factors, some of which may not be within its control. These factors include INSW’s ability to:
identify suitable tankers and/or shipping companies for acquisitions at attractive prices, which may not be possible if asset prices rise too quickly;
obtain financing;
integrate any acquired tankers or businesses successfully with INSW’s then-existing operations; and
enhance INSW’s customer base.
INSW intends to finance these acquisitions by using available cash from operations and through incurrence of debt, other financing sources or bridge financing, any of which may increase its leverage ratios, or by issuing equity, which may have a dilutive impact on its existing shareholders. At any given time INSW may be engaged in a number of discussions that may result in one or more acquisitions, some of which may be material to INSW as a whole. These opportunities require confidentiality and may involve negotiations that require quick responses by INSW. Although there can be no certainty that any of these discussions will result in definitive agreements or the completion of any transactions, the announcement of any such transaction may lead to increased volatility in the trading price of INSW’s securities.
Acquisitions and other transactions can also involve a number of special risks and challenges, including:
diversion of management time and attention from the Company’s existing business and other business opportunities;
delays in closing or the inability to close an acquisition for any reason, including third-party consents or approvals;
any unanticipatednegative impact on the Company of disclosed or undisclosed matters relating to any vessels or operations acquired; and
assumption of debt or other liabilities of the acquired business, including litigation related to the acquired business.
The success of acquisitions or strategic investments depends on the effective integration of newly acquired businesses or assets into INSW’s current operations. Such integration is subject to risks and uncertainties, including realization of anticipated synergies and cost savings, the ability to retain and attract personnel and clients, the diversion of management’s attention from other business concerns, and undisclosed or potential legal liabilities of the acquired company or asset. INSW may not realize the strategic and financial benefits that it expects from any of its past acquisitions, or any future acquisitions. Further, if a portion of the purchase price of a business is attributable to goodwill and if the acquired business does not perform up to expectations at the time of the acquisition, some or all of the goodwill may be written off, adversely affecting INSW’s earnings.
The smuggling or alleged smuggling of drugs or other contraband onto the Company’s vessels may lead to governmental claimsagainst the Company.
The Company expects that its vessels will call in ports where smugglers may attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent the Company’s vessels are found with or accused to be carrying contraband, whether inside or attached to the hull of our vessels and whether with or without the knowledge of any of its crew, the Company may face governmental or other regulatory claims which could have an adverse effect on the Company’s business, financial condition, results of operations and cash flows. Additionally, such events could have ancillary consequences under INSW’s financing and other agreements.
Operating costs and capital expenses will increase as the Company’s vessels age and may also increase due to unanticipated events relating to secondhand vessels and the consolidation of suppliers.
In general, capital expenditures and other costs necessary for maintaining a vessel in good operating condition increase as the age of the vessel increases. As of December 31, 2025, the weighted average age of the Company’s total owned and operated fleet was 10.9 years (which excludes the four remaining dual fuel LNG ready LR1s currently under construction and contracted for delivery to the
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Company by the third quarter of 2026). In addition, older vessels are typically less fuel-efficient than more recently constructed vessels due to improvements in engine technology. Accordingly, it is likely that the operating costs of INSW’s currently operated vessels will rise as the age of the Company’s fleet increases. In addition, changes in governmental regulations and compliance with Classification Society standards may restrict the type of activities in which the vessels may engage and/or may require INSW to make additional expenditures for new equipment. Every commercial tanker must pass inspection by a Classification Society authorized by the vessel’s country of registry. The Classification Society certifies that a tanker is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the tanker and the international conventions of which that country is a member. If a Classification Society requires the Company to add equipment, INSW may be required to incur substantial costs or take its vessels out of service. Market conditions may not justify such expenditures or permit INSW to operate its older vessels profitably even if those vessels remain operational. If a vessel in INSW’s fleet does not maintain its class and/or fails any survey, it will be unemployable and unable to trade between ports until its class is restored or such failure is remedied. This would negatively impact the Company’s results of operation.
In addition, the Company’s fleet includes a number of vessels purchased in the secondhand market or otherwise acquired after they have been constructed. While the Company typically inspects secondhand vessels before it purchases or otherwise acquires them, those inspections do not necessarily provide INSW with the same level of knowledge about those vessels’ condition that INSW would have had if these vessels had been built for and operated exclusively by it. The Company may not discover defects or other problems with such vessels before purchase, which may lead to expensive, unanticipated repairs, and could even result in accidents or other incidents for which the Company could be liable.
Furthermore, recent mergers have reduced the number of available suppliers, resulting in fewer alternatives for sourcing key supplies. With respect to certain items, INSW is generally dependent upon the original equipment manufacturer for repair and replacement of the item or its spare parts. Supplier consolidation may result in a shortage of supplies and services, thereby increasing the cost of supplies or potentially inhibiting the ability of suppliers to deliver on time. These cost increases or delays could result in downtime, and delays in the repair and maintenance of the Company’s vessels and have a material adverse effect on INSW’s business, financial condition, results of operations and cash flows.
The Company’s lightering business faces significant competition and market volatility, and revenues and profitability for these operations may vary significantly from period to period.
The Company provides STS transfer services, primarily in the crude oil and refined petroleum products industries. The seaborne markets for STS transfer business are highly competitive and our competitors may in some cases have greater resources than we do. The business also faces competition from alternative methods of delivering crude oil and refined petroleum products shipments to ports and vessels, including several offshore loading and offloading facilities either in operation or in various stages of planning in the USG region. Furthermore, the market for STS transfer services faces different competitive dynamics than our other tanker businesses, meaning that our expertise in the tanker markets may not apply in the same ways to our lightering business, and demand for lightering services has historically varied significantly from period to period based on customer activity in the regions in which we operate. Accordingly, our ability to maintain or grow our market share in STS transfer services may be limited, and the Company’s lightering revenues may be volatile or decline in the future.
The Company is subject to credit risks with respect to its counterparties on contracts, and any failure by those counterparties to meet their obligations could cause the Company to sufferlosses on such contracts, decreasing revenues and earnings.
The Company has entered into, and in the future will enter into, various contracts, including charter agreements and other agreements associated with the operation of its vessels. The Company charters its vessels to other parties, who pay the Company a daily rate of hire. The Company also enters voyage charters. Historically, the Company has not experienced material problems collecting charter hire. The Company also time charters or bareboat charters some of its vessels from other parties and its continued use and operation of such vessels depends on the vessel owners’ compliance with the terms of the time charter or bareboat charter. Additionally, the Company enters into derivative contracts (related to interest rate risk) from time to time. As a result, the Company is subject to credit risks. The ability of each of the Company’s counterparties to perform its obligations under a contract will depend on a number of factors that are beyond the Company’s control and may include, among other things, general economic conditions; availability of debt or equity financing; the condition of the maritime and offshore industries; the overall financial condition of the counterparty; charter rates received for specific types of vessels; and various expenses. Charterers are sensitive to the commodity markets and may be impacted by market forces affecting commodities such as oil. In addition, in depressed market conditions, the Company’s charterers
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and customers may no longer need a vessel that is currently under charter or contract or may be able to obtain a comparable vessel at lower rates. As a result, the Company’s customers may fail to pay charter hire or attempt to renegotiate charter rates. If the counterparties fail to meet their obligations, the Company could sufferlosses on such contracts which would decrease revenues, cash flows and earnings.
The Company relies on the skills of its senior management team, and if the Company were required to replace them, it could negatively impact the effectiveness of management and the Company’s results of operations could be negatively impacted.
INSW’s success depends to a significant extent upon the expertise, capabilities and efforts of its senior executives in managing the Company’s activities. INSW is led by executives with significant experience in their respective areas of responsibility, and the loss or unavailability of one or more of INSW’s senior executives for an extended period of time could adversely affect the Company’s business and results of operations.
The Company may face unexpected drydock costs for its vessels.
Vessels must be drydocked periodically. The cost of repairs and renewals required at each drydock are difficult to predict with certainty, can be substantial and the Company’s insurance does not cover these costs. In addition, vessels may have to be drydocked in the event of accidents or other unforeseendamage, and INSW’s insurance may not cover all of these costs. Vessels in drydock will not generate any income. Large drydocking expenses could adversely affect the Company’s results of operations and cash flows. In addition, the time when a vessel is out of service for maintenance is determined by a number of factors including regulatory deadlines, market conditions, shipyard availability and customer requirements, and accordingly the length of time that a vessel may be off-hire may be longer than anticipated, which could adversely affect the Company’s business, financial condition, results of operations and cash flows.
Technological innovation could reduce the Company’s charter income and the value of the Company’s vessels.
The charter rates and the value and operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of a vessel’s physical life is related to its original design and construction, its maintenance, the impact of the stress of operations and new regulations (including in particular regulations relating to GHG emissions). If new tankers are built that are more efficient or more flexible or have longer physical lives than the Company’s vessels, competition from these more technologically advanced vessels could adversely affect the charter rates that the Company receives for its vessels and the resale value of the Company’s vessels could significantly decrease. As a result, the Company’s business, financial condition, results of operations and cash flows could be adversely affected.
The Company stores, processes, maintains, and transmits confidential information through information technology (“IT”) systems. Cybersecurity issues, such as data breaches and computer malware, affecting INSW’s IT systems or those of its third-party vendors, suppliers or counterparties, could disrupt INSW’s business, result in the unintended disclosure or misuse of confidential or proprietary information, disruption in regular business operations, damage its reputation, increase its costs, and cause losses.
The Company collects, stores and transmits sensitive and business critical data, including its own proprietary business information and that of its counterparties, and personally identifiable information of counterparties and employees, using both its own IT systems and those of third-party vendors. In addition, the Company relies on the transmission of similarly sensitive data from the Company’s third-party suppliers and vendors. The safe storage, accurate processing, timely availability and secure transmission of this information is critical to INSW’s operations. The Company’s dependency on IT systems includes accounting, billing, disbursement, cargo booking and tracking, vessel scheduling and stowage, vessel operations, customer service, banking, payroll and messaging systems. The Company’s IT infrastructure, or those of its customers or third-party vendors, suppliers or counterparties, are vulnerable to data breaches, computer malware, and other security problems as well as failures caused by the occurrence of natural disasters or other unexpectedproblems. Many companies, including companies in the shipping industry, have increasingly reported breaches in the security of their information technology systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disrupt or degrade service, sabotage systems or cause other damage. The Company has experienced attempted attacks on its email system to obtain unauthorized access to confidential information.
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The Company may be required to spend significant capital and other resources to further protect itself and its systems againstthreats of security breaches and computer malware, or to alleviate problems caused by security breaches or malware. Security breaches and malware could also expose the Company to claims, litigation and other possible liabilities. Any inability to prevent security breaches (including the inability of INSW’s third-party vendors, suppliers or counterparties to prevent security breaches) could also cause existing clients to lose confidence in the Company’s IT systems and could adversely affect INSW’s reputation, cause losses to INSW or our customers, damage our brand, and increase our costs. In order to mitigate the financial impact of any losses arising from security breaches or computer malware, the Company has purchased insurance that covers losses arising from such breaches or malware, including data recovery, extortion, ransomware and business interruption.
INSW’s revenues are subject to seasonal variations.
INSW operates its tankers in markets that have historically exhibited seasonal variations in demand for tanker capacity, and therefore, charter rates. Peaks in tanker demand quite often precede seasonal oil consumption peaks, as refiners and suppliers anticipate consumer demand. Charter rates for tankers are typically higher in the fall and winter months as a result of increased oil consumption in the Northern Hemisphere. Unpredictable weather patterns and variations in oil reserves disrupt tanker scheduling. Because a majority of the Company’s vessels trade in the spot market, seasonality has affected INSW’s operating results on a quarter-to-quarter basis and could continue to do so in the future. Such seasonality may be outweighed in any period by then current economic conditions or tanker industry fundamentals.
Effective internal controls are necessary for the Company to provide reliable financial reports and effectively prevent fraud.
The Company maintains a system of internal controls to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
The process of designing and implementing effective internal controls is a continuous effort that requires the Company to anticipate and react to changes in its business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy its reporting obligations as a public company.
Any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. Any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase the Company’s operating costs and harm its business. Furthermore, investors’ perceptions that the Company’s internal controls are inadequate or that the Company is unable to produce accurate financial statements on a timely basis may harm its stock price.
Work stoppages or other labor disruptions may adversely affect INSW’s operations.
INSW could be adversely affected by actions taken by employees of other companies in related industries (including third parties providing services to INSW) against efforts by management to control labor costs, restrain wage or benefit increases or modify work practices or the failure of other companies in its industry to successfully negotiate collective bargaining agreements.
Risks Related to Legal and Regulatory Matters
Climate change and greenhouse gas restrictions may adversely affect our operating results .
An increasing concern for, and focus on climate change, has promoted extensive existing and proposed international, national and local regulations intended to reduce greenhouse gas emissions. Compliance with such regulations (including increased assessment, and greater reporting, of the environmental effects of our business) and our efforts to participate in reducing greenhouse gas emissions (“GHGs”) will likely increase our compliance costs, require significant capital expenditures to reduce vessel emissions and require changes to our business.
Our business consists of transporting crude oil and refined petroleum products. Regulatory changes and growing public concern about the environmental impact of climate change may lead to reduced demand for crude oil and refined petroleum products and decreased demand for our services, while increasing or creating greater incentives for use of alternative energy sources. We expect regulatory and consumer efforts aimed at combating climate change to intensify and accelerate. Although we do not expect demand for oil to decline dramatically over the short-term, in the long-term climate change likely will significantly affect demand for oil and for alternatives. Any such change could adversely affect our ability to compete in a changing market and our business, financial condition
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and results of operations. Further, no assurance can be given that capital expenditures we make to comply with existing or proposed environmental regulations or strategies that we adopt with respect to changes in demand for crude oil or refined petroleum products or in demand for our services will be successful.
Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our sustainability and governance policies may impose additional costs on us or expose us to additional risks.
Companies across all industries are facing increasing scrutiny relating to their sustainability and governance policies. Investor advocacy groups, certain institutional investors, investment funds, lenders and other market participants are increasingly focused on such practices and, in recent years, have placed increasing importance on the implications and social cost of their investments. The increased focus and activism related to these matters may hinder access to capital, as investors and lenders may decide to reallocate capital or to not commit capital as a result of their assessment of a company’s practices. Diminished access to capital could hinder our growth. Companies that do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for these issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and their business, financial condition and share price may be adversely affected.
We may face increasing pressures from investors, lenders and other market participants, which are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent procedures or standards so that our existing and future investors remain invested in us and make further investments in us, especially given our business of transporting crude oil and refined petroleum products. In addition, we will incur additional costs and require additional resources to monitor, report and comply with wide-ranging sustainability and governance requirements. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.
Compliance with complex laws, regulations, and, in particular, environmental laws or regulations, including those relating to the emission of greenhouse gases, may adversely affect INSW’s business.
General
The Company’s operations are affected by extensive and changing international, national and local environmental protection laws, regulations, treaties, conventions and standards in force in international waters, the jurisdictional waters of the countries in which INSW’s vessels operate, as well as the countries of its vessels’ registration. Many of these requirements are designed to reduce the emission of greenhouse gases and the risk of oil spills. They also regulate other water pollution issues, including discharge of ballast water and effluents and air emissions, including emission of greenhouse gases. These requirements impose significant capital and operating costs on INSW, including, without limitation, ones related to engine adjustments and ballast water treatment.
Environmental laws and regulations also can affect the resale value or significantly reduce the useful lives of the Company’s vessels, require a reduction in carrying capacity, ship modifications or operational changes or restrictions (and related increased operating costs) or retirement of service, lead to decreased availability or higher cost of insurance coverage for environmental matters or result in the denial of access to, or detention in, certain jurisdictional waters or ports. Under local, United States and international laws, as well as international treaties and conventions, INSW could incur material liabilities, including cleanup obligations, in the event that there is a release of petroleum or other hazardous substances from its vessels or otherwise in connection with its operations. INSW could also become subject to personal injury or property damageclaims relating to the release of or exposure to hazardous materials associated with its current or historic operations. Violations of or liabilities under environmental requirements also can result in substantial penalties, fines and other sanctions, including in certain instances, seizure or detention of the Company’s vessels.
Oil Pollution
INSW could incur significant costs, including cleanup costs, fines, penalties, third-party claims and natural resource damages, as the result of an oil spill or liabilities under environmental laws. The Company is subject to the oversight of several government agencies, including the U.S. Coast Guard and the EPA. OPA 90 affects all vessel owners shipping oil or hazardous material to, from or within the United States. OPA 90 allows for potentially unlimited liability without regard to fault for owners, operators and bareboat charterers of vessels for oil pollution in U.S. waters. Similarly, the International Convention on Civil Liability for Oil Pollution Damage, 1969, as amended, which has been adopted by most countries outside of the United States, imposes liability for oil pollution
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in international waters. OPA 90 expressly permits individual states to impose their own liability regimes with regard to hazardous materials and oil pollution incidents occurring within their boundaries. Coastal states in the United States have enacted pollution prevention liability and response laws, many providing for unlimited liability.
In addition, in complying with OPA 90, IMO regulations, EU directives and other existing laws and regulations and those that may be adopted, shipowners likely will incur substantial additional capital and/or operating expenditures in meeting new regulatory requirements, in developing contingency arrangements for potential spills and in obtaining insurance coverage. Key regulatory initiatives that are anticipated to require substantial additional capital and/or operating expenditures in the next several years include more stringent limits on the sulfur content of fuel oil for vessels operating in certain areas and more stringent requirements for management and treatment of ballast water.
Ballast Water
Certain of the Company’s vessels are subject to more stringent numeric discharge limits of ballast water under the EPA’s VGP, with additional vessels becoming subject in future years, even though those vessels have obtained a valid extension from the USCG for implementation of treatment technology under the USCG’s final rules. The EPA has determined that it will not issue extensions under the VGP but has stated that vessels that (i) have received an extension from the USCG, (ii) are in compliance with all of the VGP requirements other than numeric discharge limits and (iii) meet certain other requirements will be entitled to “low enforcement priority”. While INSW believes that any vessel that is or may become subject to the more stringent numeric discharge limits of ballast water meets the conditions for “low enforcement priority,” no assurance can be given that they will do so. If the EPA determines to enforce the limits for such vessels, such action could have a material adverse effect on INSW. Further, it is anticipated that in November 2026 the USCG will implement regulations under VIDA at which time the discharge of ballast water in the navigable waters of the United States will no longer be subject to the VGP. See Item 1, “Business —Environmental and Security Matters Relating to Bulk Shipping.”
Greenhouse Gas Emissions
Due to concern over the risk of climate change, a number of countries, including the United States, and international organizations, including the EU, the IMO and the U.N., have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These regulatory measures include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards, and incentives or mandates for renewable energy. Such actions could result in significant financial and operational impacts on the Company’s business, including requiring INSW to install new emission controls, acquire allowances or pay taxes related to its greenhouse gas emissions, or administer and manage a greenhouse gas emission program. See Item 1, “Business — Environmental and Security Matters Relating to Bulk Shipping”.
Other Impacts
Other government regulation of vessels, particularly in the areas of safety and environmental requirements, can be expected to become stricter in the future and require the Company to incur significant capital expenditures on its vessels to keep them in compliance, or even to recycle or sell certain vessels altogether. Such expenditures could result in financial and operational impacts that may be material to INSW’s financial statements. Additionally, the failure of a shipowner or bareboat charterer to comply with local, domestic and international regulations may subject it to increased liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. If any of our vessels are denied access to, or are detained in, certain ports, reputation, business, financial results and cash flows could be materially and adversely affected.
Accidents involving highly publicized oil spills and other mishaps involving vessels can be expected in the tanker industry, and such accidents or other events could be expected to result in the adoption of even stricter laws and regulations, which could limit the Company’s operations or its ability to do business and which could have a material adverse effect on INSW’s business, financial results and cash flows. In addition, the Company is required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to its operations. The Company believes its vessels are maintained in good condition in compliance with present regulatory requirements, are operated in compliance with applicable safety and environmental laws and regulations and are insured against usual risks for such amounts as the Company’s management deems appropriate. The vessels’ operating certificates and licenses are renewed periodically during each vessel’s required annual survey. However,
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government regulation of tankers, particularly in the areas of safety and environmental impact may change in the future and require the Company to incur significant capital expenditures with respect to its ships to keep them in compliance.
Employment of the Company’s vessels could be adversely affected by an inability to clear the oil majors’ risk assessment process.
The shipping industry, and especially vessels that transport crude oil and refined petroleum products, is heavily regulated. In addition, the “oil majors” such as BP, Chevron Corporation, Phillips 66, ExxonMobil Corp., Royal Dutch Shell and Total S.A. have developed a strict due diligence process for selecting their shipping partners out of concerns for the environmental impact of spills. This vetting process has evolved into a sophisticated and comprehensive risk assessment of both the vessel manager and the vessel, including audits of the management office and physical inspections of the ship. Under the terms of the Company’s charter agreements (including those entered into by pools in which the Company participates), the Company’s charterers require that the Company’s vessels and the technical managers pass vetting inspections and management audits, respectively. The Company’s failure to maintain any of its vessels to the standards required by the oil majors could put the Company in breach of the applicable charter agreement and lead to termination of such agreement. Should the Company not be able to successfully clear the oil majors’ risk assessment processes on an ongoing basis, the future employment of the Company’s vessels could also be adversely affected. since it might lead to the oil majors’ terminating existing charters.
The Company’s vessels may be directed to call on ports located in countries that are subject to restrictions imposed by the U.S., the U.N., the U.K. or the EU, which could negatively affect the trading price of the Company’s common shares.
From time to time, certain of the Company’s vessels, on the instructions of the charterers or pool manager responsible for the commercial management of such vessels, have called and may again call on ports located in countries or territories, and/or operated by persons, subject to sanctions and embargoes imposed by the U.S., the U.N., the U.K. or the EU and countries identified by the U.S., the U.N., the U.K. or the EU as state sponsors of terrorism. The U.S., U.N., the U.K. 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 or expanded over time. Some sanctions may also apply to transportation of goods (including crude oil) originating in sanctioned countries (particularly Iran, Venezuela and Russia), even if the vessel does not travel to those countries, or is otherwise acting on behalf of sanctioned persons. Sanctions may include the imposition of penalties and finesagainst companies violating national law or companies acting outside the jurisdiction of the sanctioning power themselves becoming the target of sanctions.
Although INSW believes that it is in compliance with all applicable sanctions and embargo laws and regulations and intends to maintain such compliance, and INSW does not, and does not intend to, engage in sanctionable activity, INSW might fail to comply or may inadvertently engage in a sanctionable activity in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation or sanctionable activity could result in fines or other penalties, or the imposition of sanctions against the Company, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in the Company and negatively affect INSW’s reputation and investor perception of the value of INSW’s common stock.
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An increase in trade protectionism and regulations issued by the United States to impose significant fees on vessels entering a U.S. port where that vessel was constructed in China or is owned or operated by a Chinese entity, and orders issued by China to impose comparable fees on vessels entering a Chinese port where that vessel was not constructed in China and is owned or operated by a United States controlled entity could adversely impact our results of operation, financial condition and cash flows.
Protectionist trade developments, such as increased tariffs on imports, or the perception that they may occur, may have an adverse effect on global economic conditions, and may significantly affect and/or reduce global trade. Governments may increasingly turn to trade barriers to protect their domestic industries against foreign imports or to retaliateagainst other governments imposing tariffs, potentially depressing shipping demand. The United States government has made statements and taken actions that impact U.S. international trade policies, including imposing new tariffs on imports from Canada, Mexico and China, and those and other countries have imposed, or threatened to impose, retaliatory tariffs on imports from the United States. In addition, the United States issued regulations in October 2025 that certain vessels that were constructed in China or operated by a Chinese entity are charged a fee based on their net tonnage upon entering a U.S. port, which fee increases over time. The Company currently owns 13 vessels that were constructed in China (four of which are below the 55,000 dwt minimum to which the U.S. fees apply), time charters in one vessel that was constructed in China and bareboat charters in three non-Chinese built vessels from a Chinese financial institution in a financing leasing arrangement. China issued orders that became effective at the same time as the United States regulations that imposed comparable fees on certain vessels that were not constructed in China and that are owned or operated by a United States controlled entity (which includes a company formed in the U.S., where the board is composed of more than 25% U.S. persons or where the company is more than 25% owned by U.S. persons), upon the entry of such vessels to a Chinese port. While the Chinese order is subject to final interpretation and enforcement, the Company has certain vessels that may be subject to the Chinese order. On November 10, 2025, the United States and China each suspended its port fee orders for one year. We cannot predict the timing, outcome, or impact of future developments in the U.S., China or other countries’ trade regulations or tariff policy, including whether the suspension of port fees will terminate earlier than the one-year period or will be extended, and any such changes could materially adversely affect our business, financial condition or results of operations.
The Company may be subject to litigation and government inquiries or investigations that, if not resolved in the Company’s favor and not sufficiently covered by insurance, could have a material adverse effect on it.
The Company has been and is, from time to time, involved in various litigation matters and subject to government inquiries and investigations. These matters may include, among other things, regulatory proceedings and litigation arising out of or relating to contract disputes, personal injuryclaims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, sanctions and other regulatory compliance, and other disputes that arise in the ordinary course of the Company’s business.
Although the Company intends to defend these matters vigorously, it cannot predict with certainty the outcome or effect of any such matter, and the ultimate outcome of these matters or the potential costs to resolve them could involve or result in significant expenditures or losses by the Company, or result in significant changes to INSW’s insurance costs, rules and practices in dealing with its customers, all of which could have a material adverse effect on the Company’s future operating results, including profitability, cash flows, and financial condition. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent, which may have a material adverse effect on the Company’s financial condition. The Company’s recorded liabilities and estimates of reasonably possible losses for its contingent liabilities are based on its assessment of potential liability using the information available to the Company at the time and, as applicable, any past experience and trends with respect to similar matters. However, because litigation is inherently uncertain, the Company’s estimates for contingent liabilities may be insufficient to cover the actual liabilities from such claims, resulting in a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. See Item 3, “Legal Proceedings” in this Annual Report on Form 10-K and Note 18, “Contingencies,” to the Company’s consolidated financial statements set forth in Item 8, “Financial Statements and Supplementary Data.”
Maritime claimants could arrest INSW’s vessels, which could interrupt cash flows.
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 the Company’s vessels could interrupt INSW’s cash flow and require it to pay a significant amount of money to have the arrest lifted. In addition, in some jurisdictions, such
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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, meaning any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one vessel in the Company’s fleet for claims relating to another vessel in its fleet which, if successful, could have an adverse effect on the Company’s business, financial condition, results of operations and cash flows.
Governments could requisition the Company’s vessels during a period of war or emergency, which may negatively impact the Company’s business, financial condition, results of operations and available cash.
A government could requisition one or more of the Company’s vessels for title or hire. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of the Company’s vessels may negatively impact the Company’s business, financial condition, results of operations and available cash.
We may be subject to U.S. federal income tax on U.S. source shipping income, which would reduce our net income and cash flows.
If we do not qualify for an exemption pursuant to Section 883, or the “Section 883 exemption,” of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) then we will be subject to U.S. federal income tax on our shipping income that is derived from U.S. sources. If we are subject to such tax, our results of operations and cash flows would be reduced by the amount of such tax. We will qualify for the Section 883 exemption for 2026 and forward if, among other things, (i) our common shares are treated as primarily and regularly traded on an established securities market in the United States or another qualified country (“publicly traded test”), or (ii) we satisfy one of two other ownership tests. Under applicable U.S. Treasury Regulations, the publicly traded test will not be satisfied in any taxable year in which persons who directly, indirectly or constructively own five percent or more of our common shares (sometimes referred to as “5% shareholders”) own in the aggregate 50% or more of the vote and value of our common shares for more than half the days in such year, unless an exception applies. We can provide no assurance that ownership of our common shares by 5% shareholders will allow us to qualify for the Section 883 exemption in 2025 and any other future taxable years. If we do not qualify for the Section 883 exemption, our gross shipping income derived from U.S. sources, i.e., 50% of our gross shipping income attributable to transportation beginning or ending in the United States (but not both beginning and ending in the United States), generally would be subject to a four percent tax without allowance for deductions.
U.S. tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. shareholders.
A non-U.S. corporation generally will be treated as a “passive foreign investment company,” or a “PFIC,” for U.S. federal income tax purposes if, after applying certain look through rules, either (i) at least 75% of its gross income for any taxable year consists of “passive income” or (ii) at least 50% of the average value of assets (determined on a quarterly basis) held for the production of “passive income.” We refer to assets which produce or are held for production of “passive income” as “passive assets.” For purposes of these tests, “passive income” generally includes dividends, interest, gains from the sale or exchange of investment property and rental income and royalties other than rental income and royalties which are received from unrelated parties in connection with the active conduct of a trade or business, as defined in applicable U.S. Treasury Regulations. Passive income does not include income derived from the performance of services. Although there is no authority under the PFIC rules directly on point, and existing legal authority in other contexts is inconsistent in its treatment of time charter income, we believe that the gross income we derive or are deemed to derive from our time and spot chartering activities is services income, rather than rental income. Accordingly, we believe that (i) our income from time and spot chartering activities does not constitute passive income and (ii) the assets that we own and operate in connection with the production of that income do not constitute passive assets. Therefore, we believe that we are not now and have never been a PFIC with respect to any taxable year. There is no assurance that the IRS or a court of law will accept our position and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, because there are uncertainties in the application of the PFIC rules and PFIC status is determined annually and is based on the composition of a company’s income and assets (which are subject to change), we can provide no assurance that we will not become a PFIC in any future taxable year. If we were to be treated as a PFIC for any taxable year (and regardless of whether we remain as a PFIC for subsequent taxable years), our U.S. shareholders would be subject to a disadvantageous U.S. federal income tax regime with respect to distributions received from us and gain, if any, derived from the sale or other disposition of our common shares. These adverse tax consequences to shareholders could negatively impact our ability to issue additional equity in order to raise the capital necessary for our business operations.
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Pending and future tax law changes may result in significant additional taxes to us.
Tax laws, including tax rates, in the jurisdictions in which we operate may change as a result of macroeconomic or other factors outside of our control and may result in significant additional taxes to us. For example, various governments and organizations such as the EU and Organization for Economic Co-operation Development (or the OECD) are increasingly focused on tax reform and other legislative or regulatory action to increase tax revenue. In January 2019, the OECD announced further work in continuation of its Base Erosion and Profit Shifting project, focusing on two “pillars”. Pillar One provides a framework for the reallocation of certain residual profits of multinational enterprises to market jurisdictions where goods or services are used or consumed. Pillar Two consists of two interrelated rules referred to as Global Anti-Base Erosion Rules, which operate to impose a minimum tax rate of 15% calculated on a jurisdictional basis. The Pillar Two Model Rules are designed to ensure that large multinational enterprises (MNEs) that have annual revenues of €750 million or more in at least two of the four fiscal years immediately preceding the tested fiscal year pay a minimum level of tax on the income arising in each jurisdiction where they operate. In October 2021, more than 130 countries tentatively signed on to a framework that imposes a minimum tax rate of 15%, among other provisions. The framework calls for law enactment by OECD and G20 members in 2022 to take effect in 2024 and 2025. Qualifying International Shipping Income is exempt from many aspects of this framework if the exemption requirements are satisfied. As currently drafted, the exemption requirements are limited to the extent strategic and/or commercial management of ships are carried on from within the jurisdiction in which the ship owning and revenue generating entity is domiciled. On December 20, 2021, the OECD published model rules to implement the Pillar Two rules, which are generally consistent with the agreement reached by the framework in October 2021. On December 12, 2022, the EU member states agreed to implement the OECD’s Pillar Two global corporate minimum tax rate of 15% on MNEs with revenues of at least €750 million, which became effective in 2024. A number of countries have adopted the OECD’s minimum tax rules and have implemented these rules or local versions of these rules effective January 1, 2024. None of the Company’s subsidiaries were domiciled in such jurisdictions as of December 31, 2024, however. these laws as enacted and implemented could result in additional tax imposed on us or our subsidiaries if we or our subsidiaries decide to do business from such jurisdictions in the future.
Following a redomiciliation effort that began in September 2025, as of December 31, 2025, all of the Company’s vessel owning subsidiaries and certain intermediate holding company subsidiaries are domiciled in Bermuda. Bermuda has adopted Pillar Two–aligned domestic corporate income tax rules under the Bermuda Corporate Income Tax Act 2023 (the “ Bermuda CIT Act”), effective for fiscal years beginning on or after January 1, 2025. The Bermuda CIT Act is closely aligned with the OECD Pillar Two Model Rules and generally imposes a 15% corporate income tax on Bermuda constituent entities (as defined in the Bermuda CIT Act) that are part of an in‑scope multinational enterprise group. Although the Bermuda CIT Act provides an exclusion for Qualifying International Shipping Income that is substantially similar to the exclusion under the Pillar Two Model Rules, the availability of such exclusion depends on satisfaction of detailed substance-based requirements, including that the strategic or commercial management of vessels is effectively carried on from within Bermuda. Additionally, Bermuda does not impose a separate “top‑up” tax under the Pillar Two framework, which could lead to other countries in which we operate or may operate in the future to seek to impose additional tax on our income if they determine that the Qualifying International Shipping Income exclusion is unavailable or improperly applied. While we currently believe that our shipping income is expected to qualify for this Qualifying International Shipping Income exclusion, there can be no assurance that tax authorities will not challenge our satisfaction of the applicable requirements, that future guidance will not interpret the exclusion more narrowly, or that all of our income streams will continue to qualify. Any such challenge, change in interpretation, or failure to satisfy the applicable requirements could result in additional tax liabilities, increased compliance obligations, or adverse effects on our results of operations.
In addition, national or local tax authorities may assert other claims in various circumstances. During 2023, the tax authorities in one country notified many international shipping companies, including the Company, that they may have failed to comply with extant laws applicable in such country with respect to registration, reporting possible income derived from such country, filing of appropriate tax returns, and payment of relevant taxes with respect to international shipping operations. While the law has been in place for many years, there has not been any previous enforcement and there is significant lack of clarity as to who may be subject to tax under the legislation and what income, if any, may be subject to taxation. Similarly, the status of the taxation of international shipping income in certain other countries is equally uncertain. The Company believes that any income tax liability that may arise in all such countries would not be material to the Company, but no assurance can be made as to the amount of any such liability, if any.
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Risks Related to the Common Stock
We are incorporated in the Marshall Islands, which does not have a well-developed body of corporate case law or bankruptcy law, and, as a result, shareholders may have fewer rights and protections under Marshall Islands law than under a typical jurisdiction in the United States.
Our corporate affairs are governed by our articles of incorporation and bylaws and by the Marshall Islands Business Corporations Act (the "BCA"). The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the law 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 certain U.S. jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, our shareholders may have more difficulty in protecting their interests in the face of actions by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction. In addition, the Marshall Islands does not have a well-developed body of bankruptcy law. As such, in the case of a bankruptcy involving us, there may be a delay of bankruptcy proceedings and the ability of securityholders and creditors to receive recovery after a bankruptcy proceeding, and any such recovery may be less predictable.
It may be difficult to serve process on or enforce a United States judgment against us, our officers and our directors because we are a foreign corporation.
We are a corporation formed in the Republic of the Marshall Islands. In addition, a substantial portion of our assets are located outside of the United States, principally in Bermuda. As a result, you may have difficulty serving legal process within the United States upon us. You may also have difficulty enforcing, both in and outside the United States, judgments you may obtain in U.S. courts against us or our directors and officers, including in actions based upon the civil liability provisions of U.S. federal or state securities laws. Furthermore, there is substantial doubt that the courts of the Republic of the Marshall Islands or of the non-U.S. jurisdictions in which our offices are located would enter judgments in original actions brought in those courts predicated on U.S. federal or state securities laws.
The market price of the Company’s securities may fluctuate significantly.
The Company’s common stock is listed on the New York Stock Exchange. However, the market price of the Company’s common stock may fluctuate substantially. You may not be able to resell your common stock at or above the price you paid for such securities due to a number of factors, some of which are beyond the Company’s control. These risks include those described or referred to in this “Risk Factors” section and under “Forward -Looking Statements,” as well as, among other things: fluctuations in the Company’s operating results; activities of and results of operations of the Company’s competitors; changes in the Company’s relationships with the Company’s customers or the Company’s vendors; changes in business or regulatory conditions; changes in the Company’s capital structure; any announcements by the Company or its competitors of significant acquisitions, strategic alliances or joint ventures; additions or departures of key personnel; investors’ general perception of the Company; failure to meet market expectations; future sales of the Company’s securities by it, directors, executives and significant stockholders; changes in domestic and international economic and political conditions; and other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events. Any of the foregoing factors could also cause the price of the Company’s equity securities to fall and may expose the Company to securities class action litigation. Any securities class action litigation could result in substantial costs and the diversion of management’s attention and resources.
In addition, the stock market has recently experienced volatility that, in some cases, has been unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of the Company’s common stock, regardless of its actual operating performance.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about the Company’s business, the price and/or trading volume of shares of the Company’s common stock could decline.
The trading market for shares of the Company’s common stock depends, in part, on the research and reports that securities or industry analysts publish about the Company and its business. If too few analysts commence and maintain coverage of the
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Company, the trading price for its shares might be adversely affected. Similarly, if analysts publish inaccurate or unfavorable research about the Company’s business, the price and/or trading volume of shares of the Company’s common stock could decline.
Our limited duration Amended and Restated Stockholders Rights plan dated as of April 11, 2023 (the “Amended and Restated Rights Plan”), also known as a “poison pill”, may discourage, delay or prevent a change of control of the Company or changes in our management and, therefore, depress the market price of the Company’s common stock .
The Amended and Restated Rights Plan is intended to enable all Company stockholders to realize the long-term value of their investment in the Company. The Amended and Restated Rights Plan reduces the likelihood that any person or group gains control of the Company through open market accumulation, or other tactics potentially disadvantaging the interests of all stockholders, without paying all stockholders an appropriate control premium or providing the Company’s Board of Directors sufficient time to make informed decisions in the best interests of all stockholders. The Amended and Restated Rights Plan was ratified by the Company’s stockholders at the Company’s Annual Meeting of Stockholders on June 6, 2023. While the Amended and Restated Rights Agreement was effective immediately, the Rights become exercisable only if a person or group acquires beneficial ownership, as defined in the Rights Agreement, of 20% or more of the Company’s common stock in a transaction not approved by the Company's Board of Directors. In that situation, each holder of a Right (other than the acquiring person or group) will have the right to purchase, upon payment of the then-current exercise price, a number of shares of Company common stock having a market value of twice the exercise price of the Right. In addition, at any time after a person or group acquires 20% or more of the Company’s common stock (unless such person or group acquires 50% or more), the Company’s Board of Directors may exchange one share of the Company’s common stock for each outstanding Right (other than Rights owned by such person or group, which would have become null and void). The Amended and Restated Rights Plan is not intended to interfere with any transaction that the Board of Directors determines is in the best interests of stockholders, nor does the Amended and Restated Rights Plan prevent the Board of Directors from considering any proposal. The Amended and Restated Rights Plan will expire on April 10, 2026, subject to earlier termination by the Company’s Board of Directors if the Board determines that market and other conditions warrant.
Notwithstanding the foregoing advantages provided by the Amended and Restated Rights Plan to the interests of all stockholders, the Amended and Restated Rights Plan, while in effect, may depress the market price of the Company’s common stock by acting to discourage, delay or prevent a change of control of the Company or changes in the management of the Company that the stockholders of the Company may deem advantageous.
Future offerings of debt or equity securities by the Company may materially adversely affect the share price, and future capitalization measures could lead to substantial dilution of existing stockholders’ interests in the Company.
The Company may seek to raise additional equity through the issuance of new shares or convertible or exchangeable bonds to finance future organic growth or acquisitions. Increasing the number of issued shares would dilute the ownership interests of existing stockholders. Stockholders’ ownership interests could also be diluted if other companies or equity interests in companies are acquired in exchange for new shares of the Company’s common stock to be issued and if the Company’s Board of Directors makes grants of equity awards to the Company’s directors, officers and employees pursuant to any equity incentive or compensation plan, any such grants would also cause dilution.
INSW may not continue to pay cash dividends on its Common Stock.
During 2025, 2024 and 2023 INSW paid regular quarterly and supplemental cash dividends totaling $144.6 million or $2.93 per share, $284.4 million or $5.77 per share, and $308.2 million or $6.29 per share, respectively. Any future determinations to pay dividends on its Common Stock will be at the discretion of its Board of Directors and will depend upon many factors, including INSW’s future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors its Board of Directors may deem relevant. The timing, declaration, amount and payment of any future dividends will be at the discretion of INSW’s Board of Directors. INSW has no obligation to, and may not be able to, declare or pay dividends on its Common Stock. If INSW does not declare and pay dividends on its Common Stock, its share price could decline.
volatility
Critical Accounting Estimates and Policies. This section identifies those accounting policies that are considered important to our results of operations and financial condition, require significant judgment and involve significant management estimates.
A detailed discussion of the 2024 to 2023 year-over-year changes is not included herein and can be found in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 filed on February 27, 2025.
GENERAL
We are a provider of ocean transportation services for crude oil and refined petroleum products. We operate our vessels in the International Flag market. Our business includes two reportable segments: Crude Tankers and Product Carriers. For the years ended December 31, 2025 and 2024 we derived 52% and 47%, respectively, of our TCE revenues from our Crude Tankers segment. Revenues from our Product Carriers segment constituted the balance of our TCE revenues during these periods.
As of December 31, 2025, the Company’s operating fleet consisted of 70 wholly-owned or lease financed and time chartered-in vessels aggregating 8.4 million deadweight tons (“dwt”). In addition to our operating fleet of 70 vessels, four LR1 newbuilds are scheduled for delivery to the Company between the first and third quarters of 2026, bringing the total operating and newbuild fleet to 74 vessels. Our fleet includes VLCC, Suezmax and Aframax crude tankers and LR2, LR1 and MR product carriers.
The Company’s revenues are impacted by (i) the patterns of supply and demand for vessels of the size and design configurations owned and operated by the Company and the trades in which those vessels operate and (ii) the Company’s vessel employment strategy, which seeks to achieve an optimal mix of spot (voyage charter) and long-term (time charter) charters.
Supply and Demand for Vessels
The global fleet supply is affected by newbuilding deliveries and by the removal of existing vessels from service, principally through storage, recycling or conversions. Rates for the transportation of crude oil and refined petroleum products from which the Company earns a substantial majority of its revenues are determined by market forces such as the supply and demand for oil, the distance that
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cargoes must be transported, and the number of vessels expected to be available at the time such cargoes need to be transported. The demand for oil shipments is significantly affected by general U.S. domestic and international economic conditions and actual or expected supply chain disruptions and inflation, war and political instability in oil producing countries or regions, government regulations (both in the United States and internationally), levels of consumer demand, adverse weather and other conditions, which are beyond our control, that impact the levels of U.S. domestic and international production and OPEC+ exports.
The geopolitical and macroeconomic consequences of political instability and armed conflict including the instability in Venezuela, the Russian-Ukraine war, conflicts in the Israel-Gaza region and continued hostilities in the Middle East, including those between Israel, Iran and the United States, continue to have ongoing direct and indirect repercussions on the global trade of crude oil and refined petroleum products.
The Russian-Ukraine war has resulted in the United States, United Kingdom, and the European Union, and other countries implementing sanctions and executive orders against citizens, entities, and activities connected to Russia. Some of these sanctions and executive orders target the Russian oil sector, including a prohibition on the import of oil from Russia to the United States or the United Kingdom, and the EU's ban on Russian crude oil and petroleum products, which took effect in December 2022 and February 2023, respectively.
Russia’s invasion of Ukraine also led to a disruption in supply chains for crude oil and refined petroleum products, changing volumes and trade routes, thus increasing ton-mile demand for the seaborne transportation of both crude oil and refined petroleum products, which has resulted in a prolonged spike in freight rates. Self-sanctioning by Western oil majors and many shipowners resulted in disrupted product flows, primarily diesel, from Russia to Europe, while high arbitrage spreads incentivized Middle Eastern and U.S. diesel flows to Europe, increasing ton-mile demand for vessels.
The U.S., EU nations and other countries could impose wider sanctions and take other actions. Further sanctions imposed or actions taken by the U.S., EU nations or other countries, and retaliatory measures by Russia in response, could lead to increased volatility in global oil demand, which could have a material impact on our business, results of operations and financial condition. In addition, it is possible that third parties with which we do business may be impacted by events in Russia and Ukraine, which could adversely affect us.
Military hostilities in the Middle East, including those in the Israel-Gaza region and those between Israel, Iran, the Houthis of Yemen and the United States have had both a direct and an indirect impact on the transportation of crude oil and refined petroleum products through the region. Heightened security risks because of attacks and threats of attacks on merchant vessels transiting through the region led to an increase in ton-mile demand for vessels as more vessel owners were opting to re-route their vessels around the Cape of Good Hope. Such hostilities also led to periodic increases in charter rates to compensate vessel owners for the heightened risks as well as increases in war risk insurance premiums.
The United States’ naval blockade of oil exports from Venezuela on sanctioned vessels has also resulted in a shift of trade from sanctioned vessels to unsanctioned vessels as the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) has recently expanded its issuance of licenses, which authorize various oil trading activities involving Venezuela (including transportation).
See Item 1A, Risk Factors – Terrorist attacks and international hostilities and instability can affect the tanker industry, which could adversely affect INSW’s business .
Vessel Employment Strategy
The Company’s revenues are also affected by its vessel employment strategy, which seeks to achieve the optimal mix of spot (voyage charter) and long-term (time or bareboat charter) charters. Because shipping revenues and voyage expenses are significantly affected by the mix between voyage charters and time charters, the Company measures the performance of its fleet of vessels based on TCE revenues. Management makes economic decisions based on anticipated TCE rates and evaluates financial performance based on TCE rates achieved.
Our revenues are derived predominantly from spot market voyage charters and our vessels are predominantly employed in the spot market via market-leading commercial pools. We derived approximately 82% and 86% of our total TCE revenues in the spot market for the years ended December 31, 2025 and 2024, respectively. The future minimum revenues, before reduction for brokerage
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commissions, expected to be received on non-cancelable time charters for three VLCCs, two Suezmaxes, one Aframax, one LR2 and six MRs as of December 31, 2025 are as follows:
(Dollars in millions)
Amount (1)
Future minimum revenues
Future minimum contracted revenues do not include the Company’s share of time charters entered into by the pools in which it participates or profit-sharing above the base rate on the time charters of its dual-fuel LNG VLCCs. In arriving at the minimum future charter revenues, an estimated time off-hire to perform periodic maintenance on each vessel has been deducted, although there is no assurance that such estimate will be reflective of the actual off-hire in the future.
See Item 1, “Business — Fleet Operations,” for further information on our vessel employment strategy.
OPERATIONS AND OIL TANKER MARKETS
The International Energy Agency (“IEA”) estimates global oil consumption for the fourth quarter of 2025 at 105.1 million barrels per day (“b/d”), up 0.8% from the same quarter in 2024. The estimate for global oil consumption for 2026 is 105.0 million b/d, an increase of 1.0% over the 2025 estimate of 104.0 million b/d. OECD demand in 2026 is estimated to increase by 0.2% to 45.8 million b/d, while non-OECD demand is estimated to increase by 1.5% to 59.2 million b/d.
Global oil production in the fourth quarter of 2025 was 107.2 million b/d, an increase of 4.1 million b/d from the fourth quarter of 2024. OPEC crude oil production averaged 28.5 million b/d in the fourth quarter of 2025, up 0.6 million b/d from the third quarter of 2025, and an increase of 1.8 million b/d from the fourth quarter of 2024. Non-OPEC production increased by 2.1 million b/d to 73.0 million b/d in the fourth quarter of 2025 compared with the fourth quarter of 2024. Oil production in the U.S. of 13.9 million b/d in the fourth quarter of 2025 increased by 1.2% from the third quarter of 2025 and by 2.5% from the fourth quarter of 2024.
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U.S. refinery throughput decreased by 1.4 million b/d to 16.0 million b/d in the fourth quarter of 2025 compared with the third quarter of 2025.
U.S. crude oil imports in the fourth quarter of 2025 decreased by 7.1% to 5.9 million b/d compared with the fourth quarter of 2024, with imports from OPEC countries decreasing by 0.2 million b/d and imports from non-OPEC countries decreasing by 0.3 million b/d. China’s crude oil imports in December 2025 were 13.2 million b/d, up 10% from November 2025 and up 17% from December 2024. China’s crude oil imports increased 4.4% in 2025 compared with 2024.
OECD commercial crude inventories in the fourth quarter of 2025 increased by 3.0%, or 39 million barrels, compared with the third quarter of 2025. OECD commercial product inventories in the fourth quarter of 2025 increased by 2.7%, or 39 million barrels, compared with the third quarter of 2025.
During the fourth quarter of 2025, the tanker fleet of vessels over 10,000 dwt increased, net of vessels recycled, by 2.6 million dwt. The crude fleet increased by 1.3 million dwt, with VLCCs, Suezmaxes and Aframaxes increasing by 0.3 million dwt, 0.1 million dwt and 0.8 million dwt, respectively. The product carrier fleet increased by 1.3 million dwt, with LR1s decreasing by 0.1 million dwt and MRs increasing by 1.4 million dwt. Year-over-year, the size of the tanker fleet increased by 14.6 million dwt with the increases of 0.6 million dwt, 3.5 million dwt, 5.4 million dwt and 5.3 million dwt in the VLCCs, Suezmax, Aframax and MR fleets, respectively. The LR1 fleet decreased by 0.1 million dwt.
During the fourth quarter of 2025, the tanker orderbook increased by 17.7 million dwt. The crude tanker orderbook increased by 18.0 million dwt. The VLCC, Suezmax and Aframax orderbooks increased by 12.4 million dwt, 2.4 million dwt and 3.3 million dwt, respectively. The product carrier orderbook decreased by 0.3 million dwt, with the LR1 orderbook increasing by 0.1 million dwt and the MR orderbook decreasing by 0.4 million dwt. Year-over-year, the total tanker orderbook increased by 23.6 million dwt, with increases in VLCC and Suezmaxes of 19.0 million dwt and 6.4 million dwt, respectively. The LR1 orderbook remained flat, while the Aframax and MR orderbooks decreased by 0.4 million dwt and 1.4 million dwt, respectively.
Tanker rates were strong in the fourth quarter of 2025 compared with the third quarter of 2025. VLCCs, in particular, saw large increases in rates (to well over $100,000/day) in November and early December 2025 before decreasing towards the end of the year. So far, during the first quarter of 2026 there has been a further strengthening in VLCC rates. Other sectors remained strong throughout the fourth quarter, continuing into the start of 2026.
RESULTS FROM VESSEL OPERATIONS
During 2025, income from vessel operations decreased by $109.8 million to $345.4 million from $455.2 million in 2024. Such decrease resulted principally from (i) a year-over-year decrease in TCE revenues and (ii) increased depreciation and amortization, partially offset by (iii) larger gains on vessel sales and (iv) lower vessel expenses in the current year.
The decrease in TCE revenues in 2025 of $113.5 million, or 12%, to $819.6 million from $933.1 million in 2024 primarily reflects (i) a net aggregate rates-based decrease of $112.4 million resulting from lower average daily rates in the Product Carrier sectors, (ii) a $26.2 million days-based decline in the VLCC fleet associated with the first quarter of 2025 sales of one 2010-built VLCC and one 2011-built VLCC and (iii) a $16.7 million decrease in the Crude Tankers Lightering business. Partially offsetting the TCE revenue decreases described above were (i) a rates-based increase in the VLCC fleet of $26.4 million due to strengthening rates in the sector and (ii) a $10.2 million days-based increase in the MR fleet, which reflects the timing of the acquisition of nine modern MRs between April 2024 and January 2025 as compared to the sales of 11 older vessels in the fleet between April 2024 and December 2025.
The following tables provide a quarterly trend analysis of spot TCE rates earned between the fourth quarter of 2024 and 2025 by our Crude Tankers and Product Carriers fleet. See the “Operations and Oil Tanker Markets” discussion above for a description of the market factors that impacted the quarterly trend of spot rates during 2025.
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Spot Earnings for the Quarter Ended
Crude Tankers
December 31,
March 31,
June 30,
September 30,
December 31,
VLCC:
Average rate
Revenue days
Suezmax:
Average rate
Revenue days
Aframax:
Average rate
Revenue days
Spot Earnings for the Quarter Ended
Product Carriers
December 31,
March 31,
June 30,
September 30,
December 31,
Average rate
Revenue days
Average rate
Revenue days
See Note 4, “Business and Segment Reporting,” to the Company’s consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for additional information on the Company’s segments, including reconciliations of (i) time charter equivalent revenues to shipping revenues and (ii) adjusted income from vessel operations for the segments to income before income taxes, as reported in the consolidated statements of operations.
Crude Tankers
(Dollars in thousands, except daily rate amounts)
TCE revenues
Vessel expenses
Charter hire expenses
Depreciation and amortization
Adjusted income from vessel operations (a)
Average daily TCE rate
Average number of owned vessels (b)
Average number of vessels chartered-in under leases
Number of revenue days (c)
Number of ship-operating days (d)
Owned vessels
Vessels bareboat chartered-in under leases (e)
Vessels spot chartered-in under leases (f)
Adjusted income from vessel operations by segment is before general and administrative expenses, other operating expenses, third-party debt modification fees and gain on disposal of vessels and other property, net of impairments.
The average is calculated to reflect the addition and disposal of vessels during the period.
Revenue days represent ship-operating days less days that vessels were not available for employment due to repairs, drydock or lay-up. Revenue days are weighted to reflect the Company’s interest in chartered-in vessels.
Ship-operating days represent calendar days.
Represents nine VLCCs that secured lease financing arrangements during the periods presented. In November 2025 the Company purchased six of the VLCCs that it had been bareboat chartering-in. See Note 8, “Debt,” to the accompanying consolidated
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financial statements as set forth in Item 8, “Financial Statements and Supplemental Data,” for additional information on these transactions.
Represents vessels spot chartered-in by the Company’s Crude Tankers Lightering business for full service lightering jobs.
The following table provides a breakdown of TCE rates achieved for the years ended December 31, 2025 and 2024 between spot and fixed earnings and the related revenue days. The information is based, in part, on information provided by the commercial pools in which the segment’s vessels participate and excludes commercial pool fees/commissions averaging approximately $1,126 and $982 per day in 2025 and 2024, respectively, as well as activity in the Crude Tankers Lightering business and revenue and revenue days for which recoveries were recorded by the Company under its loss of hire insurance policies. The fixed earnings rates in the table are net of broker/address commissions.
Spot Earnings
Fixed Earnings
Spot Earnings
Fixed Earnings
VLCC (1) :
Average rate
Revenue days
Suezmax:
Average rate
Revenue days
Aframax (2) :
Average rate
Revenue days
The average spot rate reported in the table above for VLCCs in 2025 represents VLCCs less than 15 years of age. The average spot TCE rates earned by the Company’s VLCCs on an overall basis during such period was $44,817.
During 2024, one of the Company’s Aframaxes was employed on a transitional voyage in the spot market outside of its ordinary course operations in the Aframax International Pool. Such transitional voyage is excluded from the table above.
During 2025, TCE revenues for the Crude Tankers segment decreased by $13.8 million, or 3%, to $423.3 million from $437.1 million in 2024. Such decrease principally resulted from (i) a $26.2 million days-based decline in the VLCC sector, which reflected the sales of one 2010-built VLCC and one 2011-built VLCC during the first quarter of 2025, and 67 more off-hire days during the current year which included 47 drydocking days for a 2020-built VLCC acquired by the Company in November 2025 and (ii) a $16.7 million decrease in the Crude Tankers Lightering business. Partially offsetting the TCE revenue decreases described above were (i) a rates-based increase in the VLCC fleet of $26.4 million due to strengthening rates in the sector and (ii) a days-based increase of $5.2 million in the Aframax fleet reflecting 162 fewer off-hire days in the current year.
Vessel expenses decreased by $10.8 million to $119.3 million in 2025 from $130.1 million in 2024. Such decrease was driven principally by the sales of the two VLCCs noted above. De preciation and amortization decreased by $4.6 million to $76.3 million in 2025 from $81.1 million in 2024 principally as a result of the sales of the two VLCCs noted above.
Excluding depreciation and amortization and general and administrative expenses, operating income for the Crude Tankers Lightering business was $7.8 million for 2025 compared to $23.3 million for 2024. The decrease reflects decreased activity levels year-over-year, with 329 service support only lighterings and four full-service lighterings being performed during 2025 compared to the 459 service support only lighterings and six full-service lightering that were performed during 2024. The decreased lightering activity levels during 2025 reflects the impact of geopolitical dynamics and volatile market conditions that disrupted supply chains and resulted in a shift from the use of large crude carriers for the fulfillment of oil cargo demand to the use of smaller crude carriers, which did not require transshipment.
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Product Carriers
(Dollars in thousands, except daily rate amounts)
TCE revenues
Vessel expenses
Charter hire expenses
Depreciation and amortization
Adjusted income from vessel operations
Average daily TCE rate
Average number of owned vessels
Average number of vessels chartered-in under leases
Number of revenue days
Number of ship-operating days
Owned vessels
Vessels bareboat chartered-in under leases (a)
Vessels time chartered-in under leases
Represents MRs that secured lease financing arrangements during the periods presented.
The following table provides a breakdown of TCE rates achieved for the years ended December 31, 2025 and 2024 between spot and fixed earnings and the related revenue days. The information is based, in part, on information provided by the commercial pools in which the segment’s vessels participate and excludes commercial pool fees/commissions averaging approximately $793 and $850 per day in 2025 and 2024, respectively, as well as revenue and revenue days for which recoveries were recorded by the Company under its loss of hire insurance policies. The fixed earnings rates in the table are net of broker/address commissions.
Spot Earnings
Fixed Earnings
Spot Earnings
Fixed Earnings
Average rate
Revenue days
Average rate
Revenue days
Average rate
Revenue days
During 2025 and 2024, certain of the Company’s LR1s and MRs were employed on transitional voyages in the spot market outside of their ordinary course operations in the commercial pools in which they are deployed. Such transitional voyages are excluded from the table above.
In order to take advantage of market conditions and optimize economic performance, management employs all of the Company’s LR1 product carriers, which operate in the Panamax International pool, exclusively in the transportation of crude oil cargoes.
During 2025, TCE revenues for the Product Carriers segment decreased by $99.7 million, or 20%, to $396.3 million from $496.0 million in 2024. The reduction in TCE revenues was primarily as a result of an aggregate $112.4 million rates-based decrease in the LR2, LR1 and MR sectors due to lower average daily blended rates earned in the current year. Partially offsetting the rates-based decrease were (i) a $10.2 million days-based increase in the MR sector, which reflects the net impact of the Company’s acquisition of nine MRs between April 2024 and January 2025 and sale of 11 MRs between April 2024 and December 2025 and (ii) a $2.5 million days-based increase in the LR2 sector, which reflects 56 fewer off-hire days in the current year.
Vessel expenses during 2025 increased by $1.3 million to $146.9 million from $145.6 million in 2024. Such increase was principally attributable to the timing of the net changes in our MR fleet referenced above, partially offset by the decrease in owned LR1 days in 2025. Charter hire expenses increased by $3.3 million to $18.8 million in 2025 from $15.5 million in 2024 primarily as a result of a year-over-year increase in time chartered-in LR1 days. Depreciation and amortization increased by $18.8 million to $87.2 million in
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the current year from $68.5 million in the prior year. Such increase resulted from increased drydock amortization and the MR purchases and sales referenced above, as the acquired vessels have higher cost bases than the older vessels that were sold.
General and Administrative Expenses
During 2025, general and administrative expenses decreased by $2.4 million to $50.2 million from $52.6 million in 2024. The primary drivers for the decrease were (i) lower legal fees of $1.4 million, principally incurred in connection with a commercial dispute, and (ii) a $0.7 million decrease in compensation, benefits and hiring and relocation costs, of which $0.3 million relates to a decrease in non-cash stock compensation.
Other Operating Expenses
See Note 16, “Other Operating Expenses,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for additional information on these expenses.
Other Income
Other income was $6.2 million for the year ended December 31, 2025 compared with $10.1 million for the year ended December 31, 2024. The current year income includes $7.6 million of interest income compared to interest income of $9.9 million earned during 2024. The year-over-year decrease reflects the impact of a lower average balance of invested cash during 2025, attributable to the significant deleveraging initiatives completed during 2024, as well as a decrease in interest rates in 2025. Interest income in 2025 was partially offset by a $0.3 million loss on extinguishment of debt and a $1.8 million write-off of unamortized deferred financing costs in connection with the prepayment of the Ocean Yield Lease Financing in November 2025. The 2025 and 2024 periods also reflect net actuarial gains or losses and currency gains or losses associated with the Company’s retirement benefit obligation in the United Kingdom. See Note 8, “Debt,” and Note 17, “Other Income,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for further information .
Interest Expense
The components of interest expense are as follows:
(Dollars in thousands)
Interest before items shown below
Interest cost on defined benefit pension obligation and other interest costs
Impact of interest rate hedge derivatives
Capitalized interest
Interest expense
Interest expense decreased in 2025 compared to 2024 as a result of (i) a reduction in the average outstanding principal balance under the Company’s revolving credit facilities, due to voluntary repayment of certain of such facilities since April 2024, (ii) the repayment in full of the ING Credit Facility in April 2024, and (iii) the decline of SOFR rates in 2025 compared to the prior year. Those year-over-year decreases were partially offset by $6.3 million of interest expense incurred on the ECA Credit Facility and the 2030 Bonds, which were issued during 2025. See Note 8, “Debt,” to the accompanying consolidated financial statements as set forth in Item 8, “Financial Statements and Supplementary Data,” for further information on the Company’s debt facilities .
Income Tax Benefit
We qualified for an exemption pursuant to Section 883, or the “Section 883 exemption,” of the U.S. Internal Revenue Code of 1986, as amended, or the “Code,” for the tax year ended December 31, 2025. We will qualify for the Section 883 exemption for 2026 and forward if, among other things, (i) our common shares are treated as primarily and regularly traded on an established securities market in the United States or another qualified country (“publicly traded test”), or (ii) we satisfy one of two other ownership tests. Under applicable U.S. Treasury Regulations, the publicly traded test will not be satisfied in any taxable year in which persons who directly, indirectly or constructively own five percent or more of our common shares (sometimes referred to as “5% shareholders”) own in the
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aggregate 50% or more of the vote and value of our common shares for more than half the days in such year, unless an exception applies. We can provide no assurance that ownership of our common shares by 5% shareholders will allow us to qualify for the Section 883 exemption in future taxable years. If we do not qualify for the Section 883 exemption, our gross shipping income derived from U.S. sources, i.e., 50% of our gross shipping income attributable to transportation beginning or ending in the United States (but not both beginning and ending in the United States), generally would be subject to a U.S. federal income tax of four percent without allowance for deductions.
The Company reviews its freight tax obligations on a regular basis and may update its assessment of its tax positions based on available information at that time. Such information may include additional legal advice as to the applicability of freight taxes in relevant jurisdictions. Freight tax regulations are subject to change and interpretation; therefore, the amounts recorded by the Company may change accordingly. During 2025 the Company decreased its reserve for uncertain tax liabilities for various jurisdictions by $0.4 million compared to a $1.1 million decrease in such reserves during 2024.
Beginning in September 2025, in an effort to maximize future operational and strategic flexibility while maintaining compliance with evolving global tax regulations that are focused on the alignment of the jurisdictions in which an entity’s commercial or strategic management are performed with where its profits are realized, the Company commenced the process of changing the domicile of its international shipping income generating vessel-owning subsidiaries and various intermediate parent holding companies under International Seaways, Inc. from the Marshall Islands and Liberia to Bermuda. The redomiciliation process was completed in December 2025.The Company itself remains organized under the laws of the Republic of the Marshall Islands.
In general, income arising from international shipping is exempted from the scope of corporate income tax chargeable to a Bermuda Constituent Entity Group (as defined in the Bermuda CIT Act) to the extent that the applicable substance-based requirements relating to strategic or commercial management in Bermuda are satisfied. Accordingly, in compliance with the Bermuda CIT Act and the Bermuda economic substance requirements, the strategic management of the Company’s international shipping income generating subsidiaries and their intermediate parent holding companies was carried out from Bermuda, following their redomiciliation between September and December 2025. See Note 10, “Taxes,” to the Company’s consolidated financial statements set forth in Item 8, “Financial Statements and Supplementary Data,” for further details on the income tax benefit line and the tax implications of redomiciling the Company’s international shipping income generating vessel-owning subsidiaries and their intermediate holding companies to Bermuda.
EBITDA and Adjusted EBITDA
EBITDA represents net income before interest expense, income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA are presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. EBITDA and Adjusted EBITDA do not represent, and should not be considered a substitute for, net income or cash flows from operations determined in accordance with GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results reported under GAAP. Some of the limitations are:
EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and
EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt.
While EBITDA and Adjusted EBITDA are frequently used by companies as a measure of operating results and performance, neither of those items as prepared by the Company is necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.
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The following table reconciles net income, as reflected in the consolidated statements of operations set forth in Item 8, “Financial Statements and Supplementary Data,” to EBITDA and Adjusted EBITDA:
(Dollars in thousands)
Net income
Income tax benefit
Interest expense
Depreciation and amortization
EBITDA
Third-party debt modification fees
Gain on disposal of vessels and assets, net of impairments
Provision for settlement of multi-employer pension plan obligations
Write-off of deferred financing costs
Loss on extinguishment of debt
Adjusted EBITDA
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LIQUIDITY AND SOURCES OF CAPITAL
Our business is capital intensive. Our ability to successfully implement our strategy is dependent on the continued availability of capital on attractive terms. In addition, our ability to successfully operate our business to meet near-term and long-term debt repayment obligations is dependent on maintaining sufficient liquidity.
Liquidity
As of December 31, 2025, we had total liquidity on a consolidated basis of $723.6 million comprised of $166.9 million of cash and $556.7 million of undrawn revolver capacity.
Working capital at December 31, 2025 and 2024 was $268.2 million and $245.4 million, respectively. Current assets are highly liquid, consisting principally of cash, interest-bearing deposits, short-term investments, which are time deposits with original maturities of between 91 and 180 days, and receivables. Current liabilities include current installments of long-term debt of $25.8 million and $50.1 million at December 31, 2025 and 2024, respectively.
The Company’s total cash decreased by $40.6 million during the year ended December 31, 2025. This decrease principally reflects the net impact of (i) $319.8 million in proceeds from the issuance of debt, net of deferred financing costs; (ii) $144.6 million of net loan repayments under the $500 Million Revolving Credit Facility; (iii) $144.6 million of cash dividends paid to shareholders; (iv) $46.0 million in regularly scheduled principal amortization of the Company’s lease financing arrangements; (v) $257.5 million of prepayment in full on the Ocean Yield Lease Financing; (vi) $380.1 million of cash provided by operating activities; (vii) $56.9 million in returned security deposits and net proceeds from the sale of two VLCCs, two LR1s, and eight MRs, net of the purchase of two MRs and one VLCC; (viii) $146.9 million in other expenditures for vessels, vessel improvements and other property, of which $142.9 million was construction in progress payments; and (ix) $50.0 million in investments in short-term time deposits.
Our cash and cash equivalents balances generally exceed Federal Deposit Insurance Corporation insured limits. We place our cash and cash equivalents in what we believe to be credit-worthy financial institutions. In addition, certain of our money market accounts invest in U.S. Treasury securities or other obligations issued or guaranteed by the U.S. government or its agencies, floating rate and variable demand notes of U.S. and foreign corporations, commercial paper rated in the highest category by Moody’s Investor Services and Standard & Poor’s, certificates of deposit and time deposits, asset-backed securities, and repurchase agreements.
As of December 31, 2025, we had total debt outstanding (net of deferred financing costs of $11.1 million) of $567.1 million and a net debt to total capitalization of 16.5%, which compares with 22.2% at December 31, 2024.
Sources, Uses and Management of Capital
During 2025, we have (i) used incremental liquidity generated from operations and the proceeds from disposal of older tonnage at strong prices to invest in renewing and growing the fleet, (ii) enhanced our balance sheet and liquidity position, and (iii) continued to make substantial returns to shareholders.
In addition to future operating cash flows, our other future sources of funds are proceeds from issuances of equity securities, additional borrowings as permitted under our loan agreements and proceeds from the opportunistic sales of our vessels. Our current uses of funds are to fund working capital requirements, maintain the quality of our vessels, purchase vessels, pay newbuilding construction costs, comply with international shipping standards and environmental laws and regulations, repay or repurchase our outstanding loan facilities, pay a regular quarterly cash dividend, and from time-to-time, repurchase shares of our common stock and pay supplemental cash dividends.
The following is a summary of the significant capital allocation initiatives we executed during 2025 and the sources of capital we have at our disposal for future use as well as our current commitments for future uses of capital :
Returns to Shareholders
During 2025, the Company’s Board of Directors declared and paid regular quarterly and supplemental cash dividends totaling $144.6 million or $2.93 per share as follows:
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Declaration Date
Record Date
Payment Date
Regular Quarterly Dividend per Share
Supplemental Dividend per Share
Total Dividends Paid
February 26, 2025
March 14, 2025
March 28, 2025
$34.5 million
May 7, 2025
June 12, 2025
June 26, 2025
$29.6 million
August 5, 2025
September 10, 2025
September 24, 2025
$38.0 million
November 5, 2025
December 9, 2025
December 23, 2025
$42.5 million
Also on February 25, 2026, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.12 per share of common stock and a supplemental dividend of $2.03 per share of common stock. Both dividends will be paid on March 30, 2026 to stockholders of record as of March 20, 2026.
In October 2025, the Company’s Board of Directors authorized the extension of the expiry date of the Company’s $50.0 million share repurchase program from December 31, 2025 to December 31, 2026.
Fleet Optimization Program
In continuation of our strategic fleet optimization program during 2025, we:
Completed the last of five vessel sale and purchase transactions involving the sale of one 2010-built VLCC and one 2011-built VLCC for an aggregate sales price of $116.6 million and the purchase of three 2015-built MRs (the first of which was delivered in December 2024) for an aggregate purchase price of $119.5 million resulting in a net cash outflow of $2.9 million between December 2024 and February 2025.
Completed the sales of two 2006-built LR1s, five 2007-built MRs, and three 2008-built MRs for net proceeds of $131.0 million.
Purchased a 2020-built, scrubber fitted VLCC in November 2025 for $119.0 million.
Took delivery between September and October 2025 of the first two of six LR1 newbuildings under construction in Korea with K Shipbuilding Co., Ltd. The aggregate contract price for the six scrubber-fitted, dual-fuel ready LR1 vessels is approximately $359 million. As of December 31, 2025, the Company has approximately $188.5 million in remaining construction costs, of which approximately $158 million is expected to be drawn from the ECA Credit Facility in accordance with the delivery schedule. The remaining four LR1s are expected to be delivered by third quarter of 2026.
Entered into memoranda of agreements between December 2025 and February 2026, for the sale of one 2007-built MR Product Carrier, four 2008-built MR Product Carriers, one 2010-built VLCC and one 2012-built VLCC for net proceeds of approximately $216.4 million after fees and commissions. All seven vessels are expected to be delivered to their buyers in the first quarter of 2026.
Balance Sheet Enhancements
Further building on our liquidity enhancing, deleveraging and financing initiatives, we executed the following transactions during 2025:
In August 2025, we entered into a credit agreement (the “ECA Credit Facility”), which consists of (1) a 12-year term loan facility of up to $239.7 million and (2) a commercial credit facility of up to $91.9 million, collectively for use in respect of partly financing the acquisition of six LR1 newbuildings under construction at K Shipbuilding Co., Ltd in Korea. Between September and October 2025, the Company borrowed $81.5 million under the ECA Credit Facility upon the delivery of the first two LR1 newbuildings. The facilities combine for an effective 20-year amortization profile and a blended margin of 1.25% over a 12-year stated maturity.
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In September 2025, we issued $250 million aggregate principal amount of 7.125% senior unsecured bonds (the “2030 Bonds”) maturing on September 23, 2030 (unless earlier redeemed or repurchased), at an issue price of 100%. Interest will be paid semi-annually in arrears on March 23 and September 23 each year, commencing March 23, 2026 (and subject to business day conventions). The 2030 Bonds have a denomination of $0.125 million, and application will be made to list the 2030 Bonds on the Oslo Stock Exchange during the first half of 2026. We used the net proceeds from the 2030 Bonds to retire higher-cost debt outstanding under the Ocean Yield Lease Financing.
In November 2025, we exercised purchase options on six VLCCs, which were bareboat chartered-in under the Ocean Yield Lease Financing arrangements. The aggregate purchase price for the six vessels of $257.8 million, consisted of the $257.5 million remaining debt balance and $0.3 million of other costs. We used net proceeds from the 2030 Bonds and available liquidity to pay the purchase price.
During 2025, we drew $80 million under our $500 Million Revolving Credit Facility and repaid an aggregate of $224.6 million of the principal balance outstanding under this facility, leaving the facility fully undrawn as of December 31, 2025.
See Note 8, “Debt,” to the Company’s consolidated financial statements set forth in Item 8, “Financial Statements and Supplementary Data” of this Form 10-K for further information on the ECA Credit Facility and the 2030 Bonds. The Company’s debt service commitments and aggregate purchase commitments for vessel construction and betterments as of December 31, 2025, are presented in the Aggregate Contractual Obligations Table below.
Outlook
Our strong balance sheet, as evidenced by a substantial level of liquidity, 31 unencumbered vessels (excluding the four LR1s under construction) as of December 31, 2025, and diversified financing sources with debt maturities spread out between 2030 and 2037, positions us to support our operations over the next twelve months as we continue to advance our vessel employment strategy, which seeks to achieve an optimal mix of spot (voyage charter) and long-term (time charter) charters. Our balance sheet strength and balanced fleet position us to continue pursuing our disciplined capital allocation strategy of fleet renewal, incremental debt reduction and returns to shareholders and pursue potential strategic opportunities that may arise within the diverse sectors in which we operate.
Aggregate Contractual Obligations
A summary of the Company’s long-term contractual obligations as of December 31, 2025 follows:
Beyond
(Dollars in thousands)
Total
$500 Million Revolving Credit Facility (1)
$160 Million Revolving Credit Facility (1)
ECA Credit Facility - floating rate (2)
2030 Bonds - fixed rate
BoComm Lease Financing - fixed rate (3)
Toshin Lease Financing - fixed rate (3)
Hyuga Lease Financing - fixed rate (3)
Kaiyo Lease Financing - fixed rate (3)
Kaisha Lease Financing - fixed rate (3)
Operating lease obligations (4)
Time Charter-ins
Office space
Vessel and vessel betterment commitments (5)
Total
Amounts shown include unused revolver capacity commitment fees.
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Amounts shown include unused commitment fees and contractual interest obligations on $81.5 million of outstanding floating rate debt estimated based on the applicable margin for the ECA Credit Facility of 1.1% and the fixed rate stated in the interest rate swaps (assigned for hedge accounting purposes) of 2.84% through the swap maturity date of February 22, 2027. The effective three-month SOFR rate of 3.79% as of December 31, 2025 was used for the remaining outstanding principal under the ECA Credit Facility.
Amounts shown include contractual implicit interest obligations of the lease financing under the bareboat charters.
As of December 31, 2025, the Company had a charter-in commitment for one vessel on a lease that is accounted for as an operating lease. The full amounts due under office space leases and the lease component of the amounts due under long term time charter-ins are discounted and reflected on the Company’s consolidated balance sheet as lease liabilities with corresponding right of use asset balances.
Represents the Company’s commitments for the purchase of one ballast water treatment system and one Mewis duct system, and the purchase and installation of various performance efficiency devices for the fleet, and t he remaining commitments for the construction of four dual-fuel ready LR1s.
Carrying Value of Vessels
At December 31, 2025, 38 of the Company’s 69 owned and bareboat chartered-in vessels were pledged as collateral under certain of the Company’s debt and lease financing facilities. The following table presents information with respect to the carrying amount of the Company’s vessels by type. Instances in which the fair market values of the Company’s vessels, which are estimated by third-party vessel appraisers, are below their carrying values as of December 31, 2025, are indicated in the footnote(s) to the table. The carrying value of each of the Company’s vessels does not necessarily represent its fair market value or the amount that could be obtained if the vessel were sold. The Company’s estimates of market values for its vessels assume that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified as being in class without notations. In addition, because vessel values are highly volatile, these estimates may not be indicative of either the current or future prices that the Company could achieve if it were to sell any of the vessels. The Company would not record a loss for any of the vessels for which the fair market value is below its carrying value unless and until the Company either determines to sell the vessel for a loss or determines that the vessel is impaired as discussed below in “Critical Accounting Policies — Vessel Impairment.” The Company believes that the future undiscounted cash flows expected to be earned over the estimated remaining useful lives for those vessels that have experienced declines in market values below their carrying values would exceed such vessels’ carrying values.
Footnotes to the following table exclude those vessels with an estimated market value in excess of their carrying value.
(Dollars in thousands)
Average Vessel Age (weighted by dwt)
Number of Vessels
Carrying Value
Crude Tankers
VLCC
Suezmax
Aframax
Total Crude Tankers (1)
Product Carriers
Total Product Carriers (2)
Fleet total
As of December 31, 2025, the Crude Tankers segment includes one VLCC with carrying value of $118.4 million, which the Company believes exceeds its market value of approximately $116.7 million by $1.7 million.
As of December 31, 2025, the Product Carriers segment includes nine MRs with aggregate carrying value of $327.2 million, which the Company believes exceeds their aggregate market values of approximately $283.9 million by $43.3 million.
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RISK MANAGEMENT
Interest rate risk
The Company is exposed to market risk from changes in interest rates, which could impact its results of operations and financial condition. The Company manages this exposure to market risk through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. To manage its interest rate risk exposure associated with changes in variable interest rate payments due on its credit facilities in a cost-effective manner, the Company, from time-to-time, enters into interest rate swap, collar or cap agreements, in which it agrees to exchange various combinations of fixed and variable interest rates based on agreed upon notional amounts or to receive payments if floating interest rates rise above a specified cap rate. The Company uses such derivative financial instruments as risk management tools and not for speculative or trading purposes. In addition, derivative financial instruments are entered into with a diversified group of major financial institutions in order to manage exposure to nonperformance on such instruments by the counterparties.
See “Interest Rate Sensitivity” section below and Note 7, “Fair Value of Financial Instruments, Derivative and Fair Value Disclosures,” to the Company’s consolidated financial statements set forth in Item 8, “Financial Statements and Supplementary Data,” for additional information on the Company various interest rate derivatives.
Currency and exchange rate risk
The shipping industry’s functional currency is the U.S. dollar. All of the Company’s revenues and most of its operating costs are in U.S. dollars. The Company incurs certain operating expenses, such as some vessel and general and administrative expenses, in currencies other than the U.S. Dollar, and the foreign exchange risk associated with these operating expenses is immaterial. If foreign exchange risk becomes material in the future, the Company may seek to reduce its exposure to fluctuations in foreign exchange rates through the use of short-term currency forward contracts and through the purchase of bulk quantities of currencies at rates that management considers favorable. For contracts which qualify as cash flow hedges for accounting purposes, hedge effectiveness would be assessed based on changes in foreign exchange spot rates with the change in fair value of the effective portions being recorded in accumulated other comprehensive income/(loss).
Fuel price volatility risk
The Company has nine scrubber-fitted VLCCs and two scrubber-fitted Suezmaxes. During 2025, the average price differential between very low sulfur fuel and high sulfur fuel in Singapore and Fujairah, the most common bunkering locations for VLCCs, was approximately $83 per ton. Assuming a VLCC bunker consumption rate of 50 metric tons per day, this translated to approximately $4,150 per day per vessel in lower bunker consumption costs on our VLCCs during 2025. In addition to installing scrubbers on certain of the larger vessels in the Company’s fleet, significant consideration continues to be given to other ways of managing the risk of volatility in the price spread between high-sulfur fuel and low-sulfur fuel as well as the risk of limited supply of compliant fuel or HFO along the routes that the Company’s vessels typically travel.
Interest Rate Sensitivity
As of December 31, 2025, the Company had the ECA Credit Facility and revolving credit facilities under which borrowings bear interest at a rate based on SOFR, plus the applicable margin, as stated in the respective financing arrangements. The Company has entered into interest rate swaps agreements with major financial institutions covering for accounting purposes 100% of the ECA Credit Facility outstanding balance of $81.5 million as of December 31, 2025. The Swaps effectively convert the Company’s interest rate exposure from a three-month SOFR floating rate to a fixed rate of 2.84% through the maturity date of February 22, 2027.
The following table presents information about the Company’s financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents the principal cash flows and related weighted average interest rates by expected maturity dates of the Company’s debt obligations.
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Principal (Notional) Amount (dollars in millions) by Expected Maturity and Average Interest (Swap) Rate
Beyond
Fair Value at
(Dollars in millions)
Total
December. 31, 2025
Liabilities
Debt
Fixed rate debt
Average interest rate
Variable rate debt (1)
Average interest rate (1)
Rates are discussed in the aggregate contractual obligations section above .
CRITICAL ACCOUNTING ESTIMATES AND POLICIES
The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Company to make estimates in the application of its accounting policies based on the best assumptions, judgments, and opinions of management. Following is a discussion of the accounting policies that involve a higher degree of judgment and the methods of their application. For a description of all of the Company’s material accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to the Company’s consolidated financial statements set forth in Item 8, “Financial Statements and Supplementary Data.”
Vessel Lives and Salvage Values
The carrying value of each of the Company’s vessels represents its original cost at the time it was delivered or purchased less depreciation calculated using an estimated useful life of 25 years from the date such vessel was originally delivered from the shipyard. A vessel’s carrying value is reduced to its new cost basis (i.e., its current fair value) if a vessel impairment charge is recorded.
If the estimated useful lives assigned to the Company’s vessels prove to be shorter than previously estimated because of new regulations, an extended period of weak markets, the broad imposition of age restrictions by the Company’s customers, or other future events, it could result in higher depreciation expense and impairmentlosses in future periods related to a reduction in the useful lives of any affected vessels.
Company management estimates the steel recycle value of all of its vessels to be $300 per lightweight ton consistent with its commitment to implement and practice environmentally and socially responsible ship recycling. The Company’s assumptions used in the determination of estimated salvage value take into account current steel recycling prices, the historic pattern of annual average steel recycling rates in the Indian ship recycling market over the five years ended December 31, 2025, which ranged from $380 to $670 per lightweight ton, estimated changes in future market demand for recycled steel and estimated future demand for vessels. Steel recycling prices also fluctuate depending upon type of ship, bunkers on board, spares on board and delivery range. Market conditions that could influence the volume and pricing of vessel recycling activity in 2026 and beyond include (i) geopolitical pressure that drives a shift in the global transportation of oil from sanctioned vessels to unsanctioned vessels and makes recycling the most economical option for owners of underutilized sanctioned vessels, (ii) the combined impact of scheduled newbuild deliveries and charter rate expectations for vessels potentially facing age restrictions imposed by oil majors, (iii) costs and timing of pending special surveys, which are likely to be expensive for vessels over 15 years of age, and (iv) IMO requirements for the use of low-sulfur fuels and other carbon reduction initiatives. These factors will influence owners’ decisions to accelerate the disposal of older vessels, especially those with upcoming special surveys.
Although management believes that the assumptions used to determine the steel recycling value for its vessels are reasonable and appropriate, such assumptions are highly subjective, in part, because of the cyclicality of the nature of future demand for recycled steel.
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Vessel Impairment
The carrying values of the Company’s vessels may not represent their fair market value or the amount that could be obtained by selling the vessel at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. Historically, both charter rates and vessel values tend to be cyclical. Management evaluates the carrying amounts of vessels held and used by the Company for impairment only when it determines that it will sell a vessel or when events or changes in circumstances occur that cause management to believe that future cash flows for any individual vessel will be less than its carrying value. In such instances, an impairment charge would be recognized if the estimate of the undiscounted future cash flows expected to result from the use of the vessel and its eventual disposition is less than the vessel’s carrying amount. This assessment is made at the individual vessel level as separately identifiable cash flow information for each vessel is available.
In developing estimates of future cash flows, the Company must make assumptions about future performance, with significant assumptions being related to charter rates, operating expenses, utilization, drydocking and capital expenditure requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. Specifically, in estimating future charter rates, management takes into consideration rates currently in effect for existing time charters and estimated daily time charter equivalent rates for each vessel class for the unfixed days over the estimated remaining lives of each of the vessels. The estimated daily time charter equivalent rates used for unfixed days are based on a combination of (i) rates as forecasted by third-party analysts, and (ii) trailing historical average rates, based on monthly average rates published by a third-party maritime research service. Management determines the historical periods to utilize in its estimations based on its judgment of current, past, and ongoing shipping cycles. Recognizing that the transportation of crude oil and petroleum products is cyclical and subject to significant volatility based on factors beyond the Company’s control, management believes the use of estimates based on the combination of rates forecasted by third-party analysts and historical average rates calculated as of the reporting date to be reasonable.
Estimated outflows for operating expenses and capital expenditures and drydocking requirements are based on historical and budgeted costs and are adjusted for assumed inflation. Utilization is based on historical levels achieved and estimates of residual value for recycling are based upon the pattern of steel recycling rates used in management’s evaluation of salvage value for purposes of recording depreciation. Finally, for vessels that are being considered for disposal before the end of their respective useful lives, the Company utilizes weighted probabilities assigned to the possible outcomes for such vessels being sold or recycled before the end of their respective useful lives.
The determination of fair value is highly judgmental. In estimating the fair value of INSW’s vessels for purposes of Step 2 of the impairment tests, the Company considers the market and income approaches by using a combination of third-party appraisals and discounted cash flow models prepared by the Company. In preparing the discounted cash flow models, the Company uses a methodology consistent with the methodology discussed above in relation to the undiscounted cash flow models prepared by the Company and discounts the cash flows using its current estimate of INSW’s weighted average cost of capital.
The more significant factors that could impact management’s assumptions regarding time charter equivalent rates include (i) loss or reduction in business from significant customers, (ii) unanticipated changes in demand for transportation of crude oil and petroleum products, (iii) changes in production of or demand for oil and petroleum products, generally or in particular regions, (iv) greater than anticipated levels of tanker newbuilding orders or lower than anticipated levels of tanker recycling, and (v) changes in rules and regulations applicable to the tanker industry, including legislation adopted by international organizations such as IMO and the EU or by individual countries. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to change, possibly materially, in the future.
