OSG drops option for American Shipping Company trio as it shifts priorities

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Overseas Shipholding Group (OSG) has exercised options to extend bareboat charters with the Oslo-listed American Shipping Company (AMSC) for two vessels, while options to extend the employment of three other vessels will not be exercised as the New York-listed tanker seems to adjust its energy transmission portfolio.

Both bareboat charter extensions provide for additional one-year terms, beginning in December 2022 and ending in December 2023. With these extensions, seven vessels will continue to be chartered by AMSC – six with expiry dates aligned for end in December 2023 and one with a 2025 deadline. As for vessels whose charters have not been extended, namely MR2 product tankers Overseas New York, Overseas Los Angeles and Overseas Texas City, OSG will operate the trio for the next 12 months until the end of their current bareboat tenure in December 2022.

The Jones Act market for large conventional tankers has evolved over the past five years

Sam Norton, President and CEO of OSG, said: “We believe the market continues to support attractive business opportunities for the vessel leases we retain to complement the generation of strong and stable cash flows from our niche activities.

“Our decision not to exercise some of our options reflects a continued diversification from a relatively high concentration of Jones Act conventional tankers and ATBs to our niche businesses which have benefited from higher and more stable returns. The Jones Act market for large conventional tankers has evolved over the past five years as domestic marginal demand drivers have become more volatile in crude and refined product flows.While we are currently seeing a rebound in demand, periods Charter times available in the markets we serve have shortened and the trajectory to increased stability remains uncertain.

Norton added that the decision to re-deliver three vessels to AMSC will allow the company to redirect its resources towards participation in a wider range of opportunities in existing and emerging energy and liquid bulk markets. all types.

OSG operates a fleet of 22 US-flagged vessels comprising three tankers, two conventional ATBs, two lightweight ATBs, three shuttle tankers, ten MR tankers and two non-Jones Act MRs that participate in the US Maritime Safety Program. The company also owns and operates a Marshall Islands-flagged MR tanker, which trades internationally.

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