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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(X)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934.

For the quarterly period endedJune 30, 2005

OR

(   )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934.

For the period from __________________
to __________________

|                                                                | Commission File Number                  
|--------------------------------------------------------------- | ----------------------------------------
|                                                                | 001-14135                               
|                                                                |                                         
|                                                               
|OMI CORPORATION                                                
|                                                               
|(Exact name of registrant as specified in its charter)         
|                                                               
|                                                                |                                         
|Marshall Islands                                                | 52-2098714                              
|                                                                |                                         
|(State or other jurisdiction incorporation
    or organization) | (I.R.S. Employer Identification
    No.)
|                                                                |                                         
|One Station Place, Stamford,
    CT                             | 06902                                   
|                                                                |                                         
|(Address of principal executive
    offices)                    | (Zip Code)                              

Registrant's telephone number, including area code(203) 602-6700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that
  the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES    NO
___

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

YES
  
NO ___

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as ofAugust 9, 2005:

Common Stock, par value $0.50 per share 82,127,391
shares



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OMI CORPORATION AND SUBSIDIARIES
INDEX

|PART I: 
FINANCIAL INFORMATION                               | Page
|------------------------------------------------------------ | ----
|                                                            
|Item 1 - Financial Statements                               
|                                                             |     
|Condensed Consolidated Statements of                         |     
|Income
 (unaudited) for the three and six months             |     
|Ended
 June 30, 2005 and 2004                                | 3   
|                                                             |     
|Condensed Consolidated Balance Sheets (unaudited)            |     
|June 30, 2005 and December 31, 2004                          | 4   
|                                                             |     
|Condensed Consolidated Statement of Comprehensive            |     
|Income and Changes in Stockholders' Equity                   |     
|(unaudited) for the six months ended June 30, 2005           | 5   
|                                                             |     
|Condensed Consolidated Statements of Cash Flows (unaudited)  |     
|For the six months ended June 30, 2005 and 2004              | 6   
|                                                             |     
|Notes to Condensed Consolidated Financial                    |     
|Statements (unaudited)                                       | 7   
|                                                            
|Item 2 - Management's Discussion and Analysis of            
|Results of Operations and Financial Condition                | 17  
|                                                            
|Item 3 - Quantitative and Qualitative Disclosures about     
|Market
 Risks                                                | 45  
|                                                             |     
|Item 4 - Controls and Procedures                             | 46  
|                                                            
|PART II: 
OTHER INFORMATION                                 
|                                                             |     
|Item 1 - Legal Proceedings                                   | 48  
|                                                             |     
|Item 2 - Changes in Securities and Use of Proceeds           | 48  
|                                                             |     
|Item 3 - Defaults upon Senior Securities                     | 49  
|                                                             |     
|Item 4  Submission of Matters to a Vote of Security Holders | 49  
|                                                             |     
|Item 5 - Other Information                                   | 49  
|                                                             |     
|Item 6  Exhibits                                            | 49  
|                                                             |     
|SIGNATURES                                                   |     

2

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PART I:    FINANCIAL INFORMATION

Item 1.     Financial Statements

OMI CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

|                                             | FOR THE THREE |         | FOR THE SIX  |  
|-------------------------------------------- | ------------- | ------- | ------------ | -
|                                             | MONTHS ENDED  |         | MONTHS ENDED |  
|                                             | JUNE 30,      |         | JUNE 30,     |  
|                                             | 2005          |         | 2004         |  
|                                             |               |         |              |  
|                                             |               |         |              |  
|Revenue                                      | $             | 148,474 |              | $
|                                             |               |         |              |  
|Operating Expenses:                          |               |         |              |  
|Voyage
        expense                       |               | 33,025  |              |  
|Vessel
        expense                       |               | 23,115  |              |  
|Charter
        hire expense                 |               | 11,904  |              |  
|Depreciation
        and amortization        |               | 17,054  |              |  
|General
        and administrative           |               | 7,136   |              |  
|Gain on
        disposal of vessels          |               |        |              |  
|                                             |               |         |              |  
|Total
        operating expenses             |               | 92,234  |              |  
|                                             |               |         |              |  
|                                            
|                                            
|Operating Income                             |               | 56,240  |              |  
|                                             |               |         |              |  
|                                            
|Other (Expense) Income:                      |               |         |              |  
|Loss on
        investment                   |               |        |              |  
|Interest
        expense                     |               | (10,312 | )            |  
|Interest
        income                      |               | 185     |              |  
|Other                                        |               | 1,023   |              |  
|                                             |               |         |              |  
|Net Other
        Expense                    |               | (9,104  | )            |  
|                                             |               |         |              |  
|Net Income                                   | $             | 47,136  |              | $
|                                             |               |         |              |  
|                                            
|Basic Earnings Per Common
        Share      | $             | 0.56    |              | $
|                                            
|Diluted Earnings Per
        Common Share    | $             | 0.56    |              | $
|                                            
|Weighted Average Shares
        Outstanding: |               |         |              |  
|Basic                                        |               | 83,874  |              |  
|Diluted                                      |               | 83,938  |              |  
|                                            
|Cash Dividends Declared
        Per Share    | $             | 0.08    |              | $

See notes to condensed consolidated financial statements.

3

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OMI CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS(IN
THOUSANDS)
(UNAUDITED)

|                                                   |          |           |              |   |           | 
|-------------------------------------------------- | -------- | --------- | ------------ | - | --------- | 
|                                                   | JUNE 30, |           | DECEMBER 31, |  
|                                                   | 2005     |           | 2004         |  
|                                                   |          |           |              |  
|ASSETS                                             |          |           |              |   |           | 
|Current Assets:                                    |          |           |              |   |           | 
|Cash,
        including cash equivalents:          |          |           |              |   |           | 
|2005-$24,356;
        2004-$10,120                 | $        | 34,187    |              | $ | 41,805    | 
|                                                  
|Receivables:                                       |          |           |              |   |           | 
|Traffic
        receivables, net of allowance for  |          |           |              |   |           | 
|doubtful  accounts
        of $5,038 in 2005 and   |          |           |              |   |           | 
|$4,183
        in 2004                             |          | 43,533    |              |   | 72,474    | 
|Other                                              |          | 5,706     |              |   | 2,834     | 
|Other prepaid expenses
        and current assets  |          | 16,681    |              |   | 11,701    | 
|                                                   |          |           |              |  
|Total
        Current Assets                       |          | 100,107   |              |   | 128,814   | 
|                                                   |          |           |              |  
|                                                  
|Vessels and other property,
        at cost        |          | 1,709,772 |              |   | 1,641,029 | 
|Construction in progress                           |          | 87,516    |              |   | 116,895   | 
|                                                   |          |           |              |  
|Total vessels
        and other property           |          | 1,797,288 |              |   | 1,757,924 | 
|Less accumulated depreciation                      |          | 175,725   |              |   | 153,431   | 
|                                                   |          |           |              |  
|Vessels
        and other property-net             |          | 1,621,563 |              |   | 1,604,493 | 
|                                                   |          |           |              |  
|                                                  
|Drydock costs-net of
        amortization          |          | 3,391     |              |   | 3,587     | 
|Other assets and deferred
        charges          |          | 33,830    |              |   | 34,112    | 
|                                                   |          |           |              |  
|Total
        Assets                               | $        | 1,758,891 |              | $ | 1,771,006 | 
|                                                   |          |           |              |  
|                                                  
|LIABILITIES AND STOCKHOLDERS EQUITY               |          |           |              |   |           | 
|Current Liabilities:                               |          |           |              |   |           | 
|Current
        portion of long-term debt          | $        | 32,607    |              | $ | 33,200    | 
|Accounts
        payable                           |          | 22,928    |              |   | 13,895    | 
|Accrued
        vessel and voyage                  |          | 7,094     |              |   | 5,393     | 
|Accrued
        general and administrative         |          | 5,674     |              |   | 8,085     | 
|Other accrued
        liabilities                  |          | 2,989     |              |   | 2,399     | 
|Deferred
        charter hire revenue              |          | 9,519     |              |   | 7,597     | 
|Charter
        hire payable                       |          | 4,537     |              |   | 7,808     | 
|Other current
        liabilities                  |          | 11,722    |              |   | 11,610    | 
|                                                   |          |           |              |  
|Total
        Current Liabilities                  |          | 97,070    |              |   | 89,987    | 
|                                                  
|Long-term debt                                     |          | 841,766   |              |   | 907,236   | 
|Other liabilities                                  |          | 6,000     |              |   | 6,381     | 
|                                                  
|Stockholders equity                               |          | 814,055   |              |   | 767,402   | 
|                                                   |          |           |              |  
|Total
        Liabilities and Stockholders Equity | $        | 1,758,891 |              | $ | 1,771,006 | 
|                                                   |          |           |              |  
|                                                   |          |           |              |   |           | 

4

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OMICORPORATIONANDSUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTOFCOMPREHENSIVE INCOMEANDCHANGESINSTOCKHOLDERS EQUITYFOR THE SIXMONTHS ENDEDJUNE 30, 2005
(INTHOUSANDS) (UNAUDITED)



|                                                  |        |   |  |        |        |         |         |          |          |       |            |               | Unearned      |         | Accumulated   |        |               |   |   |         |  
|------------------------------------------------- | ------ | - |  | ------ | ------ | ------- | ------- | -------- | -------- | ----- | ---------- | ------------- | ------------- | ------- | ------------- | ------ | ------------- | - | - | ------- | -
|                                                  |        |   |  |        |        |         |         |          |          |       |            |               | Compensation  |         | Other         |        | Total         |   |   |        
|                                                  |        |   |  |        |        |         | Capital |          | Retained |       | Restricted |               | Comprehensive |         | Stockholders |        | Comprehensive
|                                                  | Shares |   |  | Amount |        | Surplus |         | Earnings |          | Stock |            | (Loss) Income |               | Equity  |               | Income
|                                                  |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |       
|Balance at January 1,
        2005                | 85,630 |   |  | $      | 42,815 |         | $       | 340,147  |          | $     | 391,476    |               | $             | (6,851  | )             | $      | (185          | ) | $ | 767,402 |  
|                                                 
|Comprehensive income:                             |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |        |               |   |   |         |  
|Net income                                        |        |   |  |        |        |         |         |          |          |       | 122,917    |               |               |         |               |        |               |   |   | 122,917 |  
|Other comprehensive
        income:               |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |        |               |   |   |         |  
|Net
        unrealized gain on        derivatives |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |        | 420           |   |   | 420     |  
|                                                  |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |        |               |   |   |         |  
|Total comprehensive
        income                |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |        |               |   |   |         |  
|                                                  |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |        |               |   |   |         |  
|Dividends on common
        stock                 |        |   |  |        |        |         |         |          |          |       | (13,472    | )             |               |         |               |        |               |   |   | (13,472 | )
|Exercise of stock options                         | 99     |   |  |        | 49     |         |         | 482      |          |       |            |               |               |         |               |        |               |   |   | 531     |  
|Purchase and retirement of                        |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |        |               |   |   |         |  
|common stock for treasury                         | (3,512 | ) |  |        | (1,756 | )       |         | (63,454  | )        |       |            |               |               |         |               |        |               |   |   | (65,210 | )
|Issuance of restricted
        stock awards       | 602    |   |  |        | 301    |         |         | 11,144   |          |       |            |               |               | (11,445 | )             |        |               |   |   | -       |  
|Amortization
    of restricted stock awards       |        |   |  |        |        |         |         |          |          |       |            |               |               | 1,467   |               |        |               |   |   | 1,467   |  
|                                                  |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |       
|Balance at June 30,
        2005                  | 82,819 |   |  | $      | 41,409 |         | $       | 288,319  |          | $     | 500,921    |               | $             | (16,829 | )             | $      | 235           |   | $ | 814,055 |  
|                                                  |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |       
|                                                  |        |   |  |        |        |         |         |          |          |       |            |               |               |         |               |        |               |   |   |         |  



See notes to condensed consolidated financial statements.

5

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OMI CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 (IN THOUSANDS)
 (UNAUDITED)

|                                                             | FOR THE SIX  |         
|------------------------------------------------------------ | ------------ | --------
|                                                             | MONTHS ENDED |         
|                                                             | JUNE 30,     |         
|                                                             | 2005         |         
|                                                             |              |         
|CASH FLOWS PROVIDED
          BY OPERATING ACTIVITIES:       |              |         
|Net income                                                   | $            | 122,917 
|Adjustments
        to reconcile net income to net cash      |              |         
|provided
        by operating activities:                    |              |         
|Depreciation
        and amortization of vessels and         |              |         
|other property                                               |              | 33,599  
|Gain
        on disposal of assets                           |              | (2,874  
|Loss
        on investment                                   |              |        
|Amortization
        of deferred gain on sale of vessels     |              | (779    
|Amortization
        of debt issue costs                     |              | 1,773   
|Amortization
        of restricted stock awards              |              | 1,467   
|Other                                                        |              | (994    
|Changes
        in assets and liabilities:                   |              |         
|Decrease
        in receivables and other current assets     |              | 21,755  
|Increase
        in accounts payable and accrued liabilities |              | 6,746   
|(Increase)
        decrease in other assets and deferred     |              |         
|charges                                                      |              | (876    
|Decrease
        in other liabilities                        |              | (10     
|Other                                                        |              | (148    
|                                                             |              |         
|Net cash provided by
        operating activities            |              | 182,576 
|                                                             |              |         
|                                                            
|CASH FLOWS USED BY
          INVESTING ACTIVITIES:           |              |         
|Additions
        to vessels and other property              |              | (82,689 
|Proceeds
        from disposition of vessels                 |              | 36,752  
|Payments
        for drydocking                              |              | (1,362  
|Payments
        for investments                             |              |        
|Escrow
        of funds                                      |              | 499     
|                                                             |              |         
|Net cash used by investing
        activities                |              | (46,800 
|                                                             |              |         
|                                                            
|CASH FLOWS USED BY
          FINANCING ACTIVITIES:           |              |         
|Proceeds
        from issuance of debt                       |              | 77,956  
|Payments
        on debt                                     |              | (142,382
|Payments
        for debt issue costs                        |              | (1,451  
|Proceeds
        from issuance of common stock               |              | 531     
|Payments
        of dividends                                |              | (12,838 
|Payments
        for the purchase of treasury stock          |              | (65,210 
|                                                             |              |         
|Net cash (used) provided
        by financing activities     |              | (143,394
|                                                             |              |         
|                                                            
|Net (decrease) increase
        in cash and cash equivalents |              | (7,618  
|Cash and cash equivalents
        at beginning of year       |              | 41,805  
|                                                             |              |         
|Cash and cash equivalents
        at end of period           | $            | 34,187  
|                                                             |              |         

See notes to condensed consolidated financial statements.

6

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OMI CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

OMI Corporation (OMI or
    the Company) is a leading seaborne transporter of crude oil and
    refined petroleum products operating in the international shipping markets.
    The  unaudited condensed consolidated interim financial statements of OMI
    are prepared in conformity with accounting principles generally accepted
    in the United States of America ("GAAP") and the Securities and Exchange
    Commissions instructions to
  Form 10-Q. In the opinion of management, all adjustments (consisting only of
    normal recurring adjustments) necessary for a fair presentation of the financial
    position and results of operations for the periods presented have been included.
    The  condensed consolidated financial statements should be read in conjunction
    with the consolidated financial statements and notes thereto contained in
    the Company's Annual Report on Form 10-K for the fiscal year ended December
    31, 2004. The results of  operations for the three and six months ended June
    30, 2005, are not necessarily indicative of the results for the entire fiscal
    year ending December 31, 2005.

The condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have
  been eliminated in consolidation.

ReclassificationsCertain reclassifications have been made to the condensed financial statements for
  the three and six months ended June 30, 2004 Revenues and Voyage expense to conform to the three and six months ended June 30, 2005 Revenues and Voyage expense. Revenues comprise voyage revenue, time charter revenue and other revenue. Revenues and
  voyage expenses have each been increased by $1,409,000 and $2,787,000 for the three and six months ended June 30, 2004, respectively, to reflect broker commissions paid by the Company as a component of voyage expenses rather than as a
  reduction of voyage revenues. This reclassification had no impact on operating income or net income.

Application of Newly Issued Accounting StandardsIn December 2004, the Financial Accounting
  Standards Board issued Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, (SFAS 123(R)). This Statement requires companies to expense the estimated fair value of stock options and similar equity
  instruments issued to employees. Currently, companies are required to calculate the estimated fair value of these share-based payments and can elect to either include the estimated cost in earnings or disclose the pro forma effect in the footnotes
  to their financial statements. The fair value concepts were not changed significantly in FAS 123(R); however, in adopting this Standard, companies must choose among alternative valuation models and amortization assumptions. We do not expect the
  adoption of SFAS 123(R) to have a material adverse impact on our net income and earnings per share.

On April 14, 2005
    the U.S. Securities and Exchange Commission (the SEC) announced
    a deferral of the effective date of FAS 123(R) for calendar year companies
    until the beginning of  2006 and this pronouncement will apply to all awards
    granted and modified after the adoption date.

7

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (continued)

Stock-Based CompensationThe Company currently sponsors stock option plans and restricted stock award plans.

During 2003, OMI adopted the fair value recognition provisions of SFAS 123, Accounting for Stock Based Compensation, as amended by SFAS 148, Accounting for Stock Based
  Compensation-Transition and Disclosure to account prospectively for stock options issued after December 31, 2002. In accordance with the modified prospective method of adoption, results of prior years have not been restated. There were no
  options granted in the three and six months ended June 30, 2005 or 2004. Currently, all of the stock options previously issued have vested. No stock-based employee compensation expense for stock options was reflected in net income for the three or
  six months ended June 30, 2005 and 2004.

Note 2  Credit Facilities and Loan Agreements

As of June 30, 2005 the Companys debt and credit arrangements consisted of the following (in thousands):

|Term loans under bank
        mortgage agreements at a margin plus variable      |   |         | 
|-------------------------------------------------------------------------------- | - | ------- | 
|rates above the London
        Interbank Offering Rate (LIBOR)(1),
        (2) | $ | 394,873 | 
|Reducing revolving facilities
        under bank mortgage agreements at a margin |   |         | 
|plus variable rates above
    LIBOR(1), (2)                                      |   | 55,000  | 
|7.625% Unsecured Senior
        Notes due December 2013                          |   | 200,000 | 
|2.875% Unsecured Convertible
        Senior Notes due December 2024              |   | 224,500 | 
|                                                                                 |   |         | 
|Total                                                                            |   | 874,373 | 
|                                                                                
|Less current portion
        of long-term debt-                                  |   |         | 
|Scheduled
        payments of debt                                               |   | 32,607  | 
|                                                                                 |   |         | 
|Long-term
        debt                                                           | $ | 841,766 | 
|                                                                                 |   |         | 

(1)Rates for the six months ended June 30, 2005 ranged from 2.77 percent to 4.875 percent (including margins). Rates for the six months ended June 30, 2004 ranged from
1.97 percent to 3.63 percent (including margins).

(2)As of June 30, 2005, OMI had various interest rate swaps that fix notional amount aggregating $112,139,000 (not including $62,400,000 that begins in February
  2006) of variable rate debt ranging from 2.90 percent to 4.86 percent (excluding margins) with maturity dates ranging from October 2005 to July 2009.

Reducing Revolving Credit Facilities

OMI Corporation has
    two reducing revolving credit facilities collateralized by vessels. On May
    11, 2005, we amended and restated our $348,000,000 facility with an original
    due date of July 27, 2006 and an available balance of $154,394,000 with
    a ten year $320,000,000 collateralized reducing revolving credit facility
    (the "$320
    Facility"). Additionally, we repaid a $24,000,000 term loan (see Term
    Loans below) on a vessel and included two new recently delivered product
    carriers as collateral under the modified $320 Facility. Borrowings under
    the $320 Facility bear interest at
  LIBOR plus a margin of 0.675% . The scheduled semi-annual reductions of $10,000,000
  of the available amount under the $320 Facility are further reduced upon
  the disposal of a vessel pledged as collateral. As of June 30, 2005, the undrawn
   amount under the $320 Facility was $280,000,000 and outstanding borrowings
   were $40,000,000.

8

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Note 2  Credit Facilities and Loan Agreements (continued)

During the six months ended June 30, 2005, the Company made unscheduled payments aggregating $80,000,000, in addition to scheduled payments, on OMIs $375 Facility. As of June 30,
  2005, the undrawn amount under the $375 Facility was $348,750,000 and outstanding borrowings were $15,000,000.

Term Loans

During the second quarter of 2005, seven of our term loans were amended to reduce the margin above LIBOR to 0.675%, modify certain covenants (consistent with loans entered into in 2005) and we
  extended two term loans by four years each to 2013 and 2015.

During April 2005, we repaid a term loan with an original maturity date of April 2009, which had $22,350,000 outstanding.

2.875% Convertible Notes Due 2024

During the second quarter of 2005, the Company repurchased
    an aggregate of $25,500,000 of its 2.875% Convertible Notes issued in December 2004. We recorded a gain of $803,000
    on the extinguishment of debt, which is included in Other (under Other (Expense)
    Income) on the Condensed Consolidated Statements of Income for the three
    and six months ended June 30, 2005.

Restrictive Covenants

All of our loan agreements contain restrictive covenants as to cash, net worth, maintenance of specified financial ratios, collateral values and other non-financial restrictions. As of June 30,
  2005, we were in compliance with all covenants.

Note 3  Financial Instruments

All derivatives are recognized on the Companys balance sheet at their fair values. For accounting hedges, on the date the derivative contract is entered into the Company designates the
  derivative as (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge) or (2) a hedge of a forecasted transaction (cash flow hedge). Additionally, the Company
  entered into forward freight agreements (FFAs). We use FFAs as economic hedges to the Company, but have not designated FFAs as hedges for accounting purposes, and, as such, changes in the fair value of FFAs are
  recorded to the Companys statement of income each reporting period. FFAs involve contracts to provide a fixed number of theoretical voyages at fixed rates. The FFA contracts settle based on the monthly Baltic Tanker Index
  (BITR). The BITR averages rates received in the spot market by cargo type, crude oil and refined petroleum products, by trade route. The duration of a contract can be one month, quarterly or up to two years (currently our open positions
  extend to December 2005) with open positions settling on a monthly basis. We have taken short positions in FFA contracts, which reduce a portion of the Companys exposure to the spot charter market by creating synthetic time charters. A short
  transaction would hedge an existing long transaction. We have also from time to time taken long positions, which have increased our exposure to the spot market.

9

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Note 3  Financial Instruments (continued)

Interest-Rate
Swaps

As of June 30, 2005, the Company had interest rate swaps to effectively convert a portion of its debt from a floating to a fixed-rate basis. The swaps are designated and qualify as cash flow
  hedges. These swap contracts were effective hedges and therefore no ineffectiveness was recorded in the Condensed Consolidated Statements of Income.

As of June 30, 2005, we had various interest rate swaps aggregating $174,539,000 (which includes a notional amount of $62,400,000 for an interest rate swap that commences in February
  2006) on various debt tranches within a range of 2.9% to 4.86% expiring from October 2005 to August 2012. The Company pays fixed-rate interest amounts and receives floating-rate interest amounts based on three month LIBOR settings (for a term equal
  to the swaps reset periods). As of June 30, 2005, the Company has recorded an asset of $1,993,000 and a liability of $1,758,000 related to the fair market value of these hedges and a corresponding credit of $235,000 to Other
  comprehensive income.

Forward Freight
  Agreements

At June 30, 2005,
    the FFAs had an aggregate notional value of $8,255,000, which is
    an aggregate of both long and short positions that extend to December 2005.
    The notional amount is  based on a computation of the quantity of cargo (or
    freight) the contract specifies, the contract rate (based on a certain trade
    route) and a flat rate determined by the market on an annual basis. Each
    contract is marked to market for the specified  cargo and trade route. The
    fair value of forward freight agreements is the estimated amount that the
    Company would receive or pay to terminate the agreements at the reporting
    date. As of June 30, 2005, the Company has recorded an asset of $688,000
    and a liability of $548,000 related to the fair market value of these
    economic hedges. The Company has recorded the aggregate net realized and
    unrealized gain of
$220,000 and $608,000, for the three and six months ended June 30, 2005,
respectively, which is classified as Other (under Other (Expense) Income) on
the Condensed Consolidated Statements of Income for the three and six months
ended June 30,  2005. We had no FFAs during the three and six months ended
June 30, 2004.

From July 1, 2005 to August 5, 2005, the Company committed to additional forward freight agreements with an aggregate notional amount of $6,125,000.  These forward freight agreements expire
  by December 2005.

The Company is exposed to credit loss in the event of non-performance by the counter parties to the interest rate swap agreements and forward freight agreements; however, the Company does not
  anticipate non-performance by any of the counter parties.

Note 4  Earnings Per Common Share

The computation
    of basic earnings per share is based on the weighted average number of common
    shares outstanding during the period. The computation of diluted earnings
    per share assumes the foregoing and the exercise of stock options using the
    treasury stock method and the conversion of the 2.875% Unsecured Convertible
    Senior Notes due 2024 (2.875 Convertible Notes) to the extent
dilutive.

10

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Note 4  Earnings Per Common Share (continued)

The components of the denominator for the calculation of basic and diluted earnings per share and the results of such calculations are as follows:

|                                                   | For the Three
    Months |        | For the Six Months
|-------------------------------------------------- | ------------------------ | ------ | ------------------
|                                                   | Ended June 30,           |        | Ended June 30,    
|                                                   | 2005                     |        | 2004              
|                                                   |                          |        |                   
|(in thousands, except per share
    amounts)       |                          |        |                   
|Basic earnings per share:                          |                          |        |                   
|Weighted
        average common shares outstanding |                          | 83,874 |                   
|                                                   |                          |        |                   
|                                                  
|Diluted earnings per
        share:                |                          |        |                   
|Weighted average common
        shares outstanding |                          | 83,874 |                   
|Options                                            |                          | 64     |                   
|                                                   |                          |        |                   
|Weighted
        average common shares-diluted     |                          | 83,938 |                   
|                                                   |                          |        |                   
|                                                  
|Basic earnings per common
        share            | $                        | 0.56   |                   
|                                                   |                          |        |                   
|                                                  
|Diluted earnings per
        common share          | $                        | 0.56   |                   
|                                                   |                          |        |                   

For the six months ended June 30, 2005, the 2.875% Convertible Notes were not dilutive as the average price of OMIs stock was less than the face amount of the notes. (Note: Each holder of a convertible note will
receive either common stock or cash for the conversion value in excess of such principal amount. The initial conversion ratio is 32.5355 shares of our common stock per $1,000 principal amount of notes, which is equivalent to an initial
conversion price of approximately $30.74 per share.)

Note 5 - Equity Transactions

Acquisition
and Retirement of Treasury Stock

On December 14, 2004, the Board of Directors authorized the Company to repurchase from time to time up to 4,250,000 shares of common stock.  As of June 30, 2005, 737,500 shares remained under
  this authority.

During the second
    quarter of 2005, OMI purchased 3,200,900 shares of its common stock at an
    average price of $18.61 per share, aggregating $59,557,000. During
    the first quarter of 2005,  OMI purchased 311,600 shares of its common stock
    at an average price of $18.14 per share, aggregating $5,653,000.
  An additional 294,800 shares and 396,600 shares were purchased in July and
    August 2005 at an average price of $18.02 per
  share and $17.57 per share, respectively, aggregating $12,282,000.
  All shares were retired upon purchase.

11

---



Note 5 - Equity Transactions (continued)

Restricted Stock

The Company has granted restricted stock to certain of its employees, executive officers and directors under the 2001 Restricted Stock Plan and the 2003 Stock Incentive Plan. The following
table illustrates restricted stock awarded under these plans, restricted stock forfeited, vested, outstanding as of June 30, 2005, and the fair value at the grant date.



|           |  | Restricted |  |           |          |        |  | Restricted  |   | Fair         
|---------- |  | ---------- |  | --------- | -------- | ------ |  | ----------- | - | -------------
|           |  | Stock      |  |           |          |        |  | Stock       |   | Value at     
|Month      |  | Awarded    |  | Forfeited |          | Vested |  | Outstanding |   | Grant Date(2)
|           |  |            |  |           |          |        |  |             |   |              
|July 2001  |  | 900,000    |  |           | (75,000) | (1)    |  | (240,000    | ) |              
|April 2002 |  | 20,000     |  |           |          |        |  | (5,000      | ) |              
|Sept. 2003 |  | 498,314    |  |           | (35,391) | (1)    |  | (5,287      | ) |              
|May 2004   |  | 21,000     |  |           |          |        |  |             |   |              
|June 2004  |  | 230,423    |  |           |          |        |  | (5,287      | ) |              
|Dec. 2004  |  | 36,500     |  |           |          |        |  |             |   |              
|Feb. 2005  |  | 30,000     |  |           | (20,000  | )      |  |             |   |              
|May 2005   |  | 592,847    |  |           |          |        |  |             |   | 592,847      
|           |  |            |  |           |          |        |  |             |   |              
|           |  | 2,329,084  |  |           | (130,391 | )      |  | (255,574    | ) |              
|           |  |            |  |           |          |        |  |             |   |              
|           |  |            |  |           |          |        |  |             |   |              

| | (1) | These shares were forfeited in 2004.                    
| | --- | --------------------------------------------------------
|
| | (2) | Months with more than one Grant Date have been averaged.
|

The Company is amortizing
unearned compensation over the applicable vesting periods. During the three
months ended June 30, 2005 and 2004, we recognized $891,000 and $513,000,
respectively, and during the six months ended June 30, 2005 and 2004, we recognized $1,467,000
and $994,000,
 respectively, of compensation expense related to restricted stock.

Cash dividends

On May 19, 2005,
    the Board of Directors of OMI declared a dividend on its common stock or $0.08
    per share to shareholders based on the number of common shares outstanding
    of 82,850,000 to  holders of record on June 23, 2005. As of June 30, 2005,
    $6,626,000 was accrued for dividends payable and included in the Condensed
    Consolidated Balance Sheets which was paid on July 13, 2005. The first quarter
    cash dividend of $6,846,000 was paid on April
    12, 2005.

Note 6 - Supplemental Cash Flow Information

During the six months ended June 30, 2005 and 2004, cash paid for interest, net of $1,940,000 and $878,000 capitalized, respectively, totaled approximately $18,152,000 and
$13,571,000, respectively.

Note 7  Acquisitions/Vessel Deliveries

In January, March and May 2005, OMI took delivery of three 2005 built vessels, two handymax product carriers and one handysize product carrier, the LAUREN, the BRAZOS and the FOX, respectively.
  The LAUREN and the BRAZOS began short-term time charters upon delivery and now operate in the spot market, and the FOX began a five year time charter. At June 30, 2005, the capitalized costs (including capitalized interest) for the LAUREN, the
  BRAZOS and the FOX were approximately $40,194,000, $40,294,000 and $29,786,000, respectively.

12

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Note 7  Acquisitions/Vessel Deliveries (continued)

The final payments on the 2005 deliveries were paid with cash from operations and financing under a term loan and the $320 Facility (see Note 2).

Note 8  Disposals of Vessels

In January 2005,
    we sold our last two non-double hull handysize crude oil carriers built in
    1993 (TANDJUNG AYU and BANDAR AYU) for an aggregate sales price of $36,752,000,
    net of  commissions. The sale of the vessels resulted in a gain of approximately $2,874,000,
  which was recorded to the Consolidated Statements of Income in the first quarter
    of 2005.

Note 9 - Financial Information Relating to Segments

The Company organizes its business principally into two operating segments, the Crude Oil Fleet and the Product Carrier Fleet. These segments and their respective operations are as follows:

Crude Oil Fleet - includes vessels that normally
    carry crude oil and dirty products. The current fleet includes
    one size vessel, Suezmax tanker. The 2005 results include the handysize vessels
    sold in January. The fleet in 2004 also included handysize, ULCC and Panamax
    size vessels, which were sold in 2004 and 2005.

Product Carrier Fleet - includes vessels that normally carry refined petroleum products such as gasoline and aviation fuel.  This fleet includes three sizes of vessels, Panamax, handymax and handysize vessels.

The following is a summary by major operating segments for the three and six months ended June 30, 2005 and June 30, 2004:



|                                              | For the Three
    Months |         |   | For the Six Months |  
|--------------------------------------------- | ------------------------ | ------- | - | ------------------ | -
|                                              | Ended June 30,           |         |   | Ended June 30,     |  
|                                              | 2005                     |         |   | 2004               |  
|                                              |                          |         |   |                    |  
|(in thousands)                                |                          |         |   |                    |  
|Revenue:                                      |                          |         |   |                    |  
|Crude Oil
        Fleet                       | $                        | 88,211  |   |                    | $
|Product
        Carrier Fleet                 |                          | 60,033  |   |                    |  
|                                              |                          |         |   |                    |  
|Subtotal                                      |                          | 148,244 |   |                    |  
|Other                                         |                          | 230     |   |                    |  
|                                              |                          |         |   |                    |  
|Total                                         | $                        | 148,474 |   |                    | $
|                                              |                          |         |   |                    |  
|Time Charter Equivalent
          Revenue:(1) |                          |         |   |                    |  
|Crude Oil
        Fleet                       | $                        | 64,260  |   |                    | $
|Product
        Carrier Fleet                 |                          | 50,959  |   |                    |  
|                                              |                          |         |   |                    |  
|Total                                         | $                        | 115,219 |   |                    | $
|                                              |                          |         |   |                    |  
|Net Income:                                   |                          |         |   |                    |  
|Crude Oil
        Fleet(2)                    | $                        | 31,816  |   |                    | $
|Product
        Carrier Fleet                 |                          | 24,561  |   |                    |  
|                                              |                          |         |   |                    |  
|                                              |                          | 56,377  |   |                    |  
|General and administrative
        expense    |                          |         |   |                    |  
|Not allocated
        to vessels              |                          | (5,036  | ) |                    |  
|Other(3)                                      |                          | (4,205  | ) |                    |  
|                                              |                          |         |   |                    |  
|Total                                         | $                        | 47,136  |   |                    | $
|                                              |                          |         |   |                    |  

|    |                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company uses time charter equivalent (TCE) revenue, which is (i) voyage revenue less voyage expenses and (ii) time charter (TC) revenue, as a measure of analyzing fluctuations in voyage
revenue between financial periods and as a method of equating revenue generated from a voyage charter to time charter.
|   

13

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Note 9 - Financial Information Relating to Segments (continued)

The following is a reconciliation of TCE revenue for the three months ended June 30, 2005:

| |                        | Crude Oil |        | Product  |   |             
| | ---------------------- | --------- | ------ | -------- | - | ------------
| |                        | Fleet     |        | Carriers |   | Consolidated
| | (in thousands)         |           |        |          |   |             
| | Voyage and TC Revenues | $         | 88,211 |          | $ | 60,033      
| | Voyage Expenses        |           | 23,951 |          |   | 9,074       
| |                        |           |        |          |   |             
| | TCE Revenue            | $         | 64,260 |          | $ | 50,959      
| |                        |           |        |          |   |             

The following is a reconciliation of TCE revenue for the three months ended June 30, 2004:

| |                        | Crude Oil |        | Product  |   |             
| | ---------------------- | --------- | ------ | -------- | - | ------------
| |                        | Fleet     |        | Carriers |   | Consolidated
| | (in thousands)         |           |        |          |   |             
| | Voyage and TC Revenues | $         | 68,792 |          | $ | 30,363      
| | Voyage Expenses        |           | 14,873 |          |   | 898         
| |                        |           |        |          |   |             
| | TCE Revenue            | $         | 53,919 |          | $ | 29,465      
| |                        |           |        |          |   |             

The following is a reconciliation of TCE revenue for the six months ended June 30, 2005:

| |                        | Crude Oil |         | Product  |   |             
| | ---------------------- | --------- | ------- | -------- | - | ------------
| |                        | Fleet     |         | Carriers |   | Consolidated
| | (in thousands)         |           |         |          |   |             
| | Voyage and TC Revenues | $         | 203,969 |          | $ | 115,164     
| | Voyage Expenses        |           | 46,485  |          |   | 16,593      
| |                        |           |         |          |   |             
| | TCE Revenue            | $         | 157,484 |          | $ | 98,571      
| |                        |           |         |          |   |             

The following is a reconciliation of TCE revenue for the six months ended June 30, 2004:

| |                        | Crude Oil |         | Product  |   |             
| | ---------------------- | --------- | ------- | -------- | - | ------------
| |                        | Fleet     |         | Carriers |   | Consolidated
| | (in thousands)         |           |         |          |   |             
| | Voyage and TC Revenues | $         | 167,091 |          | $ | 59,845      
| | Voyage Expenses        |           | 30,874  |          |   | 1,611       
| |                        |           |         |          |   |             
| | TCE Revenue            | $         | 136,217 |          | $ | 58,234      
| |                        |           |         |          |   |             

|(2) | Net income includes Gain on disposal of vessels of $2,874,000 for the six months ended June 30, 2005 and $360,000 for the six months ended June 30, 2004.                                                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) | Net income includes the gain on extinguishment of notes of $803,000 for the three and six months ended June 30, 2005 and the realized and unrealized gains on freight forward agreements aggregating $220,000 and
$608,000 for the three and six months ended June 30, 2005, respectively. Net income includes loss on investment of $3,098,000 resulted from expenses related to a terminated acquisition (Stelmar) for the three and six months ended June 30,
2004.

14

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Note 10 - Other Commitments and Contingencies

Contracts Relating
to Vessels

At June 30, 2005, OMI had commitments to construct
    seven vessels; five handymax and two handysize product carriers with contract
    costs aggregating $248,240,000. As of June 30, 2005, payments of $83,851,000 had been
    made to the shipyard, $15,769,000 of which was paid during the six months ended June 30, 2005. Bank financing or operating cash will provide the additional amounts to be paid.  OMI paid an aggregate of $38,952,000
    upon the delivery of two vessels in July 2005. The remaining five vessels
    will be delivered in 2006. One vessel delivered in July began a five year
    time charter.

As of June 30, 2005, future construction and delivery payments aggregated approximately $164,389,000, which includes the payments made in July 2005 for the delivery of two vessels mentioned above, (before financing) as
follows:



| | Year                     |  | Payments       |        
| | ------------------------ |  | -------------- | -------
| |                          |  |                |        
| |                          |  | (in thousands) |        
| |                          |  |                |        
| | 2005                     |  | $              | 59,974 
| | 2006                     |  |                | 104,415
| |                          |  |                |        
| | Total Remaining Payments |  | $              | 164,389
| |                          |  |                |        

Operating
Leases

In February 2005, OMI agreed to time charter-in for seven years two new Suezmax vessels for the Gemini pool. One vessel was delivered in June 2005 and the other is scheduled for delivery in September 2005. OMI has options
to extend the term of the time charters and/or to acquire the vessels.

During April 2005, we signed a new lease for existing and additional office space at our corporate office in Stamford, Connecticut. The lease terms were extended from December 2006 to February
  2017, which increased our commitment from August 2005 to February 2017 by $14,432,000.

Long-Term Time
Charter Revenue

During February 2005, the time charter contracts for AMAZON and SAN JACINTO (handymax product carriers) expired; however, new three year time charters with different charterers were secured at
  higher rates beginning in April and May of 2005.

During February 2005, the time charter contract for the RHONE (a handysize product carrier) was extended for two years at a higher fixed rate plus profit sharing. The new time charter began in
  May 2005.

During March 2005, we signed a new three year time charter contract for the GUADALUPE (a handymax product carrier) at a higher rate than its previous contract, which expired in January 2005.
  The new time charter began in April 2005.

During April 2005, the time charter contracts for the MADISON and TRINITY (two handysize product carriers) were revised. The time charters now expire in April 2010 and are at a higher
  rate.

15

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Note 10 - Other Commitments and Contingencies (continued)

During April 2005, we signed seven year time charter contracts with profit sharing arrangements for SABINE and SACRAMENTO (two Suezmax tankers). The contracts commenced in May 2005.

During May 2005, the time charter contracts for the OHIO and ORONTES (handysize product carriers) were revised. The time charter contracts now expire in June 2010 and are at a higher rate.

During May 2005, we signed a three year time charter contract commencing in September 2005 for the SEINE (a handysize product carrier). The new time charter is at a higher rate than the current
  time charter that expired in July 2005.

During May 2005, we signed three year time charter contracts for the MOSELLE and ROSETTA, both handymax product carriers. The new contracts begin when the current time charters expire in
  February and March 2006, respectively, and are at a higher rate.

Minimum future revenues (not including profit sharing) to be received for time charters subsequent to June 30, 2005 are as follows:  $67,466,000 in the remaining two quarters of 2005,
$135,635,000 in 2006, $125,340,000 in 2007, $95,100,000 in 2008, $60,661,000 in 2009 and $62,397,000 thereafter.

Athenian Arbitration

The Company terminated an agreement to acquire one
    of the Suezmax vessels it was to acquire in August 2004 from Athenian Sea
    Carriers Ltd., as delivery was not tendered in accordance with the requirements
    of the agreement. The seller disputes the matter, which is now in arbitration.
    If the Company is correct, it will be entitled to certain additional expenses
    it incurred and the increase in value, if any, of the vessel over the contract
    price. If the Company loses, it would most likely lose the amount of its
    deposit, approximately $6.4 million. This amount is included in the Condensed
    Consolidated Balance Sheets as a component of Other assets and deferred charges.

Other

OMI and certain subsidiaries are defendants in various actions arising from shipping operations. Such actions are covered by insurance or, in the opinion of management, the ultimate resolution
    of these matters will not have a material adverse effect on the financial condition, results of operations or cash flows of the Company. Management accrues an estimate of expense for any matters that are considered probable of occurring based on the
    facts and circumstances.

16

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Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following presentation of managements discussion and analysis of OMI Corporations (OMI or the Company)
    financial condition and results of operations should be read in conjunction
    with the condensed consolidated financial statements and accompanying notes
    appearing elsewhere in this Form 10-Q.

Overview

We provide seaborne
    transportation services for crude oil and petroleum products in the international
    shipping markets. Our customers include major independent and state-owned
    oil companies, major oil traders, government entities and various other entities. We
    own or charter-in a fleet of 46 vessels (see our Fleet section). We are focused
    on maintaining a high quality fleet that is concentrated primarily in two
    vessel types, Suezmax tankers, which generally carry crude oil (we refer
    to these as our crude oil fleet or Suezmax fleet)
    from areas of oil production to refinery areas, and product carriers, which
    generally carry refined petroleum products (we refer to as our product
    carrier fleet), such as gasoline and aviation fuel, from refineries
to distribution areas.

Financial Summary

OMI is a growing
    company, with strategies to maintain shareholder value and a high quality
    fleet of vessels. The delivery of six newbuildings in 2005, one of which
    is chartered-in, is reflective of our growth strategy. We market certain
    of our vessels to maximize profit in strong markets and at the same time
    receive contracted revenue from other vessels. As of June 30, 2005, the average
    age of our vessels was 3.4
  (1)years (including vessels delivered in July). We will
  take delivery of five newbuildings currently on order in 2006 and charter-in
  one more 2005 built Suezmax  vessel in September 2005.

(Note
  (1): All averages referring to vessel age
  are weighted averages based on deadweight tons (dwt). Dwt, expressed
  in metric tons, each  of which is equivalent to 1000 kilograms, refers to the
  total weight a vessel can carry when loaded to a particular load line.)

OMIs net income of $47.1 million for the three months and $122.9 million for the six months ended June 30, 2005 was higher than the net income reported in the comparable periods
  since the Companys inception in 1998. Revenue of $148.5 million for the three months and $319.9 million for the six months ended June 30, 2005 increased 49 percent and 41 percent, respectively, compared to the same periods in 2004.
  Average spot rates earned by our Suezmax fleet in the 2005 periods were comparable to the average rates earned in the same 2004 periods.

Our Company benefited from the continued strength
    of the tanker market (see Market Overview) in the first half of 2005. We
    had a 50% larger Suezmax fleet in the first half of 2005 compared to last
    years first half, which also contributed to increased earnings for
    the fleet. We have also benefited from product carriers that were either
    delivered or came off time charter in 2004 and operated in the spot market
    during a period of strong rates. During 2005, we expect to have approximately
    32 percent more

17

---



operating days for the Suezmax fleet and 27 percent more operating days for the product carrier fleet.

In an effort to maintain our high quality vessels and a good safety record, we have implemented additional initiatives in 2005 that have increased operating costs (see Breakdown by Fleet
  section). We believe that the investment in high quality people operating the ships, appropriate stores and supplies to maintain the ships, training, environmental and other vessel related initiatives is necessary in order to be a high quality
  operator. We also believe that our customers prefer OMI because we are a quality operator. We were able to continue long-term relationships through time charter contracts renewed with existing customers, and we have formed new relationships due to
  the quality of our tonnage and operations.

OMIs financial performance in 2005 is based on the following key elements of our business strategy:

|(1) | concentrate in two vessel categories: Suezmax tankers, which offer size advantages (over Aframaxes and Panamaxes) and geographic flexibility (over VLCCs), and product carriers, which provide an advantage because of
increasing demand for petroleum products in areas where no additional refineries have recently been built. Our product carrier sizes allow us to participate in most trading areas and over the last few years we have accumulated nine ice class
handysize product carriers, further expanding trading capabilities,
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | maintain high quality vessels and standards of operation through improved environmental procedures, crew training and maintenance and repair procedures,                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(3) | manage the balance between the ability to capture upside in stronger spot markets and the predictable revenues from long-term contracts, which cover a certain portion of fixed costs. This strategy has been effective in
strong and weak tanker markets,                                                                                                                                                                                                                                                                                  
|   
|(4) | maintain a balance between available liquidity to purchase
vessels as market conditions and opportunities arise and maintaining prudent
financial ratios (e.g. leverage ratio),                                                                                                                                                                                                                                                                                                                                                             
|   
|(5) | enter into strategic alliances and operate from geographic locations that provide us with market opportunities to improve our vessel utilization and earnings,                                                                                                                                                                                                                                                                                                                                                                              
|   
|(6) | monitor and manage the repurchase of common stock, and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(7) | balance paying a dividend to shareholders with other uses of cash, such as acquiring assets at opportunistic times.                                                                                                                                                                                                                                                                                                                                                                                                                         
|   

There are many factors that affect tanker rates, including supply and demand for vessels and the cargo that the vessels carry (the supply/demand for crude oil or refined product). Market
conditions, (see Market Overview section), economic and regulatory changes also affect revenues and expenses. The following are several key drivers for our Revenues and Operating income including:

|(1) | spot rates in the Suezmax tanker market and product tanker market (for those product carriers operating in the spot market or on time charters with profit sharing arrangements) (Note: for the next twelve months, we estimate
a variation of $1,000 per day for vessels on spot would increase/decrease net income by $12.1 million or $0.14 per share, of which $0.07 per share comes from each of the product carrier and Suezmax fleets),
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | the number of revenue earning operating days from the addition of vessels to our fleet,                                                                                                                                                                                                                                                                                                                                                       
|   

18

---



|(3) | marketing our vessels by the formation of strategic alliances (better scheduling of vessels and positioning, resulting in better utilization) and capitalizing on our experience and reputation in the industry,
and
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(4) | managing costs.                                                                                                                                                                                                     
|   

The Company studies market indicators and trends when making decisions for managing  risks, including but not limited to the following:  world oil demand (increases / decreases in consumption
of oil), tonne-mile demand, long-haul versus short-haul voyages or trading routes, world oil supply by geographic regions, inventory levels by geographic regions, world tanker newbuildings (orderbook) and deletions
(scrappings and conversions).

Beginning in
    2004, and continuing in 2005, there have been new trends that are resulting
    in increased demand for tankers and new trade routes. Our Suezmax vessels
    and product carriers are  benefiting from recent changes that are the result
    of improvements in the economies of China, Western Europe and South Asia.
    This improvement, for example, has triggered the supply of oil from Venezuela
    to supply the increased demand to China. This is a  long trade route that
    results in increased tonne miles for vessels, i.e. increased demand for tankers.
    OMI benefits from the increases in demand for oil in expanding areas directly
    and indirectly. Additionally, there continues to be a shortage of  refinery
    capacity in major consuming areas, (the U.S., Western Europe and Japan),
    and higher crude oil production in the long-haul Middle East have impacted
    the Company positively and have a favorable impact in the performance of
    both our crude oil  and product carrier fleets. During 2005, we began operating
    certain of our product carriers in the spot market and have been loading
    in the recently expanding Baltic region.

The following are several other significant items that have occurred during the first half of the year and so far in the third quarter of 2005:

Increases in
Operating Fleet

- We took delivery of five vessels, three handymax (the LAUREN, the BRAZOS and the FOX) and two handysize product carriers (the TEVERE and the THAMES) from the shipyard in January, March, May and the most recent two in July 2005, respectively.
- In January 2005, we agreed to time charter in two Suezmax vessels, which are to be entered in the Gemini pool, for seven years upon the vessels delivery from a shipyard. The
first vessel, the CAPE BASTIA was delivered in June and the other is scheduled to be delivered in September 2005.

Dispositions
of Non-Double Hull Vessels

- In January 2005, we sold our last two non-double hull handysize crude oil carriers, which were built in 1993 (TANDJUNG AYU and BANDAR AYU).

Time charter
contacts

- During February 2005, two three year time charter contracts for handymax product carriers (AMAZON and SAN JACINTO) expired; however, new three year time charters with different charterers were secured at higher rates beginning in April and May of 2005.
- During February 2005, a one year time charter contract for a handysize product carrier (RHONE) was extended for two years at a higher fixed rate plus profit sharing. The new time charter began in late May 2005.

19

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- During March 2005, a new three year time charter contract was secured, at a higher rate than its previous contract for a handymax product carrier (GUADALUPE). The vessels
previous three year time charter contract expired in January 2005, and the new charter began in April 2005.
- During April 2005, two five year time charter contracts for two handysize product carriers (MADISON and TRINITY) with original expiration dates of 2006 were each extended at higher rates for a five year period, which began in April 2005.
- During April 2005, two seven year time charter contracts with profit sharing arrangements for Suezmax tankers (SABINE and SACRAMENTO) were secured and began in May 2005.
- During May 2005, the time charter contracts for the OHIO and ORONTES (handysize product carriers) were revised. The time charter contracts now expire in June 2010 and are at a higher rate.
- During May 2005, we signed a three year time charter contract commencing in September 2005 for the SEINE (a handysize product carrier). The new time charter is a higher rate than
    the current time charter that expired in July 2005.
- During May 2005, we signed three year time charter contracts for the MOSELLE and ROSETTA, both handymax product carriers. The new contracts, which begin when the current time charters expire in February and March 2006 are at a higher rate.

Looking forward, we will continue to focus on our initiatives of growing the business with accretive transactions including adding modern vessels, maximizing profits and managing costs. See
Liquidity and Capital Resources section.

MARKET OVERVIEW

Suezmax Tanker Overview

The tanker market continued at a very profitable level in the second quarter of 2005, and the average TCE for Suezmax tankers in the West Africa to U.S. trade, though lower than the preceding
  quarter rate and the rate prevailing in the same period of last year, was the second highest level for this period since at least 1990. This was the result of higher world oil demand due to improving world economic activity especially in the U.S.,
  China and Southeast Asia, and high OPEC oil production, especially from the long-haul Middle East, notwithstanding an increase in the world tanker fleet. Freight rates in the crude oil tanker market have softened thus far in the third quarter, due
  to the usual summer tanker market slow-down.

20

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OPEC Crude Oil Production and Suezmax Tanker Earnings

Note: As of 06/30/05
Source: Industry Sources

The average OPEC oil production in the second quarter of 2005 totaled about 29.7 million barrels per day (b/d), an average increase of 1.4 million b/d, or 4.9% compared to the same
  period last year. Most of OPECs oil production growth came from the long-haul Middle East. After a reduction to its oil production quota, beginning April 1, 2004, OPEC has increased its quota five times by a total of 4.5 million b/d, to 28
  million b/d (excluding Iraq). The OPEC quota increases were the result of strong world oil demand growth, as well as tight oil markets and high oil prices. As these economic conditions are expected to persist, OPEC oil production, including Iraq, in
  the third quarter of 2005 is expected to average more than the preceding quarter and higher than the same period a year ago.

World oil demand decreased seasonally in the second quarter of 2005, but still averaged about 0.9 million b/d or 1.1% higher compared to the same period of last year, due to increasing world
    economic activity. World oil demand is expected to increase further in the second half of 2005 due to increasing world economic activity, especially in the United States, Latin America and China and the usual seasonal oil demand gains late in the
    year. World oil demand in 2005 is expected to increase at a slower rate than last year as measures are taken to moderate economic activity, especially in the U.S. and China as well as expected persistent high oil prices due to low spare oil
    production capacity and ongoing geopolitical risks.

21

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Total preliminary commercial crude oil and petroleum products inventories in the United States, Western Europe and Japan at the end of the second quarter of 2005 were about 109 million barrels,
or 5.2% higher than the year earlier level, and 2.6% above the average of the last five years. At the same time, crude oil inventories were 5.4% and petroleum products inventories were 1.0% higher than the average of the last five years,
respectively. Oil inventories in terms of days forward consumption are expected to decrease for the rest of the year, and by year-end be below the end 2004 level.

U.S., W. Europe and Japan Crude Oil Inventories

Note: Inventory figures as of end of June of each year. 
Source: Industry Sources

The world tanker fleet totaled 316.1 million deadweight tons (dwt) at the end of the second quarter of 2005, up by 11.5 million dwt or 3.8% from the year-end 2004 level. The tanker
  orderbook totaled about 80.9 million dwt, or 25.6% of the existing fleet at the end of the second quarter of 2005. Approximately 12.5 million dwt are for delivery in 2005, 24.5 million dwt in 2006, 26.5 million dwt in 2007 and most of the balance in
  2008.  The tanker orderbook includes 65 Suezmaxes of about 10.25 million dwt or 24.5% of the existing internationally trading Suezmax tanker fleet.

At the end of the second quarter of 2005, approximately 32.3 million dwt or 10.2% of the total tanker fleet was 20 or more years old, including 11.2 million dwt or 3.6% of the fleet which was
  25 or more years old. Furthermore, 10 Suezmaxes were 20 or more years old, including 4 which were 25 or more years old. Tanker sales for scrap and for Floating Production Storage Offloading (FPSO) conversion totaled about 3.8 million dwt
  in the first half of 2005, including three Suezmaxes and three VLCCs.

The EU adopted tanker regulations which commenced on October 21, 2003. In response to the EU regulations, the IMO adopted new strict tanker regulations which commenced on April 5, 2005.  These
  regulations primarily prevent single-hull tankers of 5,000 dwt and above from carrying heavy fuel oil from early April 2005, accelerate the phase-out of single-hull tankers to 2010, in line with EU rules, and force all single-hull tankers to comply
  with the Condition Assessment Scheme (CAS) from the age of 15 years, commencing in 2005. Finally, tankers with only double sides or double bottoms will be allowed to operate beyond 2010, provided that these tankers were in service on
  July 1, 2001. Such tankers will not be allowed to

22

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operate beyond the date on which they become 25 years of age after the date of delivery.

At the end of June 2005, there were about 99.2 million dwt of tankers or 31.4% of the total tanker fleet which will be affected by these regulations.

Product Tanker Overview

The strong freight rate environment of the product tanker market continued in the second quarter of 2005, and the average spot TCE for handysize product tankers in the Caribbean, though lower
  than the preceding quarter rate was higher than the rate prevailing in the same period of last year, and, together with the second quarter of 2001, the highest level for this period since at least 1990. The product tanker market strength has been
  the result of continuous growth in the demand for oil due to increasing world economic activity especially in the U.S., China and Southeast Asia, notwithstanding an increase of the world product tanker fleet. Freight rates in the product tanker
market continued strong thus far in the third quarter.

The world product tanker fleet, (which ranges from small 10,000 dwt product carriers to larger than 100,000 dwt for coated Aframax tankers) totaled about 63.1 million dwt at the end of the
  second quarter of 2005, up by about 5.2% from the year-end 2004 level. The product tanker orderbook for delivery over the next few years totaled about 30.0 million dwt, or about 47.5% of the existing product tanker fleet at the end of the second
  quarter of 2005. Approximately 6.4 million dwt are for delivery in 2005, 11.5 million dwt in 2006, 9.2 million dwt in 2007 and most of the balance in 2008. At the end of the second quarter of 2005, approximately 12.7 million dwt or 20.1% of the
  existing fleet was 20 or more years old. The orderbook for handysize and handymax product tankers at the end of June 2005 totaled about 12.3 million dwt or 33.0% of the existing handysize and handymax product tanker fleet.

Total preliminary commercial inventories of oil products in the United States, Western Europe and Japan at the end of the second quarter of 2005 were 70 million barrels or 5.3% higher than the
  same time a year ago, and 1.0% higher than the average of the last five years. At the same time, inventories of gasoline, the seasonal product, in these areas were 3.9% higher than last year and 0.6% above the last five years average. Commercial
  gasoline stocks in the United States at the end of June 2005 were approximately 3.4% and 0.9% higher than last year and the last five years average, respectively.

23

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U.S., W. Europe and Japan Product Inventories

Note: Inventory figures as of end of June of each year. 
Source: Industry Sources

For the balance of 2005, the tanker market is expected to benefit as a result of improving world economic activity especially in the U.S., China and Southeast Asia, seasonally higher world oil
demand in the second half of the year, shortage of refinery capacity in the United States, Western Europe and Asia, possible disruptions due to political instability in short-haul oil producers Venezuela and Nigeria, and the phase out of single-hull
tankers without segregated ballast by the end of 2005.

OMIs fleet currently comprises vessels aggregating approximately 3.8 million dwt. It includes 16 Suezmaxes (excluding two Suezmax vessels in the Gemini pool owned by a pool member), 28
handysize and handymax product carriers (including two vessels delivered in July 2005), and two Panamax product carriers. Currently, three of the Suezmax tankers are chartered-in: the OLIVER JACOB, whose charter expires June 2010, the MAX JACOB,
whose charter expires December 2006 and the CAPE BASTIA, whose charter expires June 2012. We have a commitment to charter-in an additional vessel, beginning in September of 2005.



|                                           | Number     |  |    
|------------------------------------------ | ---------- |  | ---
|                                           | Of vessels |  | Dwt
|                                           |            |  |    
|Crude Oil Fleet:                           |            |  |    
|1998-2005
        built Suezmax vessels    | 13         |  |    
|1999-2005
        built Suezmax vessels(A) | 3          |  |    
|                                           |            |  |    
|Total                                      | 16         |  |    
|                                           |            |  |    
|Product Carrier (Clean)
          Fleet: |            |  |    
|1999-2005
        built handysize vessels  | 17         |  |    
|2000-2005
        built handymax vessels   | 11         |  |    
|2003 built
        Panamax vessels         | 2          |  |    
|                                           |            |  |    
|Total                                      | 30         |  |    
|                                           |            |  |    
|Total
          Fleet                      | 46         |  |    
|                                           |            |  |    

(A) Chartered-in Suezmax vessels.

24

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Currently, we have the following vessels under construction:

|                                        |  | Type of   |  | Date To Be |  |         |  | Charter   
|--------------------------------------- |  | --------- |  | ---------- |  | ------- |  | ----------
|Name of Vessel                          |  | Vessel    |  | Delivered  |  | Dwt     |  | Expiration
|                                        |  |           |  |            |  |         |  |           
|Vessels Under Construction:             |  |          
|WABASH                                  |  | Handymax  |  | Jan-06     |  | 47,000  |  | SPOT      
|KANSAS                                  |  | Handymax  |  | Mar-06     |  | 47,000  |  | SPOT      
|RHINE                                   |  | Handysize |  | Mar-06     |  | 37,000  |  | SPOT      
|REPUBLICAN                              |  | Handymax  |  | Apr-06     |  | 47,000  |  | SPOT      
|PLATTE                                  |  | Handymax  |  | May-06     |  | 47,000  |  | SPOT      
|                                        |  |           |  |           
|Total Vessels Under Construction        |  | 225,000   |  |           
|                                        |  |           |  |            |  |         |  |           
|Vessel to be Chartered-in:              |  |          
|CAPE BONNY                              |  | Suezmax   |  | Sep-05     |  | 160,000 |  | SPOT      
|                                        |  |           |  |            |  |         |  |           
|Total Fleet with Vessels to be acquired |  | 4,218,779 |  |           
|                                        |  |           |  |            |  |         |  |           

Critical Accounting Estimates

There have been no significant changes to our critical accounting estimates during the six months ended June 30, 2005 as compared to those we disclosed in Managements Discussion and
  Analysis of Results of Operations and Financial Condition included in our Annual Report on Form 10-K for the year ended December 31, 2004.

Consolidated Results

OMIs net income was $47.1 million or $0.56 basic and diluted earnings per share (EPS) and $122.9 million or $1.45 basic and diluted EPS for the three and six
  months ended June 30, 2005, respectively, compared to net income of $30.3 million or $0.38 basic and diluted EPS and $86.7 million or $1.08 basic and $1.07 diluted EPS for the three and six months ended June 30, 2004,
  respectively.

Results of Operations for the Three and Six Months Ended June 30, 2005 
Compared to the Three and Six Months ended June 30, 2004

The following table summarizes
our results of operations for the three and six months ended June 30, 2005, compared
to the three and six months ended June 30, 2004:

|                                            | For the Three
          Months |       |   | For the Six Months |  
|------------------------------------------- | ------------------------------ | ----- | - | ------------------ | -
|                                            | Ended June 30,                 |       |   | Ended June 30,     |  
|(In millions)                               | 2005                           |       |   | 2004               |  
|                                            |                                |       |   |                    |  
|Voyage and time charter
        revenue     | $                              | 148.2 |   |                    | $
|Voyage expenses                             |                                | 33.0  |   |                    |  
|                                            |                                |       |   |                    |  
|Time charter equivalent
        revenue     |                                | 115.2 |   |                    |  
|Other revenue                               |                                | 0.2   |   |                    |  
|Vessel expenses                             |                                | 23.1  |   |                    |  
|Charter hire expense                        |                                | 11.9  |   |                    |  
|Depreciation and amortization               |                                | 17.1  |   |                    |  
|General and administrative
        expenses |                                | 7.1   |   |                    |  
|Gain on disposal of
        vessels         |                                |      |   |                    |  
|                                            |                                |       |   |                    |  
|Operating income                            |                                | 56.2  |   |                    |  
|Loss on Investment                          |                                |      |   |                    |  
|Interest expense                            |                                | (10.3 | ) |                    |  
|Interest income                             |                                | 0.2   |   |                    |  
|Other                                       |                                | 1.0   |   |                    |  
|                                            |                                |       |   |                    |  
|Net income                                  | $                              | 47.1  |   |                    | $
|                                            |                                |       |   |                    |  



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Time Charter Equivalent Revenue

TCE revenue comprises revenue from vessels operating on time charters (TC) and voyage revenue less voyage expenses from vessels operating in the spot market. Consistent with
  industry practice we use TCE revenue as a key performance indicator as we measure and analyze fluctuations between financial periods; (1) TCE revenue serves as an industry standard for measuring revenue and comparing results between geographical
  regions and among competitors and (2) as a method of equating TCE revenue generated from a voyage charter to time charter revenue. A time charter involves the placing of a vessel at the charterers disposal for a set period of time, during
  which the charterer may use the vessel in return for the payment by the charterer of a specified daily or monthly hire rate. Under a voyage charter, the owner of a vessel agrees to provide the vessel for the transport of specific goods between
  specific ports in return for the payment of an agreed upon freight per ton of cargo or, alternatively, for a specified total amount. All operating costs are for the owners account.

OMI operates vessels on voyage (or spot) charters and on time charters (TC). In both 2005 and 2004, the majority of our tonnage (primarily our Suezmax vessels) operated in the spot market, giving us the ability
  to take advantage of the strong spot market. Currently, 68 percent (see Note 1 below) of our vessels by dwt, which is 23 vessels, operate in the spot market and 23 of our 46
  vessels operate on time charters (see Fleet Report), ten under profit sharing arrangements. Our time charters with profit sharing arrangements have a floor rate, and we share in the profit above that rate equally, without a cap. This enables us to
  benefit from strong tanker markets while protecting our downside. Revenue generated by time charters gives the Company the ability to cover certain fixed charges (cost to operate the chartered vessels, consolidated general and administrative
  expenses and interest expense).

Note 1: Our percentage of vessels by dwt operating in the spot market decreased in the second quarter by 9 percent from 77 percent in the first quarter primarily because of two Suezmax vessels that began time charters in
  May (with profit sharing), in addition to time charter contracts beginning in the second quarter for vessels that previous came off time charters and operated in the spot market for a short period of time before starting new time
  charters.

The Company earned TCE revenue of $115.2 million for the three months ended June 30, 2005 and $ 83.3 million for the three months ended June 30, 2004. During the second quarter of 2005,
  73 percent or $84.1 million of our TCE revenue was earned by vessels operating on voyage charters in the spot market and 27 percent or $31.1 million of our TCE revenue was earned by vessels operating on TC. We earned TCE revenue of
$256.1 million for the six months ended June 30, 2005 and $194.4 million for the six months ended June 30, 2004. During the first six months of 2005, 78 percent or $199.0 million of our TCE revenue was earned by vessels operating on
  voyage charters in the spot market and 22 percent or $57.1 million of our TCE revenue was earned by vessels operating on TC. TCE revenue increased in the three and six months ended June 30, 2005 compared with the three and six months ended June
  30, 2004 primarily because of more operating days in 2005 from the twelve vessels acquired in 2004 and four acquired in 2005, (six in the crude oil fleet and ten in the product carrier fleet). Twelve of the vessels acquired operated in the spot
  market and four were on time charters during the second quarter of 2005. See discussion below for the fluctuation analysis of TCE revenue for vessels on spot and on time charters and the Market Overview section for explanations for the rate
  fluctuations during the 2005 and 2004 periods in the spot market.

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The following table compares TCE revenue earned by vessels on spot for the three and six months ended June 30, 2005 to the three and six months ended June 30, 2004, in millions of dollars and
as a percent increase in spot revenue in 2005:



|                                       |                      |      |      |   |                    |  |      |      |      |   |        | 
|-------------------------------------- | -------------------- | ---- | ---- | - | ------------------ |  | ---- | ---- | ---- | - | ------ | 
|                                       | For the Three Months |      |      |   | For the Six Months |  |      |     
|                                       | Ended June 30,       |      |      |   | Ended June 30,     |  |      |     
|TCE Revenue for vessels on
    Spot    | 2005                 |      | 2004 |   | Change             |  | 2005 |      | 2004 |   | Change | 
|                                       |                      |      |      |   |                    |  |      |      |      |   |        | 
|Crude Oil Fleet                        | $                    | 61.9 |      | $ | 50.9               |  | $    | 11.0 |      | $ | 154.2  | 
|Product Carrier Fleet                  |                      | 22.2 |      |   | 2.3                |  |      | 19.9 |      |   | 44.8   | 
|                                       |                      |      |      |   |                    |  |      |      |      |   |        | 
|Total                                  | $                    | 84.1 |      | $ | 53.2               |  | $    | 30.9 |      | $ | 199.0  | 
|                                       |                      |      |      |   |                    |  |      |      |      |   |        | 
|% increase in spot revenue
    in 2005 |                      |      |      |   |                    |  |      | 58   | %    |   |        | 

TCE revenue of $84.1 million earned by vessels operating on spot charters during the three months ended June 30, 2005 increased $30.9 million compared to TCE revenue of $53.2 million earned by vessels operating
in the spot market during the three months ended June 30, 2004. The increase in earnings of 58% was the result of (1) 441 more operating days in 2005 for the Suezmax fleet, primarily from the five Suezmax vessels acquired in the third quarter of
2004 and (2) additional TCE revenue at an average TCE rate of $28,731 per day from 11 product carriers for 774 operating days, six product carriers acquired in 2004 and 2005 and five vessels that were previously operating on time charters which
began operating in the spot market (three of which have committed to new time charters during the second quarter). One single hull vessel that operated in the spot market at an average TCE rate of $14,880 a day during the second quarter of 2004
was sold in December 2004.

TCE revenue of $199.0 million earned by vessels operating on voyage charters during the six months ended June 30, 2005 increased $63.4 million compared to TCE revenue of $135.6
  million earned by vessels operating in the spot market during the six months ended June 30, 2004. The increase in earnings of 47% was the result of (1) 879 more operating days in 2005 for the Suezmax fleet, primarily from the five Suezmax vessels
  acquired in 2004 and (2) additional TCE revenue from 1,605 operating days at an average TCE rate of $27,885 per day from 11 product carriers. The one single hull vessel that was sold in 2004 operated in the spot market at an average TCE rate of
$18,301 a day during the six months ended June 30, 2004.

The following table compares TCE revenue earned by vessels on TC for the three and six months ended June 30, 2005 to the three and six months ended June 30, 2004, in millions of dollars and as
a percent of Total TCE revenue in each of the three and six month ended June 30, 2005 and 2004:



|                                        | For the Three Months |      |      |   | For the Six Months |   |      |     
|--------------------------------------- | -------------------- | ---- | ---- | - | ------------------ | - | ---- | ----
|                                        | Ended June 30,       |      |      |   | Ended June 30,     |   |      |     
|TCE Revenue for vessels on TC           | 2005                 |      | 2004 |   | Change             |   | 2005 |     
|                                        |                      |      |      |   |                    |   |      |     
|                                        |                      |      |      |   |                    |   |      |     
|Crude Oil Fleet                         | $                    | 2.4  |      | $ | 3.0                |   | $    | (0.6
|Product Carrier Fleet                   |                      | 28.7 |      |   | 27.1               |   |      | 1.6 
|                                        |                      |      |      |   |                    |   |      |     
|Total                                   | $                    | 31.1 |      | $ | 30.1               |   | $    | 1.0 
|                                        |                      |      |      |   |                    |   |      |     
|                                        |                      |      |      |   |                    |   |      |     
|% of TCE Revenue for
        vessels on |                      |      |      |   |                    |   |      |     
|TC
        to Total TCE Revenue         |                      | 27   | %    |   | 36                 | % |      |     

TCE revenue of $31.1 million earned by vessels on time charter during the second quarter of 2005 increased $1.0 million compared to TCE revenue of $30.1 million earned by vessels on
time charter during the second quarter of 2004. The increase in TCE revenue of 3% was a result of TC

27

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revenue from two newbuildings acquired in April and July 2004, one of which had profit sharing (first anniversary for profit sharing earned over one year) in April 2005. Increases in TC revenue earned during the second
quarter in 2005 were partially offset by decreases from the expiration of five time charters resulting in 227 fewer operating days in the second quarter of 2005 (three vessels whose time charters expired during the 2005 period, operated in the spot
market for a short period prior to beginning new time charters).

TCE revenue of $57.1 million earned by vessels on time charter during the six months ended June 30, 2005 decreased $1.7 million compared to TCE revenue of $58.8 million earned by
  vessels on time charter during the six months ended June 30, 2004. The decrease in TCE revenue of 3% was from the expiration of five time charters resulting in 587 fewer operating days for the six months ended June 30, 2005. Decreases were partially
  offset by increases in TC revenue from three vessels acquired in February, April and July 2004, one of which earned profit sharing during 2005.

Note: For detailed information of fluctuations by vessel type, see Breakdown by Fleet sections.

Gemini Tankers

In
  December 2003, OMI began operating Gemini Tankers ("Gemini"), which is a wholly owned subsidiary of OMI. Gemini is a pool for double hull Suezmax vessels. Currently, there are 16 Suezmax
  vessels (13 from OMI and three from another participant) operating in the pool. The earnings of the pool are allocated to the pool members using an agreed upon formula. The gross revenues of Gemini are reflected in OMIs consolidated revenues,
  and the charter hire expense for the other participant vessels are included in OMIs
  consolidated charter hire expense.

During 2005, four 2005 built double hull Suezmaxes (two vessels chartered-in by OMI and two vessels from the other pool participant) will enter the pool. One vessel chartered-in by OMI will
  start in the third quarter of 2005 and another vessel from the other participant also began in July 2005. Additionally, two Suezmax vessels owned by OMI exited the pool in May 2005 to begin long-term time charters.

Vessel Expense

Vessel expense of $23.1 million for the three months and $43.8 million for the six months ended June 30, 2005, increased by $8.5 million and $15.3 million, respectively,
  compared to $14.6 million for the three and $28.5 million for the six months ended June 30, 2004.

Vessel expense includes operating expenses such as crew related costs, stores, routine maintenance and repairs, insurance and miscellaneous. These expenses are a function of the fleet size,
  utilization levels for certain expenses, and requirements under laws or regulations, by charterers and our own standards.

Vessel expenses increased $8.5 million for the three months and $15.3 million for the six months ended June 30, 2005 compared to the same periods in 2004, primarily as a result of
  increased costs for additional vessels acquired (12 vessels during 2004 and three vessels during 2005 (excluding a vessel chartered-in)), in addition to higher costs in 2005 relating to crew expenses, insurance, storing the ships (spare parts and
  supplies) and lube oils. Increases in costs were partially offset by a reduction in vessel

28

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expenses for the disposal of the older single hull and non-double hull vessels (six vessels during 2004 and two vessels during 2005).

Charter Hire Expense

Charter hire expense is typically the payment made to the owner of the vessel chartered-in for our use. The owner is responsible for the vessels operating expenses, in addition to drydock
  and capital expenditures. We are responsible for the voyage expenses. Additionally, expenses for the vessels from the other Gemini pool participant are included in charter hire expense.

Charter hire expense was comparable in the second quarter of 2005 to the second quarter of 2004 and decreased by $0.5 million for the six months ended June 30, 2005 compared to the same
  period in 2004. Decreases in 2005 charter hire expense resulted primarily from a reduction of charter hire expense for the two vessels from the other pool participant (see Note above for discussion of Gemini Pool).

Depreciation and Amortization Expense

Depreciation and amortization expense of $17.1 million for the three months and $33.6 million for the six months ended June 30, 2005, increased by $5.0 million and $8.1 million,
respectively, compared to $12.1 million for the three months and $25.5 million for the six months ended June 30, 2004 as the result of additional depreciation expense from the acquisition of 15 vessels, which were offset in part by
reductions to depreciation expense relating to the eight vessels disposed of in 2004 and in January 2005.

General and administrative (G & A) expenses of $7.1 million for the three months and $13.5 million for the six months ended June 30, 2005, increased by $2.6 million
and $4.6 million, respectively, compared to $4.5 million for the three months and $8.9 million for the six months ended June 30, 2004 because of increased compensation expense from increases in personnel due to a larger fleet, expenses
from OMIs London office and other additional corporate requirements.

Gain on Disposal of Vessels

During the six months ended June 30, 2005, a gain on disposal of vessels of $2.9 million was recorded, which resulted from the sale of two non-double hull crude oil carriers.

The gain on disposal of $0.4 million for the three and six months ended June 30, 2004, resulted from the sale of two single hull vessels previously held for sale, a 1981 and 1984 built
  product carrier.

Interest Expense

Interest expense of $10.3 million for the three months and $20.8 million for the six months ended June 30, 2005, increased by $2.7 million or 36 percent and $5.4 million or 35
  percent, respectively, compared to $7.6 million for the three months and $15.4 million for the six months ended June 30, 2004.

29

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The following table is
a breakdown of Interest expense for the three and six months ended June 30, 2005
compared to the three and six months ended June 30, 2004:

|                                            | For The Three |      |   | For The Six  |  
|------------------------------------------- | ------------- | ---- | - | ------------ | -
|                                            | Months Ended  |      |   | Months Ended |  
|                                            | June 30,      |      |   | June 30,     |  
|In millions                                 | 2005          |      |   | 2004         |  
|                                            |               |      |   |              |  
|Interest before swap interest,              |               |      |   |              |  
|capitalized
        interest,               |               |      |   |              |  
|amortization
        of debt issue costs    | $             | 9.5  |   |              | $
|Impact of swaps                             |               | 0.1  |   |              |  
|Capitalized interest                        |               | (0.9 | ) |              |  
|Amortization of debt
    issue cost & other |               | 1.6  |   |              |  
|                                            |               |      |   |              |  
|Interest expense                            | $             | 10.3 |   |              | $
|                                            |               |      |   |              |  

Interest expense, before swap interest, capitalized interest, amortization of debt issue and other costs was approximately 64 percent higher during the three months and 61 percent higher during
the six months ended June 30, 2005 compared to the three and six months ended June 30, 2004, primarily because of the increase in the average debt balance during the 2005 period.  The average debt balance increased by approximately 59 percent during
the three months ended June 30, 2005 compared to the same period in 2004 (from $532.0 million at June 30, 2004 to $847.6 million at June 30, 2005) and approximately 61 percent during the six months ended June 30, 2005 compared to the same
period in 2004 (from $546.5 million at June 30, 2004 to $877.3 million at June 30, 2005), due to additional financing for the acquisition of vessels. Fluctuations in interest rates did not have a material impact on the increases in interest
expense.

Segment InformationDetailed Results of
  Operations

OMIs segment information is detailed by its two operating segments, its crude oil tankers and product carrier fleets. OMI also manages its performance by category in the tables that
  follow.

The following discussion of Vessel Operating Income (defined as TCE revenue less vessel expense, charter hire expense and depreciation and amortization) for our crude oil tanker fleet and our
  product carrier or clean fleet segments excludes gain on disposal of vessels and General and administrative expenses.

Crude Oil Tankers Results of Operations

Vessel Operating Income increased $5.8 million for the three months and $15.0 million for the six months ended June 30, 2005 over the comparable three and six months ended June 30,
  2004. The net increase in Vessel Operating Income during the 2005 was primarily attributable to increases in the Suezmax TCE revenue resulting from increased earnings for the five Suezmax vessels delivered in July and August of 2004. Average TCE
  rates earned by Suezmax vessels operating in the spot market in both 2005 and 2004 periods were comparable.

The following table illustrates the crude oil fleet Vessel Operating Income by vessel type (other than vessels sold) in millions, average daily vessel expense, average number of OMI vessels
  operating in the crude oil fleet and the average daily TCE and number of days earned for the three and six months ended June 30, 2005 compared to the three and six months ended June 30, 2004:

30

---



BREAKDOWN BY FLEET

|                                                        | FOR THE THREE |        | FOR THE SIX 
|------------------------------------------------------- | ------------- | ------ | ------------
|                                                        | MONTHS ENDED  |        | MONTHS ENDED
|                                                        | JUNE 30,      |        | JUNE 30,    
|                                                        | 2005          |        | 2004        
|                                                        |               |        |             
|CRUDE FLEET:                                            |               |        |             
|Suezmaxes:                                              |               |        |             
|TCE revenue(1),(2)                                      |               |        |             
|Suezmax-on
        spot                                 | $             | 61.8   |             
|Suezmax-on
        time charter                         |               | 2.4    |             
|                                                        |               |        |             
|Total TCE
        revenue                               |               | 64.2   |             
|Vessel
        expense                                  |               | 8.7    |             
|Charter
        hire expense                            |               | 11.9   |             
|Depreciation
        and amortization                   |               | 8.0    |             
|                                                        |               |        |             
|Vessel
        Operating Income                         | $             | 35.6   |             
|                                                        |               |        |             
|                                                       
|Average daily TCE-on
        spot                       | $             | 43,543 |             
|Number of OMI TCE revenue
        days- on spot         |               | 1,239  |             
|Number of pool member
        TCE revenue days(3)       |               | 182    |             
|                                                       
|Average daily TCE-on
        time charter               | $             | 29,359 |             
|Number of OMI TCE revenue
        days- on time charter |               | 81     |             
|                                                       
|Average number of OMI
        vessels for the period*   |               | 15.1   |             
|                                                       
|Average daily vessel
        expense                    | $             | 7,370  |             
|                                                       
|Handysize Crude Oil
          Carriers sold in 2005(4): |               |        |             
|TCE revenue(1)                                          | $             |       |             
|Vessel
        expense                                  |               | 0.1    |             
|Depreciation
        and amortization                   |               |       |             
|                                                        |               |        |             
|Vessel
        Operating Income (Loss)                  | $             | (0.1   | )           
|                                                        |               |        |             
|                                                       
|Average daily TCE                                       |               | n/a    |             
|Number of TCE revenue
        days                      |               | n/a    |             
|Average number of vessels
        for the period        |               | n/a    |             
|                                                       
|Other Crude Carriers
          Sold in 2004(5):         |               |        |             
|TCE revenue (1)                                         | $             |       |             
|Vessel
        expense                                  |               |       |             
|Depreciation
        and amortization                   |               |       |             
|                                                        |               |        |             
|Vessel Operating Income                                 | $             |       |             
|                                                        |               |        |             
|                                                       
|Average daily TCE                                       |               | n/a    |             
|Number of TCE revenue
        days                      |               | n/a    |             
|Average number of vessels
        for the period        |               | n/a    |             
|                                                       
|Total Vessel Operating
        Income                   | $             | 35.5   |             
|                                                        |               |        |             



|    | *     includes three vessels
        chartered-in during the 2005 periods shown and two during the 2004 periods
        shown.                                                                                                                                                                                                                                                                                                                                              
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Note: Number of operating or TCE revenue days
        used to compute Average daily TCE includes waiting days and is reduced
        only for the days the vessels are out of service due to drydock. Average
        daily vessel expenses are computed using the number of days in the period
    which OMI owned the vessel.                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(1) | Consistent with general practice in the tanker shipping industry, we use TCE revenue (defined as voyage and time charter revenues less voyage expenses) as a measure of equating revenue generated from a voyage charter to
revenue generated from a time charter. TCE revenue, a non-GAAP measure, provides more meaningful information to us than voyage revenues, the most directly comparable GAAP measure because it assists us in making operating decisions about
the
|   

31

---



|    | deployment of our vessels and their performance. TCE revenues are also widely used by investors and analysts in the tanker shipping industry for comparing financial performance between companies and to industry averages.
Voyage expenses comprise all expenses relating to particular voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions. Under time-charter contracts the charterer pays the voyage expense, with the exception of
commissions, whereas under voyage charter contracts the shipowner pays the voyage expenses. TCE revenue and expenses includes revenue and expense generated by the Gemini pool (a Suezmax pool). The Suezmax pool began in December 2003 and included our
15 Suezmaxes ( as of June 2005 there were 13 Suezmaxes from OMI, see note (3) below) and two Suezmaxes owned by another pool member. The Suezmax vessel chartered-in (CAPE BASTIA) at the end of June 2005 and the Suezmax vessel from the other pool
participant will start operating in the Gemini pool during the third quarter of 2005.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | In July and August 2004, three 2003 built and two 2004 built Suezmax vessels were acquired. During May 2005, two Suezmax vessels previously operating in the spot market (Gemini pool) began operating on seven year time
charters with profit sharing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(3) | Number of TCE revenue days for the two Suezmaxes owned by another pool member.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(4) | In January 2005, two handysize crude oil carriers were sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(5) | During 2004, our ULCC vessel was sold in the fourth quarter and our three Panamax vessels were disposed of in the second and third quarters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   

Fluctuations in each of the crude oil tanker groups were as follows:

Suezmaxes:The
    increase in Vessel Operating Income of $9.8 million for the three months
    and $27.1 million for the six months ended June 30, 2005 over the comparable
    periods in 2004 was attributable to the increases in TCE revenues of $15.7
    million for the three months and $40.1 million for the six months, offset
    in part by the increases in vessel expense of $4.7 million for the three
    months and $8.8 million for the six months in 2005 over the same 2004
    periods. Depreciation and amortization expense of increased $3.6 million
    for the three months and $7.1 million for the six months ended June 30,
    2005 over the same 2004 periods. Increases in Suezmax vessels TCE revenue
    was primarily the result of 441 and 879 more operating days in the three
    and six months ended June 30, 2005 compared to the same periods in 2004 resulting
    primarily from five vessels acquired in the third quarter of 2004. Increases
    in vessel expense resulted from the five additional vessel operating in 2005,
    in addition to, an approximate increases of 35 percent in expenses, primarily
    relating to crew expense, insurance expense and stores (spare parts, lube
oils). Depreciation expense also increased as a result of the vessels acquired.

During May 2005, two
    Suezmax vessels previously operating in the spot market began seven year
    time charters with profit sharing. Profit sharing, for these vessels will
be recognized in accordance with the time charter contract (see Note (1) below).

Note
  (1): In accordance with SEC Staff Accounting Bulletin No. 101 Revenue Recognition
  in Financial Statements, we recognize the profit sharing or contingent revenue
  only after meeting a  threshold, which is the minimum yearly charter hire.
  The Company receives preliminary profit sharing after six months. This distribution
  is recorded in deferred revenue (a liability) until the threshold is reached.
  Amounts receivable arising from  profit sharing arrangements are accrued based
  on the actual results of the voyages recorded as of the reporting date.

Handysize Crude
      Oil Carriers sold in 2005:Vessel
      Operating Income decreased by $1.6 million for the three months and $2.5
      million for the six months ended June 30, 2005 compared to the three and
      six months ended June 30, 2004. The decrease is the result of 182 and 307
      fewer operating days in the three and six months ended June 30, 2005 compared
      to the same periods in 2004. The two vessels in this group were on long-term
time charters when they were sold.

32

---



Other Crude Carriers Sold in 2004:Vessel Operating Income decreased by $2.4 million for the three months and $9.6 million for the six months
ended June 30, 2005 compared to the three and six months ended June 30, 2004. The decrease is the result of 274 and 638 fewer operating days in the three and six months ended June 30, 2005 compared to the same periods in 2004. During 2004, four
single hull crude oil carriers were sold; in the fourth quarter, our Ultra Large Crude Carrier (ULCC) was sold, and in the second and third quarters three Panamax vessels were sold.

Product Carriers Results of Operations

Vessel Operating Income increased $12.6 million for the three months and $23.8 million for the six months ended June 30, 2005 over the comparable three and six months ended June 30,
  2004. The increases in Vessel Operating Income in the 2005 periods were attributable to seven product carriers acquired in 2004 and three in 2005, in addition to increased profit sharing of $2.3 million and $4.0 million for the three and six
  months ended June 30, 2005, respectively, compared to the same periods in 2004. The increases were offset partially by the decrease in earnings for the two single hull product carriers that were disposed of in 2004.

The following table illustrates the product carrier fleet Vessel Operating Income by vessel type (other than vessels sold) in millions, Average daily vessel expense, Average number of OMI
  vessels operating in the product carrier fleet and the average daily TCE and number of days earned for the three and six months ended June 30, 2005 compared to the three and six months ended June 30, 2004.

BREAKDOWN BY FLEET

|                                                      | FOR THE THREE  |        | FOR THE SIX   
|----------------------------------------------------- | -------------- | ------ | --------------
|                                                      | MONTHS         |        | MONTHS        
|                                                      | ENDED JUNE 30, |        | ENDED JUNE 30,
|                                                      | 2005           |        | 2004          
|                                                      |                |        |               
|PRODUCT CARRIER FLEET:                                |                |        |               
|Products Carriers-on
          time and spot charter: |                |        |               
|TCE revenue(1)                                        |                |        |               
|Products-on
        time charter(2)                   | $              | 28.7   |               
|Products-on
        spot(3)                           |                | 22.2   |               
|                                                      |                |        |               
|Total TCE
        revenue                             |                | 50.9   |               
|Vessel
        expenses                               |                | 14.4   |               
|Depreciation
        and amortization                 |                | 8.9    |               
|                                                      |                |        |               
|Vessel
        Operating Income                       | $              | 27.6   |               
|                                                      |                |        |               
|                                                     
|Average daily TCE-time
        charters               | $              | 16,895 |               
|Number of TCE revenue
        days-on time charters   |                | 1,700  |               
|                                                     
|Average daily TCE- on
        spot                    | $              | 28,731 |               
|Number of TCE revenue
        days-on spot charters   |                | 774    |               
|Average number of vessels
        for the period      |                | 27.5   |               
|                                                     
|Average daily vessel
        expense                  | $              | 5,750  |               
|                                                     
|Products Carriers-sold
          in 2004(4):          |                |        |               
|TCE revenue(1)                                        | $              | 0.1    |               
|Vessel
        expenses                               |                |       |               
|Depreciation
        and amortization                 |                |       |               
|                                                      |                |        |               
|Vessel
        Operating Income                       | $              | 0.1    |               
|                                                      |                |        |               
|                                                     
|Average daily TCE                                     |                | n/a    |               
|Number of TCE revenue
        days                    |                | n/a    |               
|Average number of vessels
        for the period      |                | n/a    |               
|                                                     
|Average daily vessel
        expense                  |                | n/a    |               
|                                                     
|Total Vessel Operating
          Income               | $              | 27.7   |               
|                                                      |                |        |               

33

---



|    | Note: Number of operating or TCE revenue days
        used to compute Average daily TCE includes waiting days and is reduced
        only for the days the vessels are out of service due to drydock. Average
        daily vessel expenses are computed using the number of days in the period
    which OMI owned the vessel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(1) | Consistent with general practice in the tanker shipping industry, we use TCE revenue (defined as voyage and time charter revenues less voyage expenses) as a measure of equating revenue generated from a voyage charter to
revenue generated from a time charter. TCE revenue, a non-GAAP measure, provides more meaningful information to us than voyage revenues, the most directly comparable GAAP measure because it assists us in making operating decisions about the
deployment of our vessels and their performance. TCE revenues are also widely used by investors and analysts in the tanker shipping industry for comparing financial performance between companies and to industry averages. Voyage expenses comprise all
expenses relating to particular voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions. Under time-charter contracts the charterer pays the voyage expense, with the exception of commissions whereas under voyage
charter contracts the shipowner pays the voyage expenses.
|   
|(2) | During the three and six months ended June 30, 2005, OMI recognized profit sharing revenue of approximately $3.4 million and $6.6 million, respectively, compared to $1.1 million and $2.6 million for the
three and six months ended June 30, 2004, respectively. During May 2005, a handysize product carrier was acquired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(3) | In January and March 2005, two handymax product carriers were acquired. In February, April, July, October and December 2004, four handysize and three handymax product carriers were acquired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(4) | For the three and six months ended June 30, 2004, revenue was generated by one vessel operating in the spot market and one vessel on time charter. During August and December 2004, the two single hull vessels were sold.
The 2005 balances reflect the settlement of demurrage and other vessel expenses relating to the vessels sold in 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   

Fluctuations in each
of the product carrier groups were as follows:

Productson time charter:TCE revenue increased $1.6 million during the three months and $1.0 million during the six months ended June 30,
  2005 compared to the same periods in 2004, primarily from receiving higher profit sharing in 2005 and higher contracted revenues for new or extended time charter contracts. Increases in TCE revenue was offset by 91 and 182 fewer operating days in
  the three and six months of 2005 resulting from the sale of a vessel in August 2004 that was on time charter, and 227 and 587 fewer operating days from five vessels that operated on time charters in the comparable periods of 2004; two time charters
  expired in the fourth quarter of 2004 and three time charters during the first quarter 2005 (all three began new time charters in the second quarter of 2005).

At June 30, 2005, seven vessels with long-term time charters have base time charter rates with profit sharing agreements (50% profit sharing above the base rate, see Note (1) below). A vessel delivered in July 2005, began a time charter with profit sharing.

Note (1): In accordance with SEC Staff Accounting Bulletin No. 101 Revenue Recognition in Financial Statements, we recognize the profit sharing or contingent revenue only after meeting a
  threshold, which is the minimum yearly charter hire. The Company receives preliminary profit sharing after six months. This distribution is recorded in deferred revenue (a liability) until the threshold is reached. Amounts receivable arising from
  profit sharing arrangements are accrued based on the actual results of the voyages recorded as of the reporting date.

Productson spot:TCE revenue increased $22.2 million during the three months and $44.6
  million for the six months ended June 30, 2005 compared to the same period in 2004, primarily from 546 and 1,026 more operating days in the three and six months ending June 30, 2005, resulting

34

---



from (1) the acquisition of six vessels during 2004 and 2005 and (2) 227 and 582 more operating days in the three and six months ending June 30, 2005, resulting from five vessels previously
operating on time charters that expired, operated in the spot market (three of which began new time charters in the second quarter of 2005).

Increases in vessel expense of $7.3 million for the three months and $13.1 million for the six months ended June 30, 2005, resulted from the ten vessels acquired in 2004 and 2005, in addition, costs increased
  approximately 46 percent for the three months and 38 percent for the six month periods in 2005, primarily relating to crew expense, insurance expense and stores (spare parts, lube oils). Depreciation expense also increased as a result of the vessels
  acquired.

Financial Condition and Capital Resources

Liquidity

Cash Flows

The following were the net changes in Operating, Investing and Financing Activities for the six months ended June 30, 2005 and June 30, 2004:



|                                                             | For the Six Months |        |      |  
|------------------------------------------------------------ | ------------------ | ------ | ---- | -
|                                                             | Ended June 30,     |        |      |  
|                                                             | 2005               |        | 2004 |  
|                                                             |                    |        |      |  
|(In millions)                                                |                    |        |      |  
|Condensed Cash Flows                                         |                    |        |      |  
|Provided (Used) by:                                          |                    |        |      |  
|Operating Activities                                         | $                  | 182.6  |      | $
|Investing Activities                                         |                    | (46.8  | )    |  
|Financing Activities                                         |                    | (143.4 | )    |  
|                                                             |                    |        |      |  
|Net (Decrease) Increase
        in Cash and Cash Equivalents |                    |        |      |  
|                                                             |                    | (7.6   | )    |  
|Cash and Cash Equivalents
        at the                     |                    |        |      |  
|Beginning of the Year                                        |                    | 41.8   |      |  
|                                                             |                    |        |      |  
|Cash and Cash Equivalents
        at the End of the Period   |                    |        |      |  
|                                                             | $                  | 34.2   |      | $
|                                                             |                    |        |      |  

Working Capital

The primary components
    of working capital are Cash and cash equivalents (Cash) and Traffic
    receivables offset by current liabilities. We supplement working capital
    requirements as needed with borrowings under our revolving credit facilities
    (see Long-Term
    Debt Obligations)
    and other borrowings. Cash of $34.2 million at June 30, 2005 decreased $7.6
    million from $41.8 million at December 31, 2004 as excess cash was primarily
    used to  reduce revolving credit facilities. Net cash provided by operating
    activities of $182.6 million for the six months ended June 30, 2005 increased $58.9
    million compared to $123.7 million for the six months ended June 30,
    2004, primarily  from the significantly higher net earnings of the Company
    (see Results of Operations) and the decrease in Traffic receivables
    for cash received during the first six months of 2005 on balances as of December
    31, 2004. Our working capital  decreased by $35.8 million from $38.8
    million at December 31, 2004 to $3.0 million at June 30, 2005. The decrease
    in working capital is the result of a decrease in Current Assets of $28.7
    million and an increase in Current  Liabilities of $7.1 million.  At
    June 30, 2005, Current Assets decreased primarily from decreases in Traffic
    receivables of $29.0 million and Cash of $7.6 million, partially
    offset by increases in

---

35



other current assets. At June 30, 2005, Current Liabilities increased primarily because of Accounts payable of $9.0 million, Accrued vessel and voyage expense of $1.7 million and
Deferred charter hire revenue of $1.9 million. Increases relating to certain current assets and liabilities are attributable to timing differences of cash receipts and disbursements and accruals for revenue and expenses in a particular period
and are not necessarily comparable between periods.

Our current intention, subject to the Companys financial condition, the amount of funds generated from operations, the level of capital expenditures and approval by our Board of
  Directors, is to continue to pay a regular quarterly dividend to holders of our common stock. It is also our intention to buy back shares opportunistically. As of June 30, 2005, the Company repurchased 3,512,500 common shares for an aggregate of
$65.2 million under a share repurchase program approved by the Board of Directors. See Acquisition and Retirement of Treasury Stock section below for more details.

As of June 30, 2005, the Company had total estimated capital commitments to acquire vessels of $164.4 million (see Capital Expenditures section). As of August 5, 2005, the Company has total
  estimated capital expenditures of $21.0 million (see Capital Expenditures section) for the remainder of 2005, which excludes the payments for delivery of two vessels aggregating $39.0 million in July and progress and final payments of
$104.4 million for five product carriers currently under construction to be delivered in 2006. We anticipate drydocking approximately six vessels in the remainder of 2005 which could approximate $2.1 million (see 2005 Drydock). During the
  first six months of 2005, we received proceeds from the disposal of two vessels of approximately $36.8 million.

Vessels, Construction in Progress (CIP)
  and Other Property

At June 30, 2005, Vessels, CIP and Other Property-net of $1,621.6 million increased a net of $17.1 million (including the increase in accumulated depreciation of $32.4 million from
  current period depreciation and amortization expense) from $1,604.5 million at December 31, 2004. Capital expenditures of approximately $82.7 million during the six months ended June 30, 2005 were primarily for the final payment for three
  newbuildings, installment payments for vessels under construction, capital improvements and capitalized interest. Vessels, net of accumulated depreciation, decreased approximately $33.6 million due to the sale of our two handysize non-double
  hull crude oil carriers in January 2005.

Cash used by investing activities was $46.8 million for the six months ended June 30, 2005, compared to cash used by investing activities of $51.5 million for the six months ended June
  30, 2004. During the 2005 period, $82.7 million was used for capital expenditures as follows:

- $63.0 million was used for the purchase of three product carrier newbuildings delivered,
- $15.9 million was paid for vessels under construction,
    and
- $3.8 million was used for capital expenditures for improvements to existing vessels and capitalized interest.

Long-Term Debt Obligations and Credit Arrangements

As of June 30, 2005, long-term debt obligations decreased $66.0 million to $874.4 million from $940.4 million at December 31, 2004. Long-term obligations at June 30, 2005, consisted
  of the following:

36

---



- Term loans of $394.9 million under bank mortgage agreements at a margin plus variable rates (1),(2) above the London Interbank Offering
Rate (LIBOR);
- Reducing revolving facilities of $55.0 million under bank mortgage agreements at a margin plus variable rates (1),(2)above LIBOR;
- 7.625% Unsecured Senior Notes due December 2013
    of $200.0 million and
- 2.875% Unsecured Convertible Senior Notes due December 2024 of $224.5 million.

> Note: As of June 30, 2005, the available undrawn amount under all revolving facilities the Company aggregated $628.8 million.

(1)Rates for the six months ended June 30, 2005 ranged from 2.77 percent to 4.875 percent (including margins). Rates for the six months ended June 30, 2004 ranged from
    1.97 percent to 3.63 percent (including margins).

(2)As of June 30, 2005, OMI had various interest rate swaps that fix notional amount  aggregating $112.1 million (not including $62.4 million that begins in
  February 2006) of variable rate debt ranging from 2.90 percent to 4.86 percent (excluding margins) with maturity dates ranging from October 2005 to July 2009.

OMI Corporation has
    two reducing revolving credit facilities collateralized by vessels. On May
    11, 2005, we amended and restated our $348 Facility with an original
    due date of July 27, 2006 and an available balance of $154.4 million
    with a ten year $320 million collateralized
  reducing revolving credit facility (the "$320 Facility"). Additionally,
  in April 2005, we repaid a $24 million term loan, with an original maturity
  of April  2009, on a vessel and included that and two new recently delivered
  product carriers as collateral under the modified $320 Facility. Borrowings
  under the $320 Facility bear interest at LIBOR plus a margin of 0.675%
  .

During the second quarter of 2005, seven of our term loans were amended to reduce the margin above LIBOR to 0.675%, modify certain covenants (consistent with loans entered into in 2005) and we
  extended two term loans by four years each to 2013 and 2015.

Cash used by financing activities was $143.4 million for the six months ended June 30, 2005, compared to cash provided by financing activities of $135.2 million for the six months ended
  June 30, 2004. During the six months ended June 30, 2005, we made $142.4 million in principal payments ($16.7 million were scheduled payments and $80.0 million were unscheduled prepayments on a revolving facility, $21.8 million in
  prepayments of a term loan now collateralized by the $320 Facility and $23.9 million payments for the aggregate repurchases of notes).

During the six months ended June 30, 2004, cash provided by financing activities of $135.2 million was primarily from proceeds received of $138.5 million from issuance of 12,204,000
  shares of common stock, in addition to proceeds from issuance of debt of $144.2 million. Proceeds from the issuance of common stock were used for the payment of vessels for the Athenian acquisition in July 2004.
  During the first six months of 2005, we paid cash of $65.2 million to repurchase 3,512,500 shares of common stock and approximately $12.8 million for the fourth quarter 2004 and the first quarter 2005 cash
  dividends paid to shareholders in January 2005 and April 2005, respectively.

Our debt to total capitalization (debt and stockholders equity) at June 30, 2005 was 52 percent and net debt (total debt less cash and cash equivalents) to total net capitalization (total
  capitalization less cash

37

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and cash equivalents) was 51 percent. As of August 5, 2005, we had approximately $647.6 million in available liquidity (including cash and undrawn available lines of credit). We expect to use cash from operations,
undrawn balances available to us through our revolving facilities, or committed bank debt to finance capital expenditures. Since we did not borrow all funds available under these two revolving facilities, there are currently no quarterly future
payments due in the next 12 months.

Unsecured Senior Notes and Subsidiary Guarantees:

On November 26, 2003, the Company issued $200.0 million of 7.625% Senior Notes (the "Notes") due December 1, 2013, with allowances for optional redemptions on or after December 1, 2008. The
  Notes accrue interest at the rate of 7.625% per year, payable semiannually in arrears on June 1 and December 1. The Notes are general unsecured, senior obligations of the Company. The Notes are guaranteed fully and unconditionally as well as jointly
  and severally by substantially all of the Companys current and future subsidiaries. Any subsidiaries of the Company, other than the subsidiary guarantors, are minor within the meaning of Rule 3-10 of Regulation S-X under the Securities Act.
  The Senior Notes are subject to certain covenants that among other things, limit the type and amount of additional indebtedness that may be incurred by the Company and the restricted subsidiaries and impose certain limitations on sales or transfers
  of assets and certain payments, the ability of the Company to enter into sale and leaseback transactions and certain mergers, consolidations and purchases of assets. The Company has no independent assets or operations within the meaning of Rule 3-10
  of Regulation S-X under the Securities Act.

Restrictive Covenants

All of our loan agreements contain restrictive covenants as to cash, net worth, maintenance of specified financial ratios and collateral values. As of June 30, 2005, we were in compliance with
  all covenants.

Interest-Rate Swaps

As of June 30, 2005, we had various interest rate swaps aggregating $174.5 million (which includes a notional amount of $62.4 million for an interest rate swap that commences in February 2006) on various debt
    tranches within a range of 2.9% to 4.86% expiring from October 2005 to August 2012. The Company pays fixed-rate interest amounts and receives floating-rate interest amounts based on three month LIBOR settings (for a term equal to the swaps
  reset periods). As of June 30, 2005, the Company has recorded an asset of $2.0 million and a liability of $1.8 million related to the fair market value of these hedges and a corresponding credit of $0.2 million to Other comprehensive
  income.

Forward Freight Agreements

At June 30, 2005, the FFAs had an aggregate notional value of $8.3 million, which is an aggregate of both long and short positions that extend to December 2005. The notional amount is
  based on a computation of the quantity of cargo (or freight) the contract specifies, the contract rate (based on a certain trade route) and a flat rate determined by the market on an annual basis. Each contract is mark to market for the specified
  cargo and trade route. The fair value of forward freight agreements is the estimated amount that the Company would receive or pay to terminate the agreements at the reporting date. As of June 30, 2005, the Company has recorded an asset of $0.7 million and a liability of $0.5 million related to the fair market value of these economic hedges. The Company has recorded the aggregate net realized and unrealized
  gain of

38

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$0.2 million and $0.6 million, for the three and six months ended June 30, 2005, respectively, which is classified as Other (under Other (Expense) Income) on the Condensed Consolidated Statements of Income for the
three and six months ended June 30, 2005. We had no FFAs during the three and six months ended June 30, 2004.

From July 1, 2005 to August 5, 2005, the Company committed to additional forward freight agreements with an aggregate notional amount of $6.1 million. These forward freight agreements
  expire by December 2005.

Contracted Time Charter Revenue

Currently, OMI has time charter contracts for 23 vessels, 10 with profit sharing arrangements. The contracted TC revenue schedule below does not include any estimates for profit sharing in the
  future periods; however, profit sharing of approximately $6.6 million earned during the first six months of 2005 is included. We have reduced future contracted revenue for any estimated off-hire days relating to drydocks.

The following table reflects our actual results of 2005 through the second quarter and current contracted time charter revenue through 2009:

| |                       | 2005   |  | 2006   |  | 2007   |  | 2008  |  | 2009  |    
| | --------------------- | ------ |  | ------ |  | ------ |  | ----- |  | ----- | ---
| |                       |        |  |        |  |        |  |       |  |       |    
| | (In millions)         |        |  |        |  |        |  |       |  |       |    
| | TC Revenue            | $125.7 |  | $135.6 |  | $125.3 |  | $95.1 |  | $60.7 |    
| | Number of Vessels (a) | 23     |  | 19     |  | 19     |  | 13    |  | 8     | (b)
| | Vessels with Profit   |        |  |        |  |        |  |       |  |       |    
| | Sharing (a)           | 10     |  | 8      |  | 7      |  | 7     |  | 4     |    



|(a) | Number of vessels at the end of each year assuming no additional extensions or new charters.                 
|--- | -------------------------------------------------------------------------------------------------------------
|   
|(b) | The remaining eight charters expire as follows: six charters will expire in 2010 and two will expire in 2012.
|   

We recognize profit sharing, if any, for each vessel with a profit sharing provision in the time charter contract when the minimum threshold is met, which is the minimum charter hire revenue.
Historically, we have recognized profit sharing on or about the anniversary of each time charter contract. The table below reflects the number of vessels profit sharing we expect to record by quarter:

39

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| |                | 2005 |  | 2006 |  | 2007 |  | 2008 |  | 2009 | 
| | -------------- | ---- |  | ---- |  | ---- |  | ---- |  | ---- | 
| |                |      |  |      |  |      |  |      |  |      | 
| | First Quarter  | 1    |  | 1    |  | 1    |  | 1    |  | 1    | 
| | Second Quarter | 1    |  | 5    |  | 5    |  | 4    |  | 4    | 
| | Third Quarter  | 3    |  | 4    |  | 2    |  | 2    |  | 2    | 
| | Fourth Quarter |     |  |     |  |     |  |     |  |     | 

Capital Expenditures

2005 Drydocks

OMI evaluates certain vessels to determine if a drydock, special survey, both a drydock combined with a special survey or a postponement is appropriate for each vessel. We have vessels
  inspected and evaluated regularly in anticipation of a drydock during the year. Currently, we anticipate drydocking six vessels in the remainder of 2005, two during the third quarter and four during the fourth quarter, for an estimated aggregate
  cost of $2.1 million. The vessels are expected to incur up to approximately 135 off-hire days.

The following is a breakdown of the estimated drydock cost (in millions) for the third and fourth quarters of 2005 with the allocation of off-hire days by vessel segment and charter type (spot
or TC) for product carriers:



|                 | Number of Days     |  | Number of Days      |     | Projected | 
|---------------- | ------------------ |  | ------------------- | --- | --------- | 
|                 | Third Qtr. of 2005 |  | Fourth Qtr. of 2005 |     | Costs     | 
|                 |                    |  |                     |     |           | 
|Crude Oil Fleet: |                    |  |                     |     |           | 
|Suezmax-spot     | n/a                |  |                     | 20  |           | 
|                
|Clean Fleet:     |                    |  |                     |     |           | 
|Products-TC      | 50                 |  |                     | 65  |           | 
|Products-Spot    | n/a                |  |                     | n/a |           | 
|                 |                    |  |                     |     |           | 
|Total            | 50                 |  |                     | 85  |           | 
|                 |                    |  |                     |     |           | 



Capital Expenditures for Vessel Acquisitions

At June 30, 2005, OMI had commitments to construct seven vessels; five handymax and two handysize product carriers with contract costs aggregating $248.5 million. As of June 30, 2005, payments of $83,851,000 have
  been made to the shipyard, $15.8 million of which was paid during the six months ended June 30, 2005. Bank financing or operating cash will provide the additional amounts to be paid.  OMI paid an aggregate of $39.0 million upon the delivery
  of two vessels in July 2005. The remaining five vessels will be delivered in 2006. One vessel delivered in July began a five year time charter.

As of June 30, 2005, future construction and delivery
    payments aggregated approximately $164.4 million, which includes the
    payments made in July 2005 for the delivery of two vessels mentioned above,
    (before financing) as follows (in millions):

40

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|Year                     |     | Payments |      
|------------------------ | --- | -------- | -----
|                         |     |          |      
|2005                     | (1) |          | $    
|2006                     |     |          |      
|                         |     |          |      
|Total Remaining Payments |     | $        | 164.4
|                         |     |          |      



(1) The principal amount of our $70.8 million term loan included $23.0 million financing, which was drawn down on in July 2005 for one of the vessels delivered.

Dividends

On May 19, 2005, the Board of Directors of OMI declared a dividend on its common stock or $0.08 per share to shareholders based on the number of common shares outstanding of 82,850,000 to
  holders of record on June 23, 2005. On July 13, 2005, $6.6 million was paid. The first quarter cash dividend of $6.8 million was paid on April 12, 2005.

Acquisition and Retirement of Treasury Stock

On December 14, 2004, the Board of Directors authorized the Company to repurchase from time to time up to 4,250,000 shares of common stock.  As of June 30, 2005, 737,500 shares remained under
  this authority.

During the second
    quarter of 2005, OMI purchased 3,200,900 shares of its common stock at an
    average price of $18.61 per share, aggregating $59.6 million. During
    the first quarter of  2005, OMI purchased 311,600 shares of its common stock
    at an average price of $18.14 per share, aggregating $5.7 million.
    An additional 294,800 shares and 396,600 shares were purchased in July and
    August 2005 at an average price of
$18.02 per share and $17.57 per share, respectively, aggregating $12.3 million.
All shares were retired upon purchase.

Restricted Stock

In 2003, the 2003 Stock Incentive Plan was approved. This plan provides for the granting of options to officers, employees, consultants and Directors for restricted shares and stock options.
  The total number of shares that may be awarded under the Plan are 4,000,000 of which 1,400,000 shares of stock may be awarded as restricted stock. We have not granted any stock options under this plan in 2003, 2004 or 2005. No additional restricted
  shares or options may be granted pursuant to any prior Company plan.

The Company has granted restricted stock to certain of its employees, executive officers and directors under the 2001 Restricted Stock Plan and the 2003 Stock Incentive Plan. The following
  table illustrates restricted stock awarded under these plans, restricted stock forfeited, vested, outstanding as of June 30, 2005 and the fair value at the grant date.

41

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|           |  | Restricted |  |           |     |  |          |   |  | Restricted  |  | Fair         
|---------- |  | ---------- |  | --------- | --- |  | -------- | - |  | ----------- |  | -------------
|           |  | Stock      |  |           |     |  |          |   |  | Stock       |  | Value at     
|Month      |  | Awarded    |  | Forfeited |     |  | Vested   |   |  | Outstanding |  | Grant Date(2)
|           |  |            |  |           |     |  |          |   |  |             |  |              
|           |  |            |  |           |     |  |          |   |  |             |  |              
|July 2001  |  | 900,000    |  | (75,000)  | (1) |  | (240,000 | ) |  | 585,000     |  | $            
|April 2002 |  | 20,000     |  |           |     |  | (5,000   | ) |  | 15,000      |  |              
|Sept. 2003 |  | 498,314    |  | (35,391)  | (1) |  | (5,287   | ) |  | 457,636     |  |              
|May 2004   |  | 21,000     |  |           |     |  |          |   |  | 21,000      |  |              
|June 2004  |  | 230,423    |  |           |     |  | (5,287   | ) |  | 225,136     |  |              
|Dec. 2004  |  | 36,500     |  |           |     |  |          |   |  | 36,500      |  |              
|Feb. 2005  |  | 30,000     |  | (20,000   | )   |  |          |   |  | 10,000      |  |              
|May 2005   |  | 592,847    |  |           |     |  |          |   |  | 592,847     |  |              
|           |  |            |  |           |     |  |          |   |  |             |  |              
|           |  | 2,329,084  |  | (130,391  | )   |  | (255,574 | ) |  | 1,943,119   |  | $            
|           |  |            |  |           |     |  |          |   |  |             |  |              



|(1) | These shares were forfeited in 2004.                    
|--- | --------------------------------------------------------
|   
|(2) | Months with more than one Grant Date have been averaged.
|   

Other Commitments and Contingencies

Please refer to the appropriate sections within the Financial Condition and Capital Resources section for other commitments disclosed (i.e. for capital expenditures relating to vessel purchases
  under current construction contracts see Capital Expenditures section.)

Athenian Arbitration

The Company terminated an agreement to acquire one of the Suezmax vessels it was to acquire in August 2004 from Athenian Sea Carriers Ltd., as delivery was not tendered in accordance with the
  requirements of the agreement. The seller disputes the matter, which is now in arbitration. If the Company is correct, it will be entitled to certain additional expenses it incurred and the increase in value, if any, of the vessel over the contract
  price. If the Company loses, it would most likely lose the amount of its deposit, approximately $6.4 million. This amount is included in the Condensed Consolidated Balance Sheets as a component of Other assets and deferred charges.

Other

OMI and certain subsidiaries are defendants in various actions arising from shipping operations. Such actions are covered by insurance or, in the opinion of management; the ultimate resolution
  of these matters will not have a material adverse effect on the financial condition, results of operations or cash flows of the Company.  Management accrues an estimate of expense for any matters that are considered probable of occurring based on
  the facts and circumstances.

Contractual Obligations

The following table
    lists contractual obligations by required payment periods as of June 30,
2005:

42

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|Payments Due By
    Period               
|-----------------------------------------
|                                         
|                                         
|                                         
|(in millions)                            
|Contractual Obligations                  
|Long Term Debt                          
|Interest on Fixed Rate
        Debt      
|Interest on Variable
        Rate Debt(1)
|Operating Leases(2)                      
|Purchase Obligations(3)                  

|(1) | Variable rate interest is based on a projected LIBOR rate of 4.00 percent plus applicable margins.                                                                                                                                                                                                                                                                               
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | Contractual obligations relating to future minimum
lease payments required by year, under operating leases subsequent to June 30,
2005, include leases for the chartering-in of vessels and the lease obligation
for the office space and are not included as liabilities on the Consolidated
Balance Sheet, since such payments relate to services to be provided in the future.
|   
|(3) | Purchase obligations relate to contracts to construct vessels. Future payments required are related to future services to be performed and are not reflected on the Consolidated Balance Sheet as
Liabilities.                                                                                                                                                                   
|   

Operating Leases

In February 2005,
    OMI agreed to time charter-in for seven years two new Suezmax vessels for
    the Gemini pool. One vessel was delivered in June 2005 and the other is scheduled
    for delivery in September 2005. OMI has options to extend the term of the
time charters and/or to acquire the vessels.

During April 2005, we signed a new lease for existing and additional office space at our corporate office in Stamford, Connecticut. The lease terms were extended from December 2006 to February
  2017, which increased our commitment from August 2005 to February 2017 by $14.4 million (see Contractual Obligationsabove).

Off-Balance-Sheet
Arrangements

As of June 30, 2005, we did not have any significant off-balance-sheet arrangements, as defined in Item 303(a) (4) (ii) of SEC Regulation S-K.
  Letters of Credit - In the normal course of business, we arranged for the issuance of a letter of credit by a bank for $1.2 million as collateral, as required by certain of our operations.

Effects of Inflation

The Company does not consider inflation to be a significant risk to the cost of doing business in the current or foreseeable future. Inflation has a moderate impact on operating expenses,
  drydocking expenses and corporate overhead.

43

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Newly Issued Accounting
Principles

In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, (SFAS 123(R)). This
  Statement requires companies to expense the estimated fair value of stock options and similar equity instruments issued to employees. Currently, companies are required to calculate the estimated fair value of these share-based payments and can elect
  to either include the estimated cost in earnings or disclose the pro forma effect in the footnotes to their financial statements. The fair value concepts were not changed significantly in FAS 123(R); however, in adopting this Standard, companies
  must choose among alternative valuation models and amortization assumptions. We do not expect the adoption of SFAS 123(R) to have a material adverse impact on our net income and earnings per share.

On April 14, 2005
    the U.S. Securities and Exchange Commission (the SEC) announced
    a deferral of the effective date of FAS 123(R) for calendar year companies
    until the beginning of  2006 and this pronouncement will apply to all awards
    granted and modified after the adoption date.

Forward Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities
  Exchange Act of 1934, as amended (the Exchange Act) and the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provided for under these sections. These statements may include words such as
believe, estimate, project, intend, expect, plan, anticipate, and similar expressions in connection with any discussion of the timing or nature of future operating
  or financial performance or other events. Our forward-looking statements include, without limitation:

- estimates of future earnings and cash flows and the sensitivity of earnings and cash flows to charter rates;
- estimates of when new vessels will be delivered by shipyards to the Company and when they may be chartered by customers;
- estimates of when vessels may be contracted for sale and delivered to buyers;
- estimates of when laws, regulations or commercial decisions may remove older vessels from markets or enhance the value or earnings of double hulled vessels;
- statements as to the projected development of the
    Companys strategy and how it may act to implement its strategy;
- estimates of future costs and other liabilities for certain environmental matters and investigations and the expectations concerning insurance coverage therefor;
- estimates relating to expectations in world economic activity, growth in the demand for crude oil and petroleum products and their affect upon tanker markets;
- estimates of the number of drydockings of vessels, their costs and the number of related off-hire days;
- estimates of capital requirements and the sources of the funding;
- statements regarding financial hedges and their affects.

44

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Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our
forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by those forward-looking statements. Such risks include,
but are not limited to, supply of tankers, demand for their use, world economic activity, breakdown of vessels and resultant time out of service as well as repair cost, availability and cost of insurance, governmental regulation, customer
preferences and availability and cost of financing.

All subsequent written and oral forward-looking statements attributable to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements. We disclaim any
  intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Interest Rate Risk

The Company is exposed
    to market risk from changes in interest rates, which could impact its results
    of operations, financial condition and cash flow. The Company manages its
    ratio of fixed to floating rate debt with the objective of achieving a mix
    that reflects management's interest rate outlook at various times. To manage
    this mix in a cost-effective manner, the Company, from time-to-time, enters
    into interest rate swap agreements, in which it agrees to exchange variable
    interest rates based on agreed upon notional amounts. The Company uses such
    derivative financial instruments as risk management tools and not for speculative
    or trading purposes. At June 30, 2005, the floating rate debt was $449.9
    million of the $874.4 million total debt, and we had interest rate swaps
    relating to the floating rate debt of $174.5 million (including $62.4
    million on interest rate swaps that commences in 2006). At December 31, 2004,
    the floating rate debt was $490.4 million, and we had interest rate swaps
    relating to the floating rate debt of $192.2 million (including $62.4
    million on interest rate swaps that commences in 2006). Based on the floating
    rate debt at June 30, 2005, a one-percentage point increase in the floating
interest rate would increase interest expense by $2.8 million per year.

The fair market value of the fixed rate debt on the balance sheet was $409.2 million as of June 30, 2005, and $454.6 million as of December 31, 2004, respectively.

Our policy is to manage interest rate risk through the use of interest rate derivatives based upon market conditions. We use interest rate swaps to manage the impact of interest rate changes on
  borrowings under our variable rate credit facilities. The interest rate swaps are entered into with a group of financial institutions with investment grade credit ratings, thereby minimizing the risk of credit loss. We have entered into certain
  interest rate derivative transactions with certain financial institutions to manage the impact of interest rate changes on variable rate debt.

45

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The table below provides information about interest rates, including our debt obligations and interest rate swaps at June 30, 2005. For debt obligations, the table presents principal cash flows
and related weighted average interest rates by expected maturity dates. For interest rate swaps, the table presents notional amounts and weighted average interest rates by expected contractual maturity dates.

|Expected Maturities(1)
|----------------------



|                               | Expected Maturities(1) |      
|------------------------------ | ---------------------- | -----
|                               | Balance as of          |      
|In millions                    | June 30, 2005          |      
|                               |                        |      
|Long-Term Debt:                |                        |      
|Fixed-Rate Debt                | $                      | 424.5
|Average Interest
        Rate  |                        |      
|Variable Rate
        Debt(2)  |                        | 449.8
|Interest Rate Swaps:(3)        |                        |      
|Contract Amount                |                        | 112.2
|Average Fixed
        Pay Rate |                        |      



|(1) | These are the expected maturities based on the balances as of June 30, 2005.                                    
|--- | ----------------------------------------------------------------------------------------------------------------
|   
|(2) | The interest rates for the variable rate debt is based on LIBOR contracts, which range from 30 days to one year.
|   
|(3) | Excludes $62.4m swap beginning in February 2006.                                                                
|   

Spot Market Rate Risk

We use written forward freight agreements (FFAs) as a hedge to protect against the change in spot market rates earned by some of our vessels. FFAs involve contracts to provide a
  fixed number of theoretical voyages at fixed rates thus hedging a portion of the Companys exposure to the spot charter market. At June 30, 2005, the FFAs had an aggregate notional value of $8.3 million and extend to December 2005. The fair
  value of forward freight agreements is the estimated amount that the Company would receive or pay to terminate the agreements at the reporting date. As of June 30, 2005, the
  Company has recorded an asset of $0.7 million and a liability of $0.5 million related to the fair market value of these economic hedges and a realize and unrealized gain of $0.2 million and $0.6 million for the three and six months
  ended June 30, 2005, respectively, which is classified as Other (under Other (Expense) Income) on the Condensed Consolidated Statements of Income.

From July 1, 2005
    to August 5, 2005, the Company committed to additional forward freight agreements
    with an aggregate notional amount of $6.1 million. These forward freight
    agreements  expire by December 2005.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), is recorded, summarized and processed within time periods specified in the SEC's rules and forms. As of the end of the period covered by this report (the "Evaluation Date"), we carried out an evaluation, under the supervision and
    with the participation of our management, including our chief executive officer and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the
    Exchange Act). Based upon this evaluation, our chief executive officer and our chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.

46

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There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonable likely to materially affect, our
internal controls over financial reporting.

47

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PART II:    OTHER INFORMATION

Item 1 - Legal Proceedings

Athenian Arbitration

The Company terminated an agreement to acquire one of the Suezmax vessels it was to acquire in August 2004 from Athenian Sea Carriers Ltd., as delivery was not tendered in accordance with the
  requirements of the agreement. The seller disputes the matter, which is now in arbitration. If the Company is correct, it will be entitled to certain additional expenses it incurred and the increase in value, if any, of the vessel over the contract
  price. If the Company loses, it would most likely lose the amount of its deposit, approximately $6.4 million. This amount is included in the Condensed Consolidated Balance Sheets as a component of Other assets and deferred charges.

Item 2 - Changes in Securities and Use of Proceeds

Stock Repurchases

In December 2004, the Board of Directors approved
the purchase of up to 4,250,000 of the outstanding shares of the Companys
common stock and did not impose an expiration date on such purchases. As of June
30, 2005, the Company had repurchased an aggregate of 3,513,000 shares and 737,000
shares remained available for repurchase under this authority (45,000 shares
remain after the July and August 2005 repurchases). The following table shows
the monthly 2005 stock repurchase activity:



|            |  |                  |  |                |       |                 | Total Number of  |              | Maximum Number 
|----------- |  | ---------------- |  | -------------- | ----- | --------------- | ---------------- | ------------ | ---------------
|            |  |                  |  |                |       |                 | Shares Purchased |              | of Shares that 
|            |  |                  |  |                |       |                 | As Part of       |              | May Yet Be     
|            |  |                  |  |                |       |                 | Publicly         |              | Purchased Under
|            |  | Total Number of  |  | Average Price  |       | Announced Plans |                  | the Plans or
|Period      |  | Shares Purchased |  | Paid per Share |       | or Program      |                  | Programs    
|            |  |                  |  |                |       |                 |                  |             
|March 2005  |  | 312,000          |  | $              | 18.14 |                 | 312,000          |              |                
|April 2005  |  | 1,148,000        |  |                | 18.57 |                 | 1,148,000        |              |                
|May 2005    |  | 1,819,000        |  |                | 18.54 |                 | 1,819,000        |              |                
|June 2005   |  | 234,000          |  |                | 19.33 |                 | 234,000          |              |                
|July 2005   |  | 295,000          |  |                | 18.02 |                 | 295,000          |              |                
|August 2005 |  | 397,000          |  |                | 17.57 |                 | 397,000          |              |                
|            |  |                  |  |                |       |                 |                  |              |                
|Total 2005  |  | 4,205,000        |  | $              | 18.43 |                 | 4,205,000        |              |                
|            |  |                  |  |                |       |                 |                  |              |                



Restricted Stock

During the six months ended June 30, 2005, the Company awarded 622,847 shares of restricted stock; 592,847 shares were awarded in May 2005 at fair value, average grant price of $19.00 per
  share and 30,000 shares were awarded in February 2005 (20,000 shares were forfeited during the same period) fair value, average grant price of $18.30 per share to a senior officers, directors and employees pursuant to the Companys 2003
  Stock Incentive Plan.

48

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Item 3 - Defaults upon Senior Securities

None.

Item 4  Submission of Matters to a Vote
  of Security Holders

The 2005 annual
    meeting of stockholders of the Company was held on May 19, 2005. The following
matters were voted upon at the meeting:

(i) Pursuant to OMI's Articles of Incorporation, as
amended, and By-Laws, the Board of Directors of OMI is divided into three classes.
The directors in each class hold office for staggered terms of three years. The
three Class I directors below whose terms expired in 2005 were re-elected for
new three year terms (expiring in 2007) at this Annual Meeting.

|                  | Number of Votes For |  | Withheld
|----------------- | ------------------- |  | --------
|                  |                     |  |         
|Robert L. Bugbee  | 79,395,377          |  |         
|James N. Hood     | 79,643,348          |  |         
|Philip J. Shapiro | 79,851,252          |  |         

Directors whose terms continue include Messrs. Craig H. Stevenson Jr. and James D. Woods, Class II directors whose terms expire in 2006 and Michael Klebanoff and Donald C. Trauscht, Class III
directors whose terms expire in 2007.

(ii) The Board of Directors appointed Deloitte & Touche LLP as Independent Registered Public Accounting Firm of OMI for the year 2005. Deloitte & Touche LLP were ratified as Independent Registered Public Accounting
Firm for 2005.

| | Number of Votes For |  | Against |  | Withheld
| | ------------------- |  | ------- |  | --------
| |                     |  |         |  |         
| | 79,894,476          |  | 164,653 |  | 86,916  

Item 5 - Other Information

None.

Item 6  Exhibit

|a.   | Exhibits                                                                                                                                                                                                                 
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|31.1 | OMI Corporations certification by the  Chief
Executive Officer on Form 10-Q for the period ending June 30, 2005 as adopted
pursuant to section 302 of THE SARBANES-OXLEY ACT OF 2002.                                   
|     |                                                                                                                                                                                                                          
|31.2 | OMI Corporations certification by theChief
Financial Officer on Form 10-Q for the period ending June 30, 2005 as adopted
pursuant to section 302 of THE SARBANES-OXLEY ACT OF 2002.                                     
|    
|32.1 | OMI Corporations certification by the Chief
Executive Officer on Form 10-Q for the period ending June 30, 2005 pursuant to
18 U.S.C. Section 1350, as adopted pursuant to section 906 of THE SARBANES-OXLEY
ACT OF 2002.
|    

49

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|32.2 | OMI Corporations certification by the Chief Financial Officer on Form 10-Q for the period ending June 30, 2005 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of THE SARBANES-OXLEY ACT OF
2002. | 
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|    

50

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|OMI CORPORATION
|---------------
|               
|(REGISTRANT)   



|      |                |  |     |                                  
|----- | -------------- |  | --- | ---------------------------------
|      |                |  |     |                                  
|Date: | August 9, 2005 |  | By: | /s/Craig H. Stevenson,
    Jr.   
|      |                |  |     |                                  
|      |                |  |     | Craig H. Stevenson,
    Jr.      
|      |                |  |     | Chairman of the
    Board and    
|      |                |  |     | Chief Executive
    Officer      
|      |                |  |     |                                  
|      |                |  |     |                                  
|      |                |  |     |                                  
|      |                |  |     |                                  
|Date: | August 9, 2005 |  | By: | /s/Kathleen C.
    Haines        
|      |                |  |     |                                  
|      |                |  |     | Kathleen
          C. Haines     
|      |                |  |     | Senior
          Vice President, 
|      |                |  |     | Chief
          Financial Officer
|      |                |  |     | and
          Treasurer          
|      |                |  |     |                                  



51

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