Being Filed Pursuant to Rule 901 (d) of Regulation S-T
================================================================================

                                    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 ended SEPTEMBER 30, 2001
                                               -------------------

                                       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                   (I.R.S. Employer
        incorporation or organization)                Identification No.)


          One Station Place, Stamford, CT                    06902
         ---------------------------------            -------------------
             (Address of principal                         (Zip Code)
              executive offices)


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    X        No
                                -------        -------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of NOVEMBER 14, 2001:
                    -----------------

            Common Stock, par value $0.50 per share 70,248,090 shares


<PAGE>

                        OMI CORPORATION AND SUBSIDIARIES
                                      INDEX


PART I: FINANCIAL INFORMATION                                              Page
                                                                           ----
ITEM 1. FINANCIAL STATEMENTS

        Condensed Consolidated Statements of
          Operations (unaudited) for the three
          and nine months ended September 30, 2001 and 2000 ..............    3

        Condensed Consolidated Balance Sheets-
          September 30, 2001 (unaudited) and December 31, 2000 ...........    4

        Condensed Consolidated Statements of Changes in
          Stockholders' Equity for the year ended
          December 31, 2000 and the (unaudited)
          nine months ended September 30, 2001 ...........................    5

        Condensed Consolidated Statements of Cash Flows (unaudited)
          for the nine months ended September 30, 2001 and 2000 ..........    6

        Notes to Condensed Consolidated Financial
          Statements (unaudited) .........................................    7

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND RESULTS OF OPERATIONS ....................   15

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
        MARKET RISK ......................................................   33

PART II: OTHER INFORMATION ...............................................   35

SIGNATURES ...............................................................   36


                                       2


<PAGE>

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

<TABLE>
<CAPTION>

                                         FOR THE THREE MONTHS     FOR THE NINE MONTHS
                                          ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,
                                       ----------------------    ----------------------
                                          2001       2000           2001         2000
                                       ---------    ---------    ---------    ---------
<S>                                    <C>          <C>          <C>          <C>
Revenues ...........................   $  45,203    $  54,855    $ 161,083    $ 122,055
                                       ---------    ---------    ---------    ---------
Operating Expense:
   Vessel and voyage ...............      19,445       14,165       51,696       39,481
   Charter hire expense ............       1,641        4,027        6,192       11,578
   Depreciation and amortization ...       8,311        4,558       23,132       12,100
   General and administration ......       3,057        2,817        8,902        8,528
   (Gain)loss on disposal/write down
     of vessels-net ................         (41)       1,432      (19,550)      14,051
                                       ---------    ---------    ---------    ---------
     Total Operating Expense .......      32,413       26,999       70,372       85,738
                                       ---------    ---------    ---------    ---------
Operating Income ...................      12,790       27,856       90,711       36,317
                                       ---------    ---------    ---------    ---------
Other(Expense)Income:
   Interest expense ................      (4,455)      (7,817)     (15,678)     (20,404)
   Interest income .................         413          743        1,696        2,094
   Loss on disposal/write down of
     joint venture investments .....      (1,117)        --         (1,617)        (536)
   Other-net .......................         (67)         588          255        2,213
                                       ---------    ---------    ---------    ---------
     Net Other Expense .............      (5,226)      (6,486)     (15,344)     (16,633)
                                       ---------    ---------    ---------    ---------
Income before Equity in
   Operations of Joint Ventures ....       7,564       21,370       75,367       19,684
Equity in operations of joint
   ventures ........................        --          1,005          220        2,049
                                       ---------    ---------    ---------    ---------
Net Income .........................   $   7,564    $  22,375    $  75,587    $  21,733
                                       =========    =========    =========    =========
Basic Earnings Per Share ...........   $    0.11    $    0.38    $    1.13    $    0.39
Diluted Earnings Per Share .........   $    0.11    $    0.38    $    1.13    $    0.39

</TABLE>

           See notes to condensed consolidated financial statements.

                                       3


<PAGE>

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

                                                    SEPTEMBER 30, DECEMBER 31,
                                                        2001        2000
                                                    ------------- ------------
                                                    (UNAUDITED)
ASSETS
Current Assets:
   Cash, including cash equivalents:
     2001-$26,239; 2000-$30,098 .................   $ 29,587      $ 35,328
   Receivables:
     Traffic receivables, net of allowance for
       doubtful accounts of $1,460 in 2001 and
       $1,538 in 2000 ...........................     19,489        22,398
     Other ......................................      6,751         2,775
   Other prepaid expenses and current assets ....     10,626         5,676
                                                    --------      --------
         Total Current Assets ...................     66,453        66,177
                                                    --------      --------
Vessels and other property, at cost .............    741,538       534,814
Construction in progress ........................     86,764         2,905
                                                    --------      --------
   Total vessels and other property .............    828,302       537,719
Less accumulated depreciation ...................     70,687        50,304
                                                    --------      --------
         Vessels and Other Property-Net .........    757,615       487,415
                                                    --------      --------
Prepaid drydock expense .........................      4,968           374
Restricted cash .................................     12,006        10,649
Investments in, and advances to joint ventures ..        872         5,610
Long-term notes receivable ......................        150         6,887
Other assets and deferred charges ...............     14,328        14,392
                                                    --------      --------
         Total Assets ...........................   $856,392      $591,504
                                                    ========      ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable .............................   $  5,424      $  6,349
   Accrued liabilities:
     Voyage and vessel ..........................      6,029         1,370
     Interest ...................................      1,429         1,387
     Other ......................................      6,758         3,562
   Deferred charter hire ........................      2,542         1,690
   Deferred gain on sale of vessel ..............       --           2,738
   Current portion of long-term debt ............     56,715        40,577
                                                    --------      --------
         Total Current Liabilities ..............     78,897        57,673
                                                    --------      --------
   Long-term debt ...............................    375,935       275,986
   Other liabilities ............................      6,258         3,142
   Stockholders' equity .........................    395,302       254,703
                                                    --------      --------
         Total Liabilities & Stockholders' Equity   $856,392      $591,504
                                                    ========      ========

            See notes to condensed consolidated financial statements



                                       4

<PAGE>


<TABLE>

                                                OMI CORPORATION AND SUBSIDIARIES
                                 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                       FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE (UNAUDITED)
                                              NINE MONTHS ENDED SEPTEMBER 30, 2001
                                                          (IN THOUSANDS)
<CAPTION>

                                                                                        Unearned              Accumulated
                                                                                      Compensation Retained      Other
                                        Common Stock    Capital  Treasury  Deferred    Restricted  Earnings   Comprehensive
                                       Shares  Amount   Surplus    Stock  Compensation    Stock   (Deficit)   Income (Loss)
                                       ------  ------   -------  -------- ------------ ---------- ----------  -------------
<S>                                    <C>     <C>      <C>       <C>      <C>          <C>         <C>         <C>
Balance as of January 1, 2000 ........ 49,394  $24,697  $218,869  $(8,834)    --                    $(62,966)       --
Comprehensive income (loss):
    Net income ......................                                                                 53,085
    Unrealized loss on securities ...                                                                          $  (258)
Comprehensive income .................
Issuance of common stock ............. 11,710    5,855    20,984
Exercise of stock options ............    320      160     1,268
Issuance of stock options ............                     2,324           $(1,313)
Amortization of deferred
  compensation .......................                                         832
                                       ------  -------  --------  -------  -------                  --------    -------
Balance at December 31, 2000 ......... 61,424   30,712   243,445   (8,834)    (481)                   (9,881)      (258)

Comprehensive income (loss):
     Net income ......................                                                                75,587
     Unrealized loss on securities                                                                                 (613)
     Other comprehensive income (loss)                                                                           (2,906)

Comprehensive income

Issuance of common stock .............  9,831    4,916    62,899
Exercise of stock options ............    121       60       401
Issuance of stock options ............                      (481)              481
Issuance of restricted stock .........    900      450     4,671                           (5,121)
Retirement of treasury stock ......... (2,028)  (1,014)   (7,820)   8,834
Amortization of restricted
     stock ...........................                                                        255
                                       ------  -------  --------  -------  -------      ---------   --------    -------
Balance at September 30, 2001
     (unaudited) ..................... 70,248  $35,124  $303,115  $  --    $  --        $  (4,866)  $ 65,706    $(3,777)
                                       ======  =======  ========  =======  =======      =========   ========    =======

</TABLE>



                                                          Total
                                        Comprehensive  Stockholders'
                                         Income (Loss)    Equity
                                        ------------- -------------
Balance as of January 1, 2000 ........                   $171,766
Comprehensive income (loss):
    Net income ......................    $53,085           53,085
     Unrealized loss on securities ...      (258)            (258)
                                         -------
Comprehensive income .................   $52,827
                                         =======
Issuance of common stock .............                     26,839
Exercise of stock options ............                      1,428
Issuance of stock options ............                      1,011
Amortization of deferred
  compensation .......................                        832
                                                         --------
Balance at December 31, 2000 .........                    254,703

Comprehensive income (loss):
     Net income ......................   $75,587           75,587
     Unrealized loss on securities ...      (613)            (613)
     Other comprehensive income (loss)    (2,906)          (2,906)
                                         -------
Comprehensive income .................   $72,068
                                         =======
Issuance of common stock .............                     67,815
Exercise of stock options ............                        461
Issuance of stock options ............                        --
Issuance of restricted stock .........                        --
Retirement of treasury stock .........                        --
Amortization of restricted
     stock ...........................                        255
                                                          --------
Balance at September 30, 2001
     (unaudited) .....................                    $395,302
                                                          ========


            See notes to condensed consolidated financial statements


                                       5


<PAGE>


<TABLE>
<CAPTION>

                        OMI CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
                                                                          FOR THE NINE MONTHS
                                                                           ENDED SEPTEMBER 30,
                                                                           2001         2000
                                                                        ---------    ---------
<S>                                                                     <C>          <C>
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:
Net income ..........................................................   $  75,587    $  21,733
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation and amortization ..................................      23,132       12,100
     Amortization of lease reserve ..................................        (231)      (2,076)
     Amortization of deferred gain on sale of vessel ................        (788)      (2,364)
     Amortization of restricted stock awards ........................         255         --
     (Gain)/loss on disposal and write down of vessels ..............     (19,550)      14,051
     Loss on disposal/write down of investments .....................       1,617          536
     Equity in operations of joint ventures-net of dividends received       2,274         (841)
   Changes in assets and liabilities:
     Decrease (increase) in receivables and other
       current assets ...............................................       5,554       (5,379)
     Advances to joint ventures and affiliates-net ..................         (22)        (601)
     Decrease (increase)in other assets and deferred charges ........         116         (523)
     Increase (decrease) in accounts payable and accrued
       liabilities ..................................................       6,315       (8,931)
     Increase (decrease) in other liabilities .......................         210          (74)
     Other ..........................................................        (857)         517
                                                                        ---------    ---------
Net cash provided by operating activities ...........................      93,612       28,148
                                                                        ---------    ---------
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES:
     Additions to vessels and other property ........................    (277,072)    (105,562)
     Proceeds from disposition of vessels ...........................      77,282       46,888
     Proceeds from disposition of a joint venture ...................        --          2,657
     Payments for drydocking ........................................      (5,244)        --
     Payments for the purchase of a joint venture
      investment-net ................................................        --         (4,809)
     Proceeds from investments in joint ventures ....................       1,076         --
     Proceeds from notes receivable .................................       1,187        5,712
     Payments for investments .......................................      (6,357)      (2,436)
     Escrow of funds ................................................      (1,000)        (750)
                                                                        ---------    ---------
Net cash used by investing activities ...............................    (210,128)     (58,300)
                                                                        ---------    ---------
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES:
     Proceeds on debt refinanced ....................................        --        264,500
     Payments on debt refinanced ....................................        --       (257,850)
     Proceeds from issuance of debt .................................     213,391       50,000
     Payments on debt ...............................................     (97,304)     (24,612)
     Proceeds (payments) from issuance of common stock-net ..........      (1,410)      18,656
     Payments for debt issue costs ..................................      (3,901)      (4,298)
                                                                        ---------    ---------
Net cash provided by financing activities ...........................     110,776       46,396
                                                                        ---------    ---------

Net (decrease) increase in cash and cash equivalents ................      (5,740)      16,244
Cash and cash equivalents at beginning of year ......................      35,327        7,381
                                                                         --------    ---------
Cash and cash equivalents at end of period ..........................   $  29,587    $  23,625
                                                                        =========    =========
</TABLE>


           See notes to condensed consolidated financial statements.


                                       6

<PAGE>


                        OMI CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
NOTE 1

     The condensed consolidated interim financial statements of OMI Corporation
("OMI" or the "Company") are unaudited and reflect all adjustments (consisting
only of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the financial position and operating
results for the interim periods. 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, 2000. The results of operations for the nine
months ended September 30, 2001, are not necessarily indicative of the results
for the entire fiscal year ending December 31, 2001.

     The Company is a bulk shipping company incorporated on January 9, 1998 in
the Republic of the Marshall Islands and is the successor company to Universal
Bulk Carriers, Inc., a company which was a wholly-owned subsidiary of OMI Corp.
(renamed Marine Transport Corporation) until June 17, 1998. OMI provides
seaborne transportation services primarily of crude oil and refined petroleum
products. The Company trades under the symbol OMM on the New York Stock
Exchange.

     RECLASSIFICATIONS- Certain reclassifications have been made to the prior
year financial statements to conform to the 2001 presentation. These
reclassifications had no effect on net income as previously reported.

     DERIVATIVES AND HEDGING ACTIVITIES- The Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 133 ("SFAS 133") as
amended, "Accounting for Derivative Instruments and Hedging Activities", which
is effective for all fiscal years beginning after June 15, 2000. The Company
adopted SFAS 133 effective January 1, 2001.

     All derivatives are recognized on the balance sheet at their fair value. 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). The Company does not have
foreign-currency fair-value or cash-flow hedges ("foreign currency" hedge) or a
hedge of a net investment in a foreign operation.

     The Company is exposed to market risk, such as changes in interest rates.
To manage the volatility relating to this exposure, the Company selectively
enters into derivative transactions pursuant to the Company's policies for
hedging practices. Designation is performed on a specific exposure basis to
support hedge accounting. The changes in fair value of these hedging instruments
are offset in part or in whole by corresponding changes in the fair value or
cash flows of the underlying exposures being hedged. The Company does not hold
or issue derivative financial instruments for trading purposes.

     As of September 30, 2001, the Company has interest rate swaps to
effectively convert a portion of its debt from a floating to fixed rate basis,
which swaps are designated and qualify as cash flow hedges. OMI's swaps are 100%
effective (no ineffectiveness) under conditions required under SFAS 133.
Accordingly, no gains or losses were recorded in income relative to the
Company's debt and interest rate swaps.

                                       7


<PAGE>

     NEWLY ISSUED ACCOUNTING STANDARDS TO DATE-- During 2001, the Financial
Accounting Standards Board ("FASB") issued four statements, which are summarized
as follows:

     SFAS 141, "Business Combinations" addresses financial accounting and
reporting for business combinations. It requires all business combinations
covered by the scope of the statement to be accounted for using the purchase
method. It is effective for business combinations initiated after June 30, 2001
and business combinations completed July 1, 2001 and later which use the
purchase method of accounting. The Company has no pending business combinations
which would be impacted by this statement. The requirements of this statement
would need to be considered in any business combination contemplated in the
future.

     SFAS 142, "Goodwill and Other Intangible Assets" addresses financial
accounting and reporting for goodwill and other intangible assets. SFAS No. 142
discontinues the practice of amortizing goodwill and indefinite lived intangible
assets and initiates an annual review for impairment. Impairment would be
examined more frequently if certain indicators were encountered. Intangible
assets with a determinable useful life will continue to be amortized over that
period. The amortization provisions shall be applied to fiscal years beginning
after December 15, 2001 to all goodwill and intangible assets except that, these
provisions presently apply to goodwill and intangible assets acquired after June
30, 2001. The Company did not have goodwill or intangible assets on the books as
of September 30, 2001 and therefore expects no impact on the financial
statements.

     SFAS 143, "Accounting for Asset Retirement Obligations" was issued in June
2001. This statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. This statement is effective for financial
statements issued for fiscal years beginning after June 15, 2002. The Company
has not yet determined the impact, if any, that the adoption of this statement
will have on the Company's results of operations or financial position.

     SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
was issued in October 2001. SFAS 144 replaces FASB Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." SFAS 144 requires that those long-lived assets be measured at
the lower of carrying amount or fair value less cost to sell, whether reported
in continuing operations or in discontinued operations. Therefore, discontinued
operations will no longer be measured at net realizable value or include amounts
for operating losses that have not yet occurred.

     SFAS 144 also broadens the reporting of discontinued operations to include
all components of an entity with operations that can be distinguished from the
rest of the entity and that will be eliminated from the ongoing operations of
the entity in a disposal transaction. The provisions of SFAS 144 are effective
for financial statements issued for fiscal years beginning after December 15,
2001 and are to be applied prospectively. The Company has not yet determined the
impact, if any, that the adoption of this statement will have on the Company's
results of operations or financial position.

                                       8


<PAGE>



NOTE 2 - CREDIT FACILITIES AND LOAN AGREEMENTS

As of September 30, 2001 the Company's debt and credit arrangements consisted of
the following:

(in thousands)
Loans under bank credit agreements at a margin plus
  variable rates of the London Interbank Offering
  Rate ("LIBOR")(1) (2)............................................. $  431,021
7.00% Convertible Note due 2004......................................     1,629
                                                                     ----------
       Total........................................................    432,650
       Less current portion of long-term debt.......................     56,715
                                                                     ----------
Long-term debt    .................................................. $  375,935
                                                                     ==========

(1) Rates at September 30, 2001 ranged from 4.31 percent to 6.5625 percent
(including margins).

(2) OMI has secured interest rate swaps that fix $115,000,000 of variable rate
debt at 4.86% for three years and $60,000,000 at 4.77% for four years.

In August 2001, OMI repurchased $4,357,000 of its 10.25% unsecured Senior Notes
outstanding at par.

2001 Financing

     On July 27, 2001, OMI closed on a six year $348,000,000 reducing revolving
credit facility (the "Facility"). The Facility has been and will be used to
provide up to 65 percent financing of (i) pre-delivery installments, and final
payments at delivery on eleven new building vessels with deliveries scheduled
through the first quarter of 2003 (ii) acquisition financing and refinancing of
four secondhand vessels purchased in the first half of 2001 (iii) the exercise
of the $45,000,000 purchase option on the COLUMBIA (following its sale and lease
back to OMI for three years in 1999) and (iv) for general corporate purposes up
to the applicable available amount under the Facility. The Facility includes
interest rate margins similar to other credit facilities of the Company based on
a pricing ratio grid (currently 125 basis points over LIBOR) and contains
similar covenants. The Company will pay an additional margin of 25 basis points
up to September 30, 2002, which will then be reduced to 12.5 basis points from
October 1, 2002 to March 31, 2003. The availability under the Facility reduces
quarterly based on a 17-year amortization schedule from delivery of the vessels
until September 2003, and thereafter $7,460,000 per quarter until July 27, 2007
at which time the entire Facility is due. At September 30, 2001, the amount
drawn under this Facility was $116,391,000.

Other 2001 Financing

     In January 2001 the Company obtained a $35,000,000 term loan to partially
finance the delivery of a Suezmax newbuilding (see Note 5). The loan is to be
repaid in 16 consecutive semi-annual installments, the first four in the amount
of $1,670,000 each, and the next 12 in the amount of $1,170,000 each, with a
balloon payment in the amount of $14,280,000 due and payable together with the
last installment. The outstanding balance of the loan bears interest at LIBOR
plus an applicable margin based on OMI's ratio of consolidated funded debt to
consolidated adjusted EBITDA on a trailing four quarter basis. At September 30,
2001, the outstanding loan balance was $33,330,000 and applicable margin was
1.25%.

     On March 1, 2001 the Company obtained a credit facility of $23,000,000 to
finance the purchase of three product carriers acquired in February and March
2001 (see Note 5). The loan was repaid on August 13, 2001 and two of

                                       9

<PAGE>


the three vessels (one vessel was sold in May 2001, see Note 6) was refinanced
as part of the Facility described above.

     In April 2001 the Company obtained a $19,000,000 term loan to partially
finance the purchase of a 2000 built product carrier delivered on April 25,
2001. The loan is to be repaid in 14 consecutive semi-annual installments, the
first four in the amount of $1,250,000 each, and the next 10 in the amount of
$750,000 each, with a balloon payment in the amount of $6,500,000 due and
payable together with the last installment. The outstanding balance of the loan
bears interest at LIBOR plus an applicable margin based on OMI's ratio of
consolidated funded debt to consolidated adjusted EBITDA on a trailing four
quarter basis. At September 30, 2001, the outstanding loan balance was
$19,000,000 and applicable margin was 1.25%.

     In September 2001 the Company obtained an eight year $40,000,000 term loan
to partially finance the purchase of two product carrier newbuildings, one which
was delivered on September 10, 2001 and the other on October 12, 2001. The loan
is split into two $20,000,000 tranches. The loan for each tranche is to be
repaid beginning three months after the final drawdown in 32 consecutive
quarterly installments, the first 20 in the amount of $450,000 each and the next
12 in the amount of $350,000 each, with a balloon payment in the amount of
$6,800,000 due and payable together with the last installment. The outstanding
balance of the loan bears interest at LIBOR plus an applicable margin will be
based on OMI's ratio of consolidated funded debt to consolidated adjusted EBITDA
on a trailing four quarter basis, with the exception of the first six months
which is fixed at 1.25%.

Restrictive Covenants

     All loan agreements contain restrictive covenants as to working capital,
net worth, maintenance of specified financial ratios and collateral values. They
restrict the Company's ability to make certain payments, such as dividends and
repurchase of its stock. Pursuant to the loan agreements liens against specific
assets were granted and other liens against those assets were prohibited. As of
September 30, 2001, the Company was in compliance with its covenants.

Interest Rate Swaps

     As of September 30, 2001, the Company has two interest-rate swap
transactions with notional amounts of $60,000,000 and $115,000,000 in which the
Company will pay fixed-rate interest payments, at 4.77% and 4.86%, respectively,
and will receive floating-rate interest amounts based on three month LIBOR
settings (for a term equal to the swaps' reset periods). These agreements have
maturity dates of October 2004 and October 2005. These transactions have been
designated as cash flow hedges and as of September 30, 2001, the Company has
recorded a liability of $2,906,000 related to the fair market value of these
hedges and a charge correspondingly to Other Comprehensive Income.

NOTE 3 - 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 all
dilutive stock options and convertible debentures using the treasury stock
method.

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


                                       10


<PAGE>

                                      FOR THE THREE      FOR THE NINE
                                       MONTHS ENDED       MONTHS ENDED
                                      SEPTEMBER 30,      SEPTEMBER 30,
                                     ----------------------------------
                                      2001     2000     2001      2000
                                     ------   ------   ------    ------
(in thousands, except per share
  amounts)

BASIC EARNINGS PER SHARE:
     Weighted average common shares
         outstanding ..............   70,244   59,211   66,597   55,749
                                      ======   ======   ======   ======
DILUTED EARNINGS PER SHARE:
     Weighted average common shares
         outstanding ..............   70,244   59,211   66,597   55,749
     Options ......................      260      309      458      240
     7% Convertible notes .........     --       --       --       --
                                      ------   ------   ------   ------
 Weighted average common shares
         Outstanding-diluted ......   70,504   59,520   67,055   55,989
                                      ======   ======   ======   ======
BASIC EARNINGS PER SHARE:
     Net income ...................   $ 0.11   $ 0.38   $ 1.13   $ 0.39
                                      ======   ======   ======   ======
DILUTED EARNINGS PER SHARE:
     Net income ...................   $ 0.11   $ 0.38   $ 1.13   $ 0.39
                                      ======   ======   ======   ======

     The effect of the assumed conversion of the 7% convertible note due 2004
was not included in the computation of diluted earnings per share for the three
and nine months ended September 30, 2001 and 2000 because the average price of
OMI's stock was less than the stock conversion price of $7.375.

NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION

     During the nine months ended September 30, 2001 and 2000 interest paid
totaled approximately $17,058,000 and $17,764,000, respectively.

     During April and June 2001, OMI issued in aggregate 3,125,000 shares of its
common stock at $8.00 per share for a total value of $25,000,000 as partial
payment for the acquisitions of a product carrier on April 25, 2001 and two
crude oil tankers on June 21, 2001 (see Note 5).

     During February and March 2001, the Company issued approximately 6,699,000
shares at $7.00 per share for a total of value of $46,893,000 (not including
fees paid in cash) as partial payment for the acquisitions of three vessels and
for two vessels under construction (see Notes 5 and 8).

     During February 2000, OMI issued 599,998 shares at $2.50 per share for a
total value of $1,500,000 as partial payment for the acquisition of a Suezmax
newbuilding, which was acquired in March 2000.

     During March 2001 and March 2000, OMI issued, respectively, a total of
6,154 shares at $6.50 to two directors and 26,667 shares at $2.25 to three
directors in lieu of their annual fees of $20,000 for each director.

NOTE 5 - ACQUISITIONS

     During January 2001, a new Suezmax vessel, the SOMJIN, was delivered from
the shipyard. Total capitalized costs aggregated approximately $61,473,000.


                                       11

<PAGE>


     During February and March 2001, OMI acquired two 1990 built and one 1989
built product carriers for an aggregate contract price of approximately
$41,250,000. OMI issued an aggregate of 2,650,000 shares of common stock during
February and March 2001 as partial payment for the vessels (see Notes 4 and 6).

     During April 2001, OMI acquired one 35,000 deadweight metric ton ("dwt")
product carrier built in 2000 for $29,000,000. OMI issued 1,125,000 shares (see
Note 4) of its common stock to the seller at $8.00 per. Since the average of the
closing prices for 120 trading days following registration was less than $8.00
per share, OMI was obligated to pay $2,250,000 in October 2001. The vessel began
a three-year time charter upon delivery.

     During June 2001, OMI purchased two 36,000 dwt crude oil tankers built in
1993 for $21,750,000 each. The vessels are on time charters that continue until
May and July 2005. The charterer has three one-year options. The aggregate
purchase price of $43,500,000 was paid in cash and stock. The Company issued
2,000,000 shares (see Note 4) of common stock at $8.00 per share, with no price
guarantee, as partial payment.

     During September 2001, OMI purchased three product carriers (35,000-37,000
dwt) with approximate capitalized costs aggregating $92,361,000. Two of the
vessels began three-year time charters and one vessel began a five-year time
charter upon delivery.

     On October 12, 2001, a 2000 built 35,000 dwt product carrier contracted for
in September 2001, was delivered for an approximate cost of $30,000,000. The
vessel began a five-year time charter upon delivery.

NOTE 6 - DISPOSAL OF VESSELS

     In May 2001, OMI sold one of the 1990 built product carriers purchased in
March 2001 (see Note 5) for $14,800,000 and recognized a gain on the sale of
$637,000.

     During June 2001, the Company sold a 2000 built Suezmax tanker for
$64,000,000 and used part of the proceeds to repay debt of $37,700,000. OMI
recognized a gain of $17,473,000 from the sale of the vessel.

NOTE 7 - FINANCIAL INFORMATION RELATING TO SEGMENTS

     The Company organizes its business principally into two operating segments.
These segments and their respective operations are as follows:

     Crude Oil Tanker Fleet - includes vessels that normally carry crude oil and
"dirty" products. This fleet includes four sizes of vessels, Suezmax, ULCC,
Panamax and handysize (36,000 dwt) tankers (the 2000 results include the aframax
vessel sold in March 2000).

     Product Carrier Fleet - includes vessels that normally carry refined
petroleum products such as gasoline, naphtha and kerosene. This fleet includes
two sizes of vessels, handymax and handysize vessels.

                                       12

<PAGE>


     The following is a summary by major operating segments:

<TABLE>
<CAPTION>

                                                                       FOR THE THREE MONTHS       FOR THE NINE MONTHS
                                                                         ENDED SEPTEMBER 30,       ENDED SEPTEMBER 30,
                                                                      ----------------------    ----------------------
                                                                         2001        2000         2001          2000
                                                                      ---------    ---------    ---------    ---------
<S>                                                                   <C>          <C>          <C>          <C>
(in thousands)
TOTAL REVENUES:
     Crude Oil Tanker Fleet .......................................   $  24,694    $  44,243    $ 102,709    $  92,284
     Product Carrier Fleet ........................................      20,440       10,612       58,079       29,771
     Other ........................................................          69         --            295         --
                                                                      ---------    ---------    ---------    ---------
         Total ....................................................   $  45,203    $  54,855    $ 161,083    $ 122,055
                                                                      =========    =========    =========    =========
TIME CHARTER EQUIVALENT REVENUES: (1)
     Crude Oil Tanker Fleet .......................................   $  19,342    $  36,941    $  87,288    $  74,031
     Product Carrier Fleet ........................................      17,601       10,650       51,635       29,805
                                                                      ---------    ---------    ---------    ---------
         Total ....................................................   $  36,943    $  47,591    $ 138,923    $ 103,836
                                                                      =========    =========    =========    =========
INCOME BEFORE EQUITY IN OPERATIONS
 OF JOINT VENTURES:
     Crude Oil Tanker Fleet (2) ...................................  $    4,989    $  21,607    $  62,121    $  34,491
     Product Carrier Fleet (2) ....................................       6,414        2,537       21,012       (6,281)
     General and administrative expense
      not allocated to vessels ....................................      (2,209)      (2,071)      (5,923)      (6,524)
     Other ........................................................      (1,630)        (703)      (1,843)      (2,002)
                                                                      ---------    ---------    ---------    ---------
         Total ....................................................   $   7,564    $  21,370    $  75,367    $  19,684
                                                                      =========    =========    =========    =========

</TABLE>

(1)  The Company uses time charter equivalent revenue, which is voyage revenue
     less voyage expenses, 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.

(2)  Operating income includes gain (loss) on disposal/write down of vessels-net
     see below:

                           FOR THE THREE MONTHS    FOR THE NINE MONTHS
                            ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,
                           --------------------    --------------------
                              2001       2000        2001       2000
                            --------   --------    --------   --------
(in thousands)
Crude Oil Tanker Fleet ..   $   --     $   --      $ 18,913   $   --
Product Carrier Fleet ...         41     (1,432)        637    (14,051)
                            --------   --------    --------   --------
Gain (loss) on disposal/
 write down of vessels-net  $     41   $ (1,432)   $ 19,550   $(14,051)
                            ========   ========    ========   ========

     During the three and nine months ended September 30, 2001 and 2000,
mortgage debt of OMI and its related interest expense have been allocated to the
above segments based upon the relative value of the vessels collateralizing the
debt.

NOTE 8 - OTHER COMMITMENTS

     During September 2001, the Company agreed to acquire two 37,000 dwt product
carriers currently under construction for approximately $30,000,000 each. The
first vessel will be delivered in December 2001 and the second in March 2002.
OMI has secured financing of $22,000,000 for each vessel upon delivery. Both
vessels have been committed to three-year time charters.

     During June 2001, OMI agreed to have constructed two 70,100 dwt product
carriers for $36,718,000 each, which are expected to be delivered in April and
May of 2003.

     During April 2001, OMI agreed to acquire a 37,000 dwt product carrier,
which was under construction for another owner for approximately $30,500,000.
Upon delivery in November 2001, the vessel will commence a three-year time
charter.

                                       13

<PAGE>

     During February 2001, OMI agreed to purchase two Suezmax vessels under
construction by another owner for 2002 delivery for $53,800,000 each.

     During November 2000, OMI contracted to purchase a 47,000 dwt product
tanker at an approximate cost of $28,750,000 to be delivered in January 2002
from a Japanese shipyard. In January, March and June 2001, OMI exercised options
to purchase three 47,000 dwt product carriers at an approximate aggregate cost
of $87,480,000 to be delivered from the same shipyard in March 2002 and February
and March 2003. The vessels on order will commence three- year time charters
upon delivery.

     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, are of such nature that the ultimate liability, if any, would not
have a material adverse effect on the consolidated financial statements.

NOTE 9-STOCKHOLDERS' EQUITY

 Stock Based Compensation

     Options- During the quarter and nine months ended September 30, 2000, the
Company recorded compensation expense of $699,000 and $1,240,000, respectively,
relating to stock options. The 2000 compensation expense was recorded in general
and administrative expense in the statements of operations. There was no
compensation expense related to stock options for the three and nine months
ended September 30, 2001.

     As of September 30, 2001, capital surplus was debited for $481,000 relating
to the current quarter's compensation expense adjustment and deferred
compensation relating to the above option plan at OMI's stock price at September
30, 2001. At September 30, 2001, the balance in deferred compensation relating
to options was zero, resulting from the option prices being below OMI's stock
price at that date.

     Restricted Stock-On July 2, 2001, OMI awarded 900,000 shares of restricted
stock to executive officers and directors for a total value at the date of grant
of $5,121,000. Of the 900,000 shares, restrictions lapse for 25 percent at the
end of year three, the next 25 percent at the end of year five, and the
remaining 50 percent of the shares at varying years in accordance with years of
service at an individual's retirement date (if the executive officer or director
remains with the Company for at least five years from the date of grant).

 Treasury Stock

     On March 31, 2001 the Board of Directors resolved to retire 2,028,000
shares of treasury stock aggregating $8,834,000.

                                       14


<PAGE>

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

     The following presentation of management's discussion and analysis of the
OMI Corporation ("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.

     The information in this Management Discussion and Analysis and elsewhere in
this document contains certain forward-looking statements, which reflect the
current view of the Company with respect to future events and financial
performance. Wherever used, the words "believes," "estimates," "expects,"
"plan," "anticipates" and similar expressions identify forward-looking
statements. Any such forward-looking statements are subject to risks and
uncertainties that could cause the actual results of the Company's results of
operations to differ materially from historical results or current expectations.
The Company does not publicly update its forward-looking statements even if
experience or future changes make it clear that any projected results expressed
or implied therein will not be realized.

GENERAL

 Overview

     OMI is one of the largest publicly-traded providers of energy
transportation services in the world. Our ships carry crude oil and refined
petroleum products in international markets for major oil companies.

     OMI's net income was $7.6 million or $0.11 basic/diluted earnings per share
("EPS") for the third quarter 2001 compared to net income of $22.4 million or
$0.38 basic/diluted EPS for the third quarter 2000. For the nine months ended
September 30, 2001, net income was $75.6 million or $1.13 basic/diluted EPS
compared to a net income of $21.7 million or $0.39 basic/diluted EPS for the
nine months ended September 30, 2000.

FLEET REPORT

     OMI's fleet currently comprises 29 vessels (including the product carrier
delivered on October 12, 2001) aggregating 2.1 million deadweight metric tons
("dwt"), consisting of six Suezmaxes, three Panamax tankers carrying crude oil,
17 handysize and handymax product carriers, two handysize crude oil tankers and
one ultra large crude carrier ("ULCC") as follows:


                                             Number
                                            of Vessels             dwt
                                            -----------     --------------------
Crude Oil Fleet:
----------------
     1998-2001 built Suezmax vessels .....      5             150,000-160,000
     1999 Suezmax vessel chartered-in ....      1             157,000
     1993 built crude tankers ............      2              36,000
     1980's built Panamax vessels ........      3              66,000
     1986 built ULCC .....................      1             322,000
                                               --
                  Total ..................     12
                                               ==

Product Carrier ("Clean") Fleet:
--------------------------------
     2000 built handymax product .........      2              47,000
     1999-2001 built handysize product ...      6              35,000-37,000
     1984-1991 built handysize product ...      9              29,000-35,000
                                               --
                  Total ..................     17
                                               ==

                                       15

<PAGE>

     Our objective is to operate a high quality, well-maintained, modern fleet
of vessels that are concentrated in selected markets. Large fleets of
uniform-sized younger vessels offer many advantages to customers, as well as
enabling the Company to maintain lower operating costs. In recent years, we have
sought to modernize and increase the size of our fleet. OMI began purchasing
rights to obtain vessels upon delivery from shipyards in 2000. By doing so, we
obtain earlier access to the vessels than we would if we ordered from the
shipyards and we increase the size of our fleet without increasing the supply of
tonnage. In 2001, we acquired two Suezmax and five handysize product carriers
under construction (two vessels were delivered in September) from other owners.
We have also contracted for four handymax and two Panamax newbuildings.

     OMI has the following vessels contracted for delivery:

Vessels On Order:
                                              Expected
                                               Delivery   Approx.    Charter
To Be Named             Type of Vessel           Date       dwt    Expiration
-----------         ------------------------  ---------   -------  ----------
ASHLEY ..........   Product/Chemical Carrier   11/2001     37,000    11/2004
OHIO ............   Product Carrier            12/2001     37,000    12/2004
AMAZON ..........   Product Carrier             1/2002     47,000     1/2005
SAN JACINTO .....   Product Carrier             3/2002     47,000     3/2005
ORONTES .........   Product Carrier             3/2002     37,000     3/2005
DAKOTA ..........   Crude Oil Tanker            9/2002    159,000       Spot
DELAWARE ........   Crude Oil Tanker           10/2002    159,000       Spot
MOSELLE .........   Product Carrier             2/2003     47,000     2/2006
ROSETTA .........   Product Carrier             3/2003     47,000     3/2006
OTTAWA ..........   Product Carrier             4/2003     70,100       Spot
TAMAR ...........   Product Carrier             5/2003     70,100       Spot
                                                          -------
                                               Total      757,200
                                                          =======

Recent Activities

During 2001 OMI:

(a)  Contracted to purchase two product carriers built in 2000; the first vessel
     was delivered on September 10, 2001 and the second was delivered on October
     12, 2001. The vessels have been committed to five-year time charters.

(b)  Contracted with two shipowners to acquire three product carriers under
     construction. Two vessels were delivered in September 2001 and commenced
     three-year time charters. The third vessel is expected to be delivered in
     November 2001 and is also committed to a three-year time charter upon
     delivery.

(c)  Acquired two 1993 built 36,000 dwt crude oil carriers in June 2001, which
     had remaining time charters of approximately four years on each vessel (not
     including charterer's options to extend).

(d)  Sold a 2000 built Suezmax tanker, recognizing a gain on sale of $17.5
     million upon delivery in June 2001.

(e)  Acquired a 2000 built 35,000 dwt product carrier in April 2001 from another
     owner and commenced a three-year time charter upon delivery.

(f)  Acquired two 1990 and one 1989 built product carriers. Sold one of the 1990
     built vessels at a gain of $0.6 million in May 2001.

(g)  Purchased a new Suezmax tanker in January 2001 from a shipbuilder, the
     contract for which was acquired from another owner.

(h)  Contracted to build two Panamax vessels to be delivered in April and May
     2003.

(i)  Agreed to acquire two shipbuilding contracts for Suezmax vessels from
     another owner to be delivered in September and October 2002.


                                       16


<PAGE>


(j)  Exercised options to purchase three 47,000 dwt product carriers to be
     delivered in March 2002 and February and March 2003, which will commence
     three year time charters upon delivery.

(k)  Redelivered two Suezmax vessels in accordance with early termination
     clauses of charter hire agreements.

(l)  Extended four time charters for an additional two years for product carrier
     newbuildings delivered in 1999 and 2000.

MARKET OVERVIEW

     Rates in the third quarter 2001 softened for the crude oil fleet but
remained stable for the product carrier fleet in comparison to the third quarter
2000. Third quarter rates in both the crude oil fleet and the product carrier
fleet operating in the spot market declined in comparison to second quarter 2001
rates.

     Tanker charter rates are determined in a highly competitive market and
depend on the supply of and demand for tanker capacity. Demand for tankers
depends primarily on the volume of crude oil and petroleum products transported
as well as the distance over which it is carried. Such demand is a function of
world economic conditions and the resulting need for oil, world oil production
and consumption patterns, as well as events which interrupt oil production,
trade routes and consumption. The supply of tankers depends primarily on the
level of the orderbook, the fleet age profile, government regulations that
affect the level of tanker scrappings and the behavior of tanker users as well
as the operating efficiency of the existing fleet.

Crude Oil Fleet Highlights

     In the third quarter 2001, rates for OMI's Suezmax, Panamax and ULCC
vessels operating in the spot market declined. In addition, the vessels had more
waiting days (the days the vessel is not sailing and is waiting for a
cargo/contract) in comparison to the second quarter 2001. OMI's average market
rates or average time charter equivalents ("TCE") rates include waiting days and
exclude drydock days. Lower spot rates in the crude oil sector resulted from
declines in oil exports from Iraq coupled with OPEC's decisions to reduce its
oil production quotas in February, April and again in September of 2001 by the
total of 3.5 million barrels per day (b/d) to support oil prices. TCE rates also
fell as a result of lower demand for oil due to world economic slowdown and more
recently due to the September 11th attack on the U.S.

     The world tanker fleet totaled approximately 283 million dwt at the end of
the third quarter 2001, up by 2.7 million dwt or 1.0% from the year-end 2000
level. The tanker orderbook for delivery over the next few years totaled 67.2
million dwt, or 23.7% of the existing fleet at the end of September 2001.
Approximately 4.6 million dwt of the orderbook is scheduled for delivery in
2001, 25.1 million dwt in 2002, 27.4 million dwt in 2003 and the balance in
2004. The tanker orderbook includes 63 Suezmaxes aggregating 9.9 million dwt, or
29.3% of the existing internationally trading Suezmax tanker fleet and 92 VLCCs
aggregating 28.4 million dwt, or 22.6% of the existing VLCC fleet. The
relatively high tanker orderbook reflects the robust tanker market in 2000 and
early 2001 as well as the need for tanker replacement due to new International
Maritime Organization ("IMO") regulations. These regulations will take effect in
2003 and will force the phrase out of old tankers, or about 30% of the existing
tankers fleet through 2007.

     Approximately 79.2 million dwt, or 28% of the total tanker fleet was 20 or
more years old at the end of the September 2001, and 40 million dwt or 14.1% of
the existing tanker fleet was 25 or more years old. In addition, 42

                                       17


<PAGE>

Suezmaxes of about 6.0 million dwt, or 17.7% of the existing Suezmax fleet was
20 or more years old, including 25 Suezmaxes which are 25 or more years old.

     Tanker sales for scrap and for Floating Production Storage Offloading
("FPSO") conversion total 12.4 million dwt through September 2001, or an annual
rate of about 16.5 million dwt. This is about the same as newbuilding deliveries
this year and would result in a stable tanker supply in the foreseeable future.
Tanker scrappings have accelerated since May as TCEs began to soften. This is an
indication that in the presence of strict environmental regulations, the owners
of old and inefficient tanker tonnage will not hesitate to sell these vessels
for scrap at times of rate weakness. So far this year, twelve Suezmaxes and
eighteen VLCCs have been sold for scrap, and six Suezmaxes and eight VLCCs were
sold for FPSO conversion. Tanker scrapping activity continues and in October
about 2.0 million dwt were sold for scrap, including six VLCCs and one Suezmax.

     World oil demand is expected to increase only marginally in 2001 as a
result of the world economic slowdown in the second half of the year. This is
expected to reduce tanker market prospects in the short-term due to lower oil
demand and possibly further OPEC oil production cuts, notwithstanding the usual
seasonal tanker market benefits from the upcoming winter.

     It is unclear when world economic activity will begin to improve. Against
that backdrop, the newbuilding deliveries during the next two years are
substantial and improvement in rates will depend upon when oil demand increases
and the level of scrapping of old tankers.

Product Carrier ("Clean") Fleet Highlights

     Rates for OMI's product carriers operating in the spot market increased in
the third quarter 2001 versus the third quarter 2000, although such rates
softened slightly from the second quarter 2001.

     Average TCE rates for handysize product tankers in the Caribbean fell
compared to the previous quarter as well as from the year ago level. This was
due to weaker world economic conditions resulting in fewer cargo movements and
some growth in the product tanker supply.

     The world product tanker fleet totaled 47.8 million dwt at the end of the
third quarter 2001, up by 0.9 million dwt or 1.9% from the end 2000 level. The
product tanker orderbook for delivery over the next few years totaled 9.9
million dwt, or 20.7% of the existing product tanker fleet at the end of
September 2001. Approximately 0.5 million dwt are scheduled for delivery in
2001, 4.1 million dwt in 2002, 4.1 million dwt in 2003 and the balance in 2004.
At the same time, about 10.6 million dwt or 22.2% of the existing fleet was 20
or more years old and 4.4 million dwt or 9.2% of the existing fleet was 25 or
more years old, of which 54% are handysize vessels.

     It appears that in the short-term, product tanker rates have not been
effected directly by OPEC's decisions as has the crude oil tanker market. The
fall in oil demand due to adverse economic conditions could have an affect on
the usual seasonal improvement in the product tanker market, unless the upcoming
winter is colder than normal. In the long-term, the return of world economic
activity and the shortage of refinery capacity in the United States, western
Europe and Asia would provide for improvement in the product tanker market.

RESULTS OF OPERATIONS

     Results of operations of OMI Corporation include operating activities of
the Company's vessels. The following discussion explains our operating

                                       18


<PAGE>

results in terms of net voyage revenues and TCE revenues. Net voyage revenues
are voyage revenues minus vessel and voyage expenses (including charter hire
expense). Consistent with industry practice, we use TCE revenue (voyage revenue
less voyage expenses) or TCE rate calculations 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 revenue.

     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. A
single voyage charter is often referred to as a "spot market" charter. Vessels
in the spot market may also spend time idle or laid up as they await business.

     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. In
time charters, operating costs such as for crews, maintenance and insurance are
typically paid by the owner of the vessel and voyage costs such as fuel and port
charges are paid by the charterer.

     Under a bareboat charter, the charterer takes possession of the vessel in
return for a specified amount payable to the owner of the vessel. The bareboat
charterer must provide its own crew, pay all operating and voyage expenses and
is responsible for the operation and management of the vessel.

     Voyage, time and bareboat charters are available for varying periods,
ranging from a single trip to a long-term arrangement approximating the useful
life of the ship to commercial firms (such as oil companies) and governmental
agencies (both foreign and domestic) on a worldwide basis. In general, a
long-term charter affords the vessel owner greater assurance that it will be
able to cover its costs, including depreciation, interest, and operating costs.
Operating the vessel in the spot market affords the owner greater speculative
opportunity, which may result in high rates when ships are in high demand or low
rates (possibly insufficient to cover costs) when ship availability exceeds
demand. Ship charter rates are affected by world economics, international
events, weather conditions, strikes, governmental policies, supply and demand,
and many other factors beyond the control of OMI.

     OMI is in the process of securing certain vessels on long-term time charter
contracts (see Outlook section). Currently, 12 of OMI's 29 vessels are secured
on time charters greater than one year. The crude oil fleet, however, has been
operating primarily in the spot market, with the exception of two crude oil
carriers acquired in June 2001 with time charters. In the discussion that
follows total operating days are net of offhire days, which are any days that
the vessel is not generating revenue due to drydock, special surveys, repairs
and initial positioning of the vessel.

     Vessel expenses included in net voyage revenue discussed above include
operating expenses such as crew wages and other related costs, stores, routine
maintenance and repairs, amortization of drydock costs, insurance and
miscellaneous. These expenses are a function of the fleet size, utilization
levels for certain expenses, requirements under laws, and by charterer and
Company standards. Insurance expense varies with the overall insurance market
conditions as well as the insured's loss record, level of insurance and desired
coverage. During the third quarter, OMI locked in its insurance premiums with
three-year contracts, which also covers the new vessels that OMI has on order,
for hull and machinery and for most of its fleet, protection and indemnity
insurance.

                                       19

<PAGE>


Voyage Revenues less Vessel and Voyage Expenses

For the Three and Nine Months Ended September 30, 2001 Versus September 30, 2000

     Net voyage revenues of $24.1 million for the three months and $103.2
million for the nine months ended September 30, 2001 decreased $12.6 million for
the three months and increased $32.2 million for the nine months ended September
30, 2000, respectively. Net voyage revenues for the three and nine months ended
September 30, 2001 and 2000 were as follows by market segments in which OMI
primarily operates.

In millions
                                           FOR THE THREE         FOR THE NINE
                                            MONTHS ENDED         MONTHS ENDED
                                            SEPTEMBER 30,        SEPTEMBER 30,
                                           ----------------   ---------------
                                            2001     2000      2001       2000
                                           -------  -------   --------  --------
VOYAGE AND OTHER REVENUES (NET OF
  COMMISSIONS):
Crude Oil Fleet .........................   $  24.7  $  44.2 $  102.7  $   92.3
Product Carrier Fleet ...................      20.4     10.7     58.1      29.8
Other Revenue ...........................       0.1      --       0.2       --
                                            -------  ------- --------  --------
  Total .................................   $  45.2  $  54.9 $  161.0  $  122.1
                                            =======  ======= ========  ========
VOYAGE EXPENSES:
Crude Oil Fleet .........................   $   5.4  $   7.3 $   15.4  $   18.3
Product Carrier Fleet ...................       2.8      --       6.5       --
                                            -------  ------- --------  --------
  Total .................................   $   8.2  $   7.3 $   21.9  $   18.3
                                            =======  ======= ========  ========
TCE REVENUES:
Crude Oil Fleet .........................   $  19.3  $  36.9 $   87.3  $   74.0
Product Carrier Fleet ...................      17.6     10.7     51.6      29.8
                                            -------  ------- --------  --------
  Total .................................   $  36.9  $  47.6 $  138.9  $  103.8
                                            =======  ======= ========  ========
VESSEL EXPENSES (INCLUDING CHARTER HIRE):
Crude Oil Fleet .........................   $   7.3  $   7.5 $   21.9  $   21.9
Product Carrier Fleet ...................       5.7      3.4     14.5      10.8
All Other ...............................      (0.1)     --      (0.5)      0.1
                                            -------  ------- --------  --------
  Total .................................   $  12.9  $  10.9 $   35.9  $   32.8
                                            =======  ======= ========  ========
NET VOYAGE REVENUES:
Crude Oil Fleet .........................   $  12.0  $  29.4 $   65.4  $   52.1
Product Carrier Fleet ...................      11.9      7.3     37.1      19.0
All Other ...............................       0.2      --       0.7      (0.1)
                                            -------  ------- --------  --------
  Total .................................   $  24.1  $  36.7 $  103.2  $   71.0
                                            =======  ======= ========  ========

Net changes are discussed as follows according to the two market segments (crude
oil and product carrier) in which OMI primarily operates.

Crude Oil Tanker Fleet

     At September 30, 2001, OMI operated 12 crude oil carriers, including one
vessel chartered-in, compared to 12 crude oil carriers at September 30, 2000,
including three vessels chartered-in.

     Changes from January 1, 2000 to September 30, 2001 that are reflected in
the operating results of the crude oil fleet are as follows:

o    acquired two handysize crude oil tankers in June 2001 (time chartered until
     May/July 2005 not including options)


                                       20


<PAGE>


o    sold a Suezmax vessel in June 2001 at a gain of $17.5 million

o    acquired a Suezmax newbuilding in January 2001

o    redelivered two chartered-in vessels in January and March 2001

o    received delivery of two Suezmax newbuildings, which began their first
     voyages in the second quarter of 2000

o    acquired a ULCC vessel, which was purchased on June 30, 2000 (the Company
     previously owned 49 percent) from OMI's joint venture partner

o    sold an aframax vessel in March 2000

     Net Voyage revenues earned by the crude oil fleet for the three and nine
months ended September 30, 2001 were $12.0 million and $65.4 million,
respectively, a decrease of $17.4 million over the three months and an increase
of $13.3 million over the nine months ended September 30, 2000.

     The following table sets forth comparative operating results for the crude
oil fleet for the three and nine months ended September 30, 2001 and September
30, 2000:

In millions
                                          FOR THE THREE   FOR THE NINE
                                           MONTHS ENDED   MONTHS ENDED
                                          SEPTEMBER 30,   SEPTEMBER 30,
                                       ----------------  --------------
                                         2001     2000     2001    2000
                                       -------  ------   -------  -----
CRUDE FLEET:

SUEZMAXES:
TCE revenue ........................   $  11.2 $  28.1 $  58.8 $  55.8
Vessel expenses ....................       2.6     1.7     8.0     5.6
Charter hire expense ...............       1.6     4.0     6.2    11.6
                                       ------- ------- ------- -------
Net voyage revenue .................   $   7.0 $  22.4 $  44.6 $  38.6
                                       ======= ======= ======= =======
ULCC:
TCE revenue ........................   $   2.2 $   2.7 $   7.8 $   2.7
Vessel expenses ....................       0.7     0.6     2.3     0.6
                                       ------- ------- ------- -------
Net voyage revenue .................   $   1.5 $   2.1 $   5.5 $   2.1
                                       ======= ======= ======= =======
PANAMAXES:
TCE revenue ........................   $   2.9 $   6.1 $  17.4 $  14.5
Vessel expenses ....................       1.9     1.2     4.8     3.9
                                       ------- ------- ------- -------
Net voyage revenue .................   $   1.0 $   4.9 $  12.6 $  10.6
                                       ======= ======= ======= =======
OTHER CRUDE & Misc. Adjustments:
TCE revenue ........................   $   3.0 $  --   $   3.4 $   1.1
Vessel expenses ....................       0.5    --       0.7     0.3
                                       ------- -----   -------  ------
Net voyage revenue .................   $   2.5 $  --   $   2.7 $   0.8
                                       ======= =====   ======= =======
TOTAL CRUDE FLEET NET VOYAGE REVENUE   $  12.0 $  29.4 $  65.4 $  52.1
                                       =======   ===== ======= =======

     Fluctuations in each of the crude oil fleet vessel types were as follows:

     Suezmaxes- Net decreases in the Suezmax fleet net voyage revenue was $15.4
million or 69 percent for the three months and increases in net voyage revenue
of $6.0 million or 16 percent for the nine months ended September 30, 2001
compared to 2000. Decreases in net voyage revenue of $17.2 million in the third
quarter 2001 compared to the third quarter 2000 resulted from (1) a decline in
charter rates coupled with increased waiting days for five vessels operating on
spot charters in both periods, (2) a decrease in net voyage revenue of
approximately $4.0 million due to the sale of a Suezmax vessel

                                       21


<PAGE>

(LOIRE) in June 2001 and (3) 184 fewer operating days in the third quarter 2001
due to the early termination of time charters-in of two vessels redelivered
during the first quarter 2001. Increases in net voyage revenue of $1.8 million
that partially offset the decreases were attributable to revenue earned from a
newly acquired Suezmax vessel (SOMJIN) delivered in January 2001.

     Increase in net voyage revenue during the nine months ended September 30,
2001 compared to the nine months ended September 30, 2000 were primarily
attributable to (1) an increase in the average YTD TCE revenue for Suezmax
vessels and (2) an increase of $8.4 million in 2001 for three Suezmaxes (SOMJIN,
SOYANG and LOIRE), two of which had been delivered during the second quarter
2000 and one of which had been delivered in January 2001. Increases in net
voyage revenue were reduced by decreases in net voyage revenue during the nine
months ended September 30, 2001 compared to the same period in 2000 primarily in
the third quarter 2001 for the reasons outlined in the previous paragraph.

     Six of our Suezmax vessels (after the sale of the LOIRE and completion of a
time charter contract of a vessel in August 2001) have been operating in a
marketing alliance with other vessels that are operated by our joint venture,
Alliance Chartering LLC ("Alliance"), which is jointly owned with Frontline
Ltd., a major international shipping company. Alliance principally trades from
West Africa to the U.S. Atlantic coast and from the North Sea to the U.S.
Atlantic coast.

     Average daily TCE revenue (which includes waiting time) earned in the spot
market in 2000 and 2001 was as follows:

                  $22,723 1Q 2000       $38,357 1Q 2001
                  $27,185 2Q 2000       $37,426 2Q 2001
                  $42,041 3Q 2000       $20,340 3Q 2001
                  $49,390 4Q 2000

     The decline in rates in the third quarter 2001 from the second quarter 2001
and in comparison to third quarter 2000 rates for these vessels are consistent
with the decline in the TCE rates for this sector resulting from current
economic conditions and other factors discussed in the Market Overview.

ULCC- Net voyage revenues decreased $0.6 million during the three months and
increased $3.4 million during the nine months ended September 30, 2001 compared
to the same period in 2000. Increases in the nine month period resulted from
OMI's purchase of its joint venture partner's interest. The venture owned one
ULCC vessel, which became wholly owned by OMI on June 30, 2000. This vessel's
earnings were accounted for in equity in operations of joint ventures at 49.0
percent during the first half of 2000. Earnings were lower in the third quarter
2001 because the vessel was just coming out of drydock (offhire for 50 days) at
a time when spot rates began to decline.

Panamaxes- Net voyage revenues decreased $3.9 million during the three months
and increased $2.0 million during the nine months ended September 30, 2001
compared to the same period in 2000. Decreases in the third quarter 2001
resulted from a decline in charter hire rates coupled with 82 offhire days
during the quarter relating to the drydock of one of the vessels. Increased
rates for two of the Panamax vessels operating in the pool during the nine
months ended September 30, 2001 resulted from better tanker market fundamentals
during the first half of 2001 compared to 2000.

Other Crude Oil Tankers & Misc. Adjustments-Earnings of $2.5 million and $2.8
million during the three and nine months ended September 30, 2001,

                                      22


<PAGE>


respectively, represent net voyage revenue for the two crude oil carriers
delivered during June 2001 that are continuing on long-term time charters until
mid-2005, not including options. Earnings for the aframax sold in March 2000 and
other adjustments relating to the settlement of accruals for vessels previously
sold were included in this group for 2001 and 2000.

Product Carrier Fleet

     At September 30, 2001, OMI operated 16 product carriers (three of which
were delivered mid-September 2001) compared to nine product carriers at
September 30, 2000. Changes from January 1, 2000 to September 30, 2001 that are
reflected in the operating results of the product carrier or ("Clean") fleet are
as follows:

o    acquired two handysize product carrier newbuildings in September 2001
    (time chartered until September 2004)

o    acquired a 2000 built handysize product carrier in September 2001 (time
     chartered until September 2006)

o    acquired a 2000 built handysize product carrier in April 2001 (time
     chartered until April 2004)

o    acquired three secondhand handysize product carriers in February and March
     2001

o    sold one product carrier purchased in March 2001 during May 2001 at a gain
     of $0.6 million

o    acquired two handymax product carriers in September and November 2000
     (originally time chartered until 2002 and extended until 2004 during 2001)

o    Sold four handysize product carriers, three in May 2000 and one in August
     2000

     Net Voyage revenues earned by the product carrier fleet for the three and
nine months ended September 30, 2001 were $11.9 million and $37.1 million,
respectively, an increase of $4.6 million over the three months and $18.1
million over the nine months ended September 30, 2000.

     The following table sets forth comparative operating results for the
product carrier fleet for the three and nine months ended September 30, 2001 and
September 30, 2000:

In millions
                                         FOR THE THREE   FOR THE NINE
                                          MONTHS ENDED   MONTHS ENDED
                                          SEPTEMBER 30,  SEPTEMBER 30,
                                       ---------------  --------------
                                         2001   2000     2001    2000
                                       ------- -------  ------ -------
CLEAN FLEET:
PRODUCTS ON SPOT:
TCE revenue ........................   $   8.8 $  7.6  $  32.2 $  22.2
Vessel expenses ....................       3.1    2.8      9.3     9.0
                                       ------- ------  ------- -------
Net voyage revenue .................   $   5.7 $  4.8  $  22.9 $  13.2
                                       ======= ======  ======= =======
PRODUCTS ON TIME CHARTER:
TCE revenue ........................   $   8.8 $  3.0  $  19.5 $   7.5
Vessel expense .....................       2.6    0.5      5.3     1.7
                                       ------- ------  ------- -------
Net voyage revenue .................   $   6.2 $  2.5  $  14.2 $   5.8
                                       ======= ======  ======= =======

TOTAL CLEAN FLEET NET VOYAGE REVENUE   $  11.9 $  7.3  $  37.1 $  19.0
                                       ======= ======  ======= =======

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

                                       23


<PAGE>



Product Carriers (on spot)- During the nine months ended September 30, 2001,
eight of the Company's handysize product tankers were operating in the spot
market (six of these vessels were previously in a marketing pool with a joint
venture until March/April 2001) compared to six vessels (after the sale of
three vessels in the second quarter and one vessel in the third quarter 2000)
at September 30, 2000. Time charter rates from the joint venture marketing pool
reflected spot market rates since they were adjusted periodically with pool
profits. Three vessels were acquired in February and March 2001 (one was sold
May in 2001) and are also included in the vessels operating in the spot market.

     The net increase in net voyage revenue during the third quarter of 2001 of
$4.6 million over the third quarter of 2000, reflect a net increase of $0.9
million for vessels operating in the spot market. Spot market vessel increases
of approximately $1.7 million were attributable to net voyage revenue earned by
the two vessels acquired in 2001 and increases in TCE rates for the five vessels
operating in the spot market in both periods. Such earnings were offset in part
by decreased profits of $0.4 million from a vessel sold in August 2000 (41 more
operating days in 2000), lower earnings from two product carriers offhire
relating to drydock an aggregate of 27 days in the third quarter 2001 and lower
earnings of approximately $0.8 million because a vessel operating in the spot
market in 2000 began a two-year time charter in July 2001.

     The net increase in net voyage revenue during the nine months ended
September 30, 2001 of $18.1 million over the comparable period in 2000, reflect
a net increase of $9.7 million for vessels operating in the spot market. Spot
market vessel increases of approximately $4.8 million were attributable to net
voyage revenue earned by the three vessels acquired in 2001 (including one
vessel, which was sold in May 2001). Increases in TCE rates during 2001 resulted
in higher net voyage revenue of approximately $8.0 million, (net of 69 days
offhire for three vessels, which were drydocked in 2001) relating to five
vessels (plus 182 days of a sixth vessel that began a time charter in July 2001)
that operated in the spot market in both periods. Such earnings were offset in
part by decreased profits of approximately $3.0 million attributable to four
vessels disposed of in 2000 (588 more operating days in 2000) and lower earnings
of approximately $0.8 million because a vessel that operated in the spot market
in 2000 began a time charter in July 2001.

     Average daily TCE revenue earned (which includes waiting time, vessels sold
in 2000 and vessels acquired in 2001) was as follows:

           $ 7,206     1Q 2000      $17,542 1Q 2001
           $11,031     2Q 2000      $17,602 2Q 2001
           $12,774     3Q 2000      $14,132 3Q 2001
           $14,995     4Q 2000

     The increase in rates for OMI's product carriers in the spot market are
consistent with the incremental rise in the TCE rates for this sector. See
discussion in the Market Overview.

Product Carriers (on time charter)- Increases in net voyage revenue of $3.7
million for the three months and $8.4 million for the nine months ended
September 30, 2001 over 2000, relate primarily to earnings from six additional
vessels in 2001 compared to 2000 periods; two handymax product carriers, which
were delivered September and November 2000, a 2000 built product carrier
acquired April 2001 and three product carriers acquired in mid-September 2001.
Additionally, a vessel previously operating in the spot market began a time
charter in July 2001 (91 more operating days included for Products on time

                                       24


<PAGE>


charter in 2001). Earnings for this group increased primarily from 412 more
operating days in the third quarter 2001 (841 more days for the nine months
ended September 30, 2001).

Other Operating Expenses

     The Company's operating expenses, other than vessel, voyage and charter
hire expenses, consist of depreciation and amortization, general and
administrative ("G & A") expenses and (gain) loss on disposal/write down of
vessels-net. For the third quarter 2001 these expenses increased by $2.5 million
and for the nine months ended September 30, 2001, these expenses decreased by
$22.2 million.

     Depreciation and amortization- Depreciation expense increased a net $3.8
million for the three months and $11.0 million for the nine months ended
September 30, 2001 over the three and nine months ended September 30, 2000. The
2001 depreciation expense includes additional depreciation for the vessels
delivered in 2001 and 2000; (1) one Suezmax delivered January 2001, (2) three
products delivered February and March 2001 (one sold May 2001), (3) one product
carrier delivered April 2001, (4) two crude oil tankers delivered in June 2001,
(5) three product carriers delivered September 2001 (6) two new Suezmaxes, which
began operating in the second quarter of 2000, (7) the ULCC vessel acquired in
June 2000, and (7) two handymax vessels acquired in the fourth quarter of 2000.
In addition to depreciation expense on newly acquired vessels, we had additional
depreciation expense during the nine months ended September 30, 2001 for five
vessels that we had included as vessels to be disposed of during 2000; these
vessels are no longer required to be sold.

General and administrative- G & A expense did not fluctuate significantly during
the three and nine months ended September 30, 2001 compared to the three and
nine months ended September 30, 2000.

(Gain) loss on disposal/write down of vessels-net- The net gain on disposal
/write down of vessels decreased other operating expenses by $1.5 million for
the three months and $33.6 million for the nine months ended September 30, 2001
over the 2000 comparable periods.

     During May and June 2001, OMI recognized a gain on the disposal of two
vessels, a 2000 built Suezmax vessel with a gain of $17.5 million and gain on
the sale of a product carrier (acquired in March 2001) of $0.6 million.

     The early redelivery of the two chartered-in vessels in 2001 resulted in a
net gain of $1.4 million included in the nine months ended September 30, 2001
results of operations. Gains recognized upon notice of early termination
included in the 2001 results, were due to the accelerated amortization of the
deferred gain on the sale/leaseback of one vessel and acceleration of the
provision for loss on lease obligation that was being amortized over the
original lease term for the other vessel.

     Losses of $14.1 million during the nine months ended September 30, 2000
related to the disposal of four vessels and writedown of two vessels.
Adjustments for three vessels previously classified as Vessels to be disposed of
resulted in additional losses on the sale dates aggregating $6.3 million ($1.4
million of which was recorded in the third quarter upon the sale of a vessel in
August 2001). The net realizable values of two similar vessels, which also were
classified as Vessels to be disposed of at December 31, 1999, were adjusted
during the first quarter 2000 by an aggregate of $3.0 million. A vessel sold in
May 2000 resulted in a loss on disposal of $4.8 million.

                                       25


<PAGE>

Other Income (Expense)

     Other income (expense) consists of loss on disposal/write down of joint
venture investments, interest expense, interest income and other-net. Net other
expense decreased by $1.3 million from $6.5 million during the three months
ended September 30, 2000 to $5.2 million for the three months ended September
30, 2001. Net other expense decreased by $1.3 million from $16.6 million during
the nine months ended September 30, 2000 to $15.3 million for the nine months
ended September 30, 2001.

     Interest expense decreased $3.4 million during the third quarter 2001 and
decreased $4.7 million during the nine months ended September 30, 2001 from the
three and nine months ended September 30, 2000. Although the average outstanding
debt for the three and nine months ended September 30, 2001 was higher than the
comparable periods in 2000 due to additional borrowings for acquisitions above
that of the repayments from the disposal of vessels in 2000 and 2001, interest
expense decreased. For the third quarter 2001, OMI's average interest rate
(including margins and amortization of fees) was 6.14% on the Company's variable
rate debt compared to 10.77% during the third quarter of 2000. During the nine
months ended September 30, 2001, OMI's average interest rate (including margins
and amortization of fees) was 6.96% on the Company's variable rate debt compared
to 9.81% during the nine months ended September 30, 2000. Recent decreases in
LIBOR (the London Interbank Offering Rate) rates will be recognized at various
dates in the fourth quarter on which the variable rate credit facilities
outstanding balance aggregating $431.0 million at September 30, 2001, $175.0
million for which interest has been fixed by swap transactions (interest, not
including margins, was fixed at 4.86% for $115.0 million and 4.77% for $60.0
million).

     The loss on disposal/write down of joint venture investments of $1.6
million during the nine months ended September 30, 2001 ($1.1 million in the
third quarter 2001), relates to the reserve for the loss on investment during
the winding down of the International Product Carriers Limited joint venture,
and the 2000 loss on disposal of investments of $0.5 million resulted from the
sale of a joint venture.

     Other-net during the three and nine months ended September 30, 2001
primarily represents the settlement of a claim on one of our vessels. During the
three and nine months ended September 30, 2000, other-net also represented
settlement of insurance claims on various vessels.

Equity in Operations of Joint Ventures

     Equity in operations of joint ventures decreased by $1.0 million for the
three months and $1.8 million for the nine months ended September 30, 2001
compared to the three and nine months ended September 30, 2000. During the first
half of 2001 OMI recorded its proportional amount of profit sharing earned by a
joint venture. As of the third quarter 2001, OMI no longer has any such joint
venture interests or profit sharing arrangements. During the nine months ended
September 30, 2000, we had a profit sharing arrangement with a joint venture and
also had an interest in one vessel-owning joint venture, which operated a ULCC
vessel. OMI acquired the joint venture company from its partner on June 30,
2000.

Balance Sheet

The information provided in the following paragraphs represent balance sheet
fluctuations other than from operating activities between the balance sheet
dates December 31, 2000 and September 30, 2001.

                                       26

<PAGE>


     During January 2001, OMI took delivery of a new Suezmax tanker originally
contracted for by another owner. Total capitalized costs aggregated $61.5
million; $6.0 million was reclassed from Other assets and deferred charges to
Vessels for the deposit made in the fourth quarter 2000. Financing of $35.0
million was obtained from existing lenders ($1.7 of which has been repaid) to
acquire the vessel.

     During February and March 2001, OMI purchased three vessels for an
aggregate of $41.3 million. We issued 2,650,000 shares of common stock at $7.00
per share or $18.6 million and financed $23.0 million. In May 2001, OMI sold one
of the vessels purchased in March for $14.8 million and recognized a gain on the
sale of $0.6 million. The $23.0 million in debt was refinanced in July 2001 as
part of the new credit Facility (see Financing Activities).

     During February 2001, OMI agreed to purchase two construction contracts for
Suezmax vessels that were under construction by another owner for 2002 delivery.
We have paid $19.2 million in cash ($12.9 million of which was financed by the
new credit Facility; see Financing Activities), recorded capitalized interest of
$1.7 million and issued 4,049,000 shares, recorded at $7.00 per share
aggregating $28.3 million.

     During April and June 2001, OMI purchased one product carrier and two crude
oil tankers. Total capitalized costs aggregated $72.6 million. We issued
3,125,000 shares of common stock at $8.00 per share or $25.0 million, paid cash
of $47.6 million, of which $19.0 million was financed in April and $28.2 million
was financed in the third quarter 2001 with the new credit Facility (see
Financing Activities).

     During September 2001, OMI purchased three product carriers with
approximate capitalized costs aggregating $92.4 million. Two vessels were
financed for $40.4 million under the new credit Facility and one was financed in
September with a $20.0 million term loan (see Financing Activities).

     During 2001, OMI paid an aggregate of $33.7 million in progress payments
for nine vessels, seven product carrier newbuildings, two to be delivered in the
fourth quarter of 2001, three in 2002 and two in 2003 and two Panamax vessels to
be delivered in 2003.

LIQUIDITY AND CAPITAL RESOURCES

  Cash Flows

     Cash and cash equivalents of $29.6 million at September 30, 2001 decreased
$5.7 million from cash and cash equivalents of $35.3 million at December 31,
2000. The Company's working capital at September 30, 2001 decreased $20.9
million, which resulted in a deficit of $12.4 million. The deficit primarily
relates to scheduled debt payments over the next year for vessels recently
acquired which will be met by their time charter revenue. Net cash provided by
operating activities increased $65.5 million to $93.6 million for the nine
months ended September 30, 2001 compared to net cash provided by operating
activities of $28.1 million for the nine months ended September 30, 2000 (see
Results of Operations).

     Cash used by investing activities was $210.1 million for the nine months
ended September 30, 2001, compared to cash used by investing activities of $58.3
million for the nine months ended September 30, 2000. Cash was used during the
nine months ended September 30, 2001 primarily for additions to vessels of
$277.1 million. The following vessels were acquired, and payments for vessels on
order were made in 2001: acquired a Suezmax vessel in January paid cash of $55.5
million (excluding the deposit made in

                                       27


<PAGE>


2000), acquired three secondhand product carriers in February and March for
$22.7 million cash ($18.6 million was paid in OMI stock), paid $19.2 million
cash ($28.3 million was paid in OMI stock) for two Suezmax newbuilding
contracts with 2002 deliveries, acquired a 2000 built product carrier in April
for $20.0 million cash ($9.0 million was paid in OMI stock), acquired two 1993
built handysize vessels for $27.6 million ($16.0 million was paid in OMI stock),
acquired one 2000 built and two 2001 built product carriers in September for
$92.4 million cash, paid a cash deposit of $3.0 million for a product carrier
delivered in October and paid cash for installment payments for nine vessels
under construction, aggregating $33.8 million. Other additions to vessels
included capitalized interest of approximately $2.5 million and capital
expenditures of approximately $0.4 million for vessels improvements and
office/computer equipment.

     The cash used for additions to vessels and other property for the nine
months ended September 30, 2000 of $105.6 million was primarily for capital
expenditures for the purchase of two new Suezmax vessels delivered in March and
May 2000 and a product carrier in September 2000.

     Proceeds of $77.3 million received for the disposal of vessels during the
nine months ended September 30, 2001, are for the Suezmax vessel sold in June
2001 and a product carrier sold in May 2001. Proceeds received in 2000 of $46.9
million were for the sale of the aframax vessel in March 2000 and the sale of
four product carriers, three in May 2000 and one in August 2000.

     Working capital needs have generally been met with cash flows from
operations. Cash for investing activities, such as acquisitions of vessels have
been provided by cash flow from operations, equity transactions and from
borrowings under credit agreements.

Outlook

     As previously mentioned in the Market Overview, world oil demand is
expected to increase only marginally in 2001 as a result of the world economic
slowdown in the second half of the year. With worldwide economies not likely to
improve during the next few quarters, tanker rates are likely to remain
generally weak.

     The Company continues to seek opportunities as they arise to time charter
vessels and secure extensions for current contracts at attractive rates to
maintain a secure stream of cash flows. As a hedge against weaker rates, OMI
began fixing more of its product carriers on time charters this year (four
vessels were fixed prior to 2001 and extensions for these vessels were
contracted for during 2001). Five of the vessels contracted on long-term time
charters have a flat time charter rate with profit sharing agreements (50%
profit sharing above the flat rate). In accordance with SEC Staff Accounting
Bulletin No. 101 Revenue Recognition in Financial Statements, OMI recognizes the
profit sharing or contingent revenue only after meeting a threshold, which is
the minimum yearly charter hire. In the third quarter of 2001, OMI recognized
$0.7 million in profit sharing from two vessels whose original time charter
periods expired in the quarter. The profit sharing from these vessels was
limited to $1,000 per day. The Company receives preliminary profit sharing after
six months. In October 2001, OMI received a preliminary profit sharing
distribution of over $1.0 million for a vessel whose time charter began in
April.

     The following reflects OMI's contracted or time charter revenue ("TC
revenue") through 2004. TC revenue below does not include profit sharing for the
five vessels eligible for profit sharing under their time charter agreements
(with the exception of profit sharing earned and recorded for two


                                       28


<PAGE>

vessels as of September 30, 2001), but does include OMI's projected requirements
for offhire relating to drydock.

In millions of dollars

                             2001     2002         2003            2004
                             ----     ----        -----            ----
TC revenue                   48.8     84.1         94.7            81.7
Number of Vessels (a)          14       17           18              (b)

(a)  Number of vessels at the end of each year. During 2003, two time charters
     terminate and two newbuildings to be delivered begin time charters.

(b)  18 vessels operate on time charters in 2004, 9 vessels complete time
     charter contracts during the year.

     TC revenue is the amount contracted to date and does not include
projections other than for expected delivery dates of newbuildings and offhire
relating to drydock. Eleven vessels were on time charters as of September 30,
2001 (three of which began in mid-September 2001). Six newbuildings (with
delivery dates ranging from October 12, 2001 to March 1, 2003) will begin time
charters at delivery.

     The Company has completed the drydock of five vessels during 2001,
including the ULCC, three product carriers and one Panamax vessel. OMI expects
to drydock one more vessel, a Panamax, in the fourth quarter for approximately
60 days. The estimated cost of the 2001 drydocks to date is approximately $5.3
million, and the costs will amortize over approximately 2.5 years.

     Capital expenditures relating to the delivery of three vessels,
construction in progress payments and capitalized interest is projected at
approximately $87.5 million in the fourth quarter of 2001. Capital expenditures
relating to the delivery of five vessels currently under construction and the
purchase of the COLUMBIA (a leased vessel), construction in progress payments
for vessels delivering in 2003 and capitalized interest is projected at
approximately $182.4 million in 2002. OMI expects to drydock approximately 11
vessels (three products on spot, three products on time charter, two handysize
crude oil vessels on time charter, a Panamax and two Suezmaxes on spot) in 2002
at an estimated aggregate cost of $6.4 million. Offhire relating to drydock
could range from 24 to 30 days for each vessel drydocked.

     The Company plans to fund capital expenditures relating to drydocks from
cash provided by operating activities. Capital expenditures relating to
acquisition of assets may be funded in part by operating cash, debt and other
sources (see Financing Activities). In addition, the Company may dispose of
vessels to use cash generated from sales to purchase assets that are of greater
strategic value to the Company.

Financing Activities

     Cash provided by financing activities was $110.8 million for the nine
months ended September 30, 2001, compared to cash provided by financing
activities of $46.4 million for the nine months ended September 30, 2000.
Proceeds of $213.4 million were received to finance the acquisition of ten
vessels (including one which was sold during May 2001 and $23.0 million of which
was refinanced in July) and nine construction in progress payments at
approximately 65%. OMI received $50.0 million in proceeds during the nine months
ended September 30, 2000; $20.0 million to purchase the handymax in September
2000, $3.0 million towards the purchase the joint venture and $27.0 million of
such borrowings used for the purchase of the new Suezmax vessel in March 2000.

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<PAGE>



     During the nine months ended September 30, 2001 we paid debt of $97.3
million; $32.2 million in scheduled principal payments and $65.1 million in
unscheduled payments ($37.7 million was paid upon the sale of a vessel in June
2001, $23.0 million was refinanced in July 2001 and $4.4 million of OMI's senior
unsecured Notes were repurchased in August 2001). During the nine months ended
September 30, 2000, we paid $24.4 million in debt; $9.2 million in scheduled
principal payments and $15.2 million for the repayment of debt upon the sale of
vessels. In February 2000, the bank debt was refinanced (later amended on
October 12, 2000) in the amount of $264.5 million, which resulted in payments of
$257.9 million on debt related to the refinancing.

     On July 27, 2001, OMI closed on a six year $348.0 million reducing
revolving credit facility (the "Facility"). The Facility has been and will be
used to provide up to 65 percent financing of (i) pre-delivery installments, and
final payments at delivery on eleven new building vessels with deliveries
scheduled through the first quarter of 2003 (ii) acquisition financing and
refinancing of four second hand vessels purchased in the first half of 2001
(iii) the exercise of the $45.0 million purchase option on the COLUMBIA
(following its sale and lease back to OMI for three years in 1999) and (iv) for
general corporate purposes up to the applicable available amount under the
Facility. The Facility includes interest rate margins similar to existing credit
facilities based on a pricing ratio grid (currently 125 basis points over LIBOR)
and contains similar covenants. The Company will pay an additional margin of 25
basis points up to September 30, 2002, which will then be reduced to 12.5 basis
points from October 1, 2002 to March 31, 2003. The availability under the
Facility reduces quarterly based on a 17-year amortization schedule from
delivery of the vessels until September 2003, and thereafter $7.46 million per
quarter until July 27, 2007 at which time the entire Facility is due. At
September 30, 2001, the amount drawn under this Facility was $116.4 million.

     In January 2001, the Company obtained a $35.0 million term loan to
partially finance the delivery of a Suezmax newbuilding. The loan is to be
repaid in 16 consecutive semi-annual installments, the first four in the amount
of $1.67 million each, and the next 12 in the amount of $1.17 million each, with
a balloon payment in the amount of $14.28 million due and payable together with
the last installment. The outstanding balance of the loan bears interest at
LIBOR plus an applicable margin based on OMI's ratio of consolidated funded debt
to consolidated adjusted EBITDA on a trailing four quarter basis. At September
30, 2001, the outstanding loan balance was $33.3 million and applicable margin
was 1.25%.

     On March 1, 2001 the Company obtained a credit facility of $23.0 million to
finance the purchase of three product carriers acquired in February and March
2001. The loan was repaid on August 13, 2001 and two of the three vessels (one
vessel was sold in May 2001) was refinanced as part of the Facility described
above.

     In April 2001 the Company obtained a $19.0 million term loan to partially
finance the purchase of a 2000 built product carrier delivered on April 25,
2001. The loan is to be repaid in 14 consecutive semi-annual installments, the
first four in the amount of $1.25 each, and the next 10 in the amount of $0.75
million each, with a balloon payment in the amount of $6.5 million due and
payable together with the last installment. The outstanding balance of the loan
bears interest at LIBOR plus an applicable margin based on OMI's ratio of
consolidated funded debt to consolidated adjusted EBITDA on a trailing four
quarter basis. At September 30, 2001, the outstanding loan balance was $19.0
million and applicable margin was 1.25%.


                                       30


<PAGE>

     In September 2001, the Company obtained an eight year $40.0 million term
loan to partially finance the purchase of two product carrier newbuildings, one
of which was delivered September 10, 2001 and the other on October 12, 2001. The
loan is split into two $20.0 million tranches. The loan for each tranche is to
be repaid beginning three months after the final drawdown in 32 consecutive
quarterly installments, the first 20 in the amount of $0.45 million each and the
next 12 in the amount of $0.35 million each, with a balloon payment in the
amount of $6.8 million due and payable together with the last installment. The
outstanding balance of the loan bears interest at LIBOR plus an applicable
margin will be based on OMI's ratio of consolidated funded debt to consolidated
adjusted EBITDA on a trailing four quarter basis, with the exception of the
first six months which is fixed at 1.25%.


Restrictive Covenants

     All loan agreements contain restrictive covenants as to working capital,
net worth, maintenance of specified financial ratios and collateral values. They
restrict the Company's ability to make certain payments, such as dividends and
repurchase of its stock. Pursuant to the loan agreements liens against specific
assets were granted and other liens against those assets were prohibited. As of
September 30, 2001, the Company was in compliance with its covenants.

Other Commitments

     During September 2001, OMI agreed to acquire two 37,000 dwt product
carriers currently under construction for approximately $30.0 million each. OMI
has secured financing of $22.0 million for each vessel upon delivery. The
vessels will commence three-year time charters upon delivery in December 2001
and March 2002.

     During June 2001, OMI agreed to construct two 70,100 dwt product carriers
for $36.7 million each. Deliveries of these vessels are expected in April and
May of 2003.

     During April 2001, OMI agreed to acquire a 37,000 dwt product carrier,
which is under construction for $30.5 million. Upon delivery in November 2001,
the vessel will commence a three-year time charters.

     During November 2000, OMI contracted to purchase a 47,000 dwt product
tanker at an approximate cost of $28.8 million to be delivered in February 2002
from a Japanese shipyard. In January, March and June 2001, OMI exercised options
to purchase three 47,000 dwt product carriers at an approximate aggregate cost
of $87.5 million to be delivered from the same shipyard in March 2002 and
February and March 2003. The vessels on order will commence three-year time
charters upon delivery.

     On April 25, 2001, OMI took delivery of one 35,000 dwt product carrier
built in 2000. The purchase price of $29.0 million was paid in cash (financed
$19.0 million) and stock. The Company issued 1,125,000 shares of common stock at
$8.00 per share as partial payment for the vessel. Since the average of the
closing prices for 120 trading days following registration was less than $8.00
per share, OMI was obligated to pay $2.25 million in October 2001.

     During February 2001, OMI agreed to purchase two Suezmax vessels under
construction by another owner for 2002 delivery for $53.8 million each.

     The sale/leaseback of the COLUMBIA on June 30, 1999 resulted in a three
year operating lease with the purchaser. The Company is responsible for

                                       31

<PAGE>


operating expenses of the vessel and is required to maintain $2.0 million in
escrow over the lease term, and a cash collateral account initially of $4.0
million. The cash collateral account was replaced by a stand by letter of credit
in September 1999, which increased by $0.75 million per quarter in the first
year and by $0.50 million per quarter in the second year to a maximum of $9.0
million. The letter of credit serves as additional collateral for the Company's
obligation under the lease. The Company also has guaranteed a minimum resale or
residual value for the COLUMBIA. At September 30, 2001, the impact of the
guarantee is not expected to be material. The Company provides cash collateral
in an amount at least equal to the amount of the letter of credit to secure its
obligations to the bank providing the letter of credit.

     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, are of such nature that the ultimate liability, if any, would not
have a material adverse effect on the consolidated financial statements.

Recent Accounting Developments

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended in June 2000 by Statement of Financial Accounting
Standards No. 138 ("SFAS 138"), "Accounting for Certain Derivative Instruments
and Certain Hedging Activities," which requires companies to recognize all
derivatives as either assets or liabilities in the balance sheet and measure
such instruments at fair value. The provisions of SFAS 133 were adopted by the
Company as of January 1, 2001, and did not have a material impact on the
Company's results of operations or financial position. At September 30, 2001, we
have recorded a liability of $2.9 million related to the fair values of our
interest rate swaps and a charge correspondingly to Other Comprehensive Income.

     During 2001, FASB issued four statements, which are summarized as follows:

     SFAS 141, "Business Combinations" addresses financial accounting and
reporting for business combinations. It requires all business combinations
covered by the scope of the Statement to be accounted for using the purchase
method. It is effective for business combinations initiated after June 30, 2001
and business combinations completed July 1, 2001 and later which use the
purchase method of accounting. The Company has no pending business combinations
which would be impacted by this statement. The requirements of this statement
would need to be considered in any business combination contemplated in the
future.

     SFAS 142, "Goodwill and Other Intangible Assets" addresses financial
accounting and reporting for goodwill and other intangible assets. SFAS No. 142
discontinues the practice of amortizing goodwill and indefinite lived intangible
assets and initiates an annual review for impairment. Impairment would be
examined more frequently if certain indicators were encountered. Intangible
assets with a determinable useful life will continue to be amortized over that
period. The amortization provisions shall be applied to fiscal years beginning
after December 15, 2001 to all goodwill and intangible assets except that, these
provisions presently apply to goodwill and intangible assets acquired after June
30, 2001. The Company did not have goodwill or intangible assets on the books as
of September 30, 2001 and therefore expects no impact on the financial
statements.

                                       32


<PAGE>

     SFAS 143, "Accounting for Asset Retirement Obligations" was issued in June
2001. This statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. This Statement is effective for financial
statements issued for fiscal years beginning after June 15, 2002. The Company
has not yet determined the impact, if any, that the adoption of this statement
will have on the Company's results of operations or financial position.

     SFAS 144, "Accounting for the Impairment or Disposal of Long-lived Assets"
was issued in October 2001. SFAS 144 replaces FASB Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-lived Assets to
Be Disposed Of." SFAS 144 requires that those long-lived assets be measured at
the lower of carrying amount or fair value less cost to sell, whether reported
in continuing operations or in discontinued operations. Therefore, discontinued
operations will no longer be measured at net realizable value or include amounts
for operating losses that have not yet occurred.

     SFAS 144 also broadens the reporting of discontinued operations to include
all components of an entity with operations that can be distinguished from the
rest of the entity and that will be eliminated from the ongoing operations of
the entity in a disposal transaction. The provisions of SFAS 144 are effective
for financial statements issued for fiscal years beginning after December 15,
2001 and are to be applied prospectively. The Company has not yet determined the
impact, if any, that the adoption of this statement will have on the Company's
results of operations or financial position.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

 Market Risk

     The following information about the Company's market sensitive financial
instruments constitutes a "forward-looking statement." The Company's major
market risk exposure is changing interest rates. The majority of the OMI's debt
was floating rate debt at September 30, 2001 and December 31, 2000. At September
30, 2001, the floating rate debt was $431.0 million of the $432.6 million total
debt ($175.0 million of which was fixed with interest rate swaps in October
2001), and at December 31, 2000, the floating rate debt was $310.0 million of
the $316.6 million total debt. Based on the floating rate debt at September 30,
2001, a one-percentage point increase in the floating interest rate would
increase interest expense by $4.3 million per year.

     The fixed rate debt on the balance sheet and the fair market value were
$1.6 million as of September 30, 2001, and $6.6 million as of December 31, 2000.
Based on the fixed rate debt at September 30, 2001, if interest rates were to
increase (decrease) by one percent with all other variables remaining constant,
the market value of the fixed rate debt would have an immaterial change.

     The Company's policy is to manage interest rate risk through the use of
interest rate derivatives based upon market conditions. OMI uses interest rate
swaps, which are entered into with a group of financial institutions with
investment grade credit ratings, thereby minimizing the risk of credit loss.

     The Company uses interest rate swap agreements to manage the impact of
interest rate changes on borrowings under the Company's variable rate credit
facilities. As of December 31, 2000, the Company had no derivatives hedging
corporate debt. The Company has entered into certain

                                       33

<PAGE>

interest rate derivative transactions with certain financial institutions to
manage the impact of interest rate changes on variable rate debt beginning in
October 2001. These derivative transactions consist of two interest rate swaps
in which the Company will pay fixed-rate interest payments, at 4.77% and 4.86%,
and will receive floating-rate interest amounts based on three month LIBOR
settings covering notional amounts of $60 million and $115.0 million,
respectively, for a term equal to the swaps' reset periods. These agreements
have maturity dates of October 2004 and October 2005.

                                       34

<PAGE>



                           PART II: OTHER INFORMATION

Item 1 - Legal Proceedings

           None.

Item 2 - Changes in Securities

           None.

Item 3 - Defaults upon Senior Securities

           None.

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

           None.

Item 5 - Other Information

           None.

Item 6 - Exhibit and Reports on Form 8-K

  a. Exhibits

     4.8 Registration Statement on Form S-8 (No.333-72458) filed October 30,
2001 for the OMI Corporation 401(K) Retirement Savings Plan.

     4.9 Registration Statement of Form S-8 (No.333-72456) filed October 30,
2001 for the 2001 Restricted Stock Plan.

     4.10 Registration Statement on Form S-8 (No.333-72460) filed October 30,
2001 for the OMI Corporation Executive Savings Plan.

  b. Reports on Form 8-K

           None.


                                       35

<PAGE>


                                   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:   NOVEMBER 14, 2001                  By: /s/ CRAIG H. STEVENSON, JR.
       -------------------------------         ---------------------------
                                               Craig H. Stevenson, Jr.
                                               President, Chairman of the Board
                                               and Chief Executive Officer




Date:   NOVEMBER 14, 2001                  By: /s/ KATHLEEN C. HAINES
       -------------------------------         ---------------------------
                                               Kathleen C. Haines
                                               Senior Vice President,
                                               Chief Financial Officer
                                               and Treasurer


                                       36