UNITED STATES SECURITIES AND EXCHANGE
                                   COMMISSION
                             Washington, D.C. 20549
                                    FORM 20-F
(Mark One)

[_]           REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

[X]               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2006

                                       OR

[_]             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the transition period from ___ to ____

                                       OR

[_]          SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

             Date of event requiring this shell company report: N/A

                         Commission file number 00113944

                     NORDIC AMERICAN TANKER SHIPPING LIMITED
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             (Exact name of Registrant as specified in its charter)

                                     BERMUDA
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                 (Jurisdiction of incorporation or organization)

              LOM Building, 27 Reid Street, Hamilton HM 11, Bermuda
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                    (Address of principal executive offices)

Securities registered or to be registered pursuant to section 12(b) of the Act.


                     Common Stock par value $0.01 per share
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Securities registered or to be registered pursuant to section 12(g) of the Act.

                                      NONE
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Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

                                      NONE
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Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the Annual
Report.

         26,914,088 shares of Common Stock, par value $0.01 per share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act

                        Yes [X]       No [_]

If this report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.

                        Yes [_]        No [X]

Note- Checking the box above will not relieve any registrant required to file
reports pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934
for their obligations under those Sections.

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 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 by check mark whether registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of accelerated
filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer [X]   Accelerated filer [_]   Non-accelerated filer  [_]
|

Indicate by check mark which financial statement item the registrant has elected
to follow.

                        Item 17 [_]    Item 18  [X]

If this is an Annual Report, indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act).

                        Yes [ ]        No [X]


<PAGE>

Item 1. Identity of Directors, Senior Management and Advisers...............5
Item 2. Offer Statistics And Expected Timetable.............................5
Item 3. Key Information.....................................................5
     A.  Selected Financial Data............................................5
     B.  Capitalization And Indebtedness....................................8
     C.  Reasons For The Offer And Use Of Proceeds..........................8
     D.  Risk Factors.......................................................8
Item 4. Information On The Company.........................................16
     A.  History And Development Of The Company............................16
     B.  Business Overview.................................................16
     C.  Organizational Structure..........................................31
     D.  Property, Plant And Equipment.....................................31
Item 5. Operating And Financial Review And Prospects.......................31
     B.  Liquidity and Capital Resources...................................34
     C.  Research and Development, Patents and Licenses, Etc...............35
     D.  Trend Information.................................................35
     E.  Off Balance Sheet Arrangements....................................35
     F.  Disclosure Of Contractual Obligations.............................35
Item 6. Directors, Senior Management And Employees.........................38
     A.  Directors And Senior Management...................................38
     B.  Compensation......................................................40
     C.  Board Practices...................................................41
     D.  Employees.........................................................41
     E.  Share Ownership...................................................41
Item 7. Major Shareholders And Related Party Transactions..................42
     A.  Major Shareholders................................................42
     B.  Related Party Transactions........................................42
     C.  Interests Of Experts And Counsel..................................42
Item 8. Financial Information..............................................42
     A.  Consolidated Statements And Other Financial Information...........42
     B.  Significant Changes...............................................43
Item 9. The Offer And Listing..............................................43
Item 10.Additional Information.............................................44
     A.  Share Capital.....................................................44
     B.  Memorandum And Articles Of Association............................44
     C.  Material Contracts................................................46
     D.  Taxation..........................................................47
     E.  Dividends And Paying Agents.......................................47
     F.  Statement By Experts..............................................47
     G.  Documents On Display..............................................47
     H.  Subsidiary Information............................................48
Item 11.Quantitative And Qualitative Disclosures About Market Risk.........48
Item 12.Description Of Securities Other Than Equity Securities.............48
Item 13.Defaults, Dividend Arrearages And Delinquencies....................48
Item 14.Material Modifications To The Rights Of Security Holders And
                Use Of Proceeds............................................48
Item 15.Controls And Procedures............................................49
Item 16.Reserved...........................................................50
     Item 16A.  Audit Committee Financial Expert...........................50
     Item 16B.  Code Of Ethics.............................................50
     Item 16C.  Principal Accountant Fees And Services.....................50
     Item 16D.  Exemptions From The Listing Standards For Audit
                        Committees.........................................51
     Item 16E.  Purchases Of Equity Securities By The Issuer
                        And Affiliated Persons.............................51
Item 17.Financial Statements...............................................51
Item 18.Financial Statements...............................................51

<PAGE>
            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

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


Please note in this annual report,  "we", "us",  "our",  and "The Company",  all
refer to Nordic American Tanker Shipping Limited. ITEM 1.

<PAGE>



ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

         Not Applicable

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

         Not Applicable

ITEM 3.  KEY INFORMATION

A.   SELECTED FINANCIAL DATA

     The  following   historical   financial   information  should  be  read  in
conjunction with our audited financial statements and related notes all of which
are included  elsewhere in this document and "Operating and Financial Review and
Prospects."  The statement of operations  data for each of the three years ended
December 31, 2006, 2005, and 2004 and selected balance sheet data as of December
31, 2006 and 2005 are derived  from our audited  financial  statements  included
elsewhere in this document. The statements of operations data for the year ended
December 31, 2003 and selected  balance sheet data for the years ended  December
31, 2004 and 2003 are derived from our audited financial statements not included
in this document.


<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
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All figures in '000 USD except share data                            2006         2005         2004         2003        2002
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>          <C>           <C>          <C>         <C>
Voyage revenue                                                    175,520      117,110       67,452       37,371      18,058
Voyage expenses                                                  (40,172)     (30,981)      (4,925)        (185)       (185)
Vessel operating expense -
excl. depreciation expense presented below                       (21,102)     (11,221)      (1,977)            -           -
General & administrative expenses                                (12,750)      (8,492)     (10,852)        (468)     (6,831)
Depreciation                                                     (29,254)     (17,529)      (6,918)      (6,831)
-----------------------------------------------------------------------------------------------------------------------------
Net operating income                                               72,242       48,887       42,780       29,887      10,615
-----------------------------------------------------------------------------------------------------------------------------
Interest income                                                     1,602          850          143           26          21
Interest expense                                                  (6,339)      (3,454)      (1,971)      (1,798)     (1,764)
Other financial (expense) income                                    (112)           34        (136)         (15)        (25)
-----------------------------------------------------------------------------------------------------------------------------
Total other expenses                                              (4,849)      (2,570)      (1,964)      (1,787)     (1,768)
-----------------------------------------------------------------------------------------------------------------------------
Net income for the year                                            67,393       46,317       40,816       28,100       8,847
=============================================================================================================================

Basic and diluted earnings per share                                 3.14         3.03         4.05         2.89        0.91
Cash dividends declared per share                                    5.85         4.21         4.84         3.05        1.35
Weighted average shares outstanding basic and diluted
                                                               21,476,196   15,263,622   10,078,391    9,706,606   9,706,606

Other financial data:
Net cash from operating activities                                106,613       51,056       62,817       29,894      12,751
Dividend paid                                                     122,590       64,279       47,196       29,605      13,104

Selected Balance Sheet Data (at period end):
Cash and cash equivalents                                          11,729       14,240       30,733          566         278
Total assets                                                      800,180      505,844      224,203      136,896     138,580
Total debt                                                        173,500      130,000            0       30,000      30,000
Capital stock                                                         269          166          131           97          97
Shareholders' equity                                              611,946      370,872      221,868      105,708     106,347

</TABLE>

<PAGE>



B.   CAPITALIZATION AND INDEBTEDNESS

         Not Applicable

C.   REASONS FOR THE OFFER AND USE OF PROCEEDS

         Not Applicable

D.   RISK FACTORS

     Some of the following risks relate principally to the industry in which we
operate and our business in general. Other risks relate principally to the
securities market and ownership of our common stock. The occurrence of any of
the events described in this section could significantly and negatively affect
our business, financial condition, operating results or cash available for
dividends or the trading price of our common stock.

                         Industry Specific Risk Factors

The  cyclical  nature of the tanker  industry  may lead to  volatile  changes in
charter rates and vessel values which may adversely affect our earnings.

     If the tanker market, which has been cyclical, is depressed in the future,
our earnings and available cash flow may decrease. Our ability to recharter our
vessels or to sell them on the expiration or termination of their charters and
the charter rates payable under our two spot market related time charters, our
spot charters, or any renewal or replacement charters, will depend upon, among
other things, economic conditions in the tanker market. Fluctuations in charter
rates and tanker values result from changes in the supply and demand for tanker
capacity and changes in the supply and demand for oil and oil products.

     The factors affecting the supply and demand for tankers are outside of our
control, and the nature, timing and degree of changes in industry conditions are
unpredictable.

     The factors that influence demand for tanker capacity include:

     o    demand for oil and oil products,

     o    supply of oil and oil products,

     o    regional availability of refining capacity,

     o    global and regional economic conditions,

     o    the distance oil and oil products are to be moved by sea, and

     o    changes in seaborne and other transportation patterns.

      The factors that influence the supply of tanker capacity include:

     o    the number of newbuilding deliveries,

     o    the scrapping rate of older vessels,

     o    conversion of tankers to other uses,

     o    the number of vessels that are out of service, and

     o    environmental concerns and regulations.

     Historically, the tanker markets have been volatile as a result of the many
conditions and factors that can affect the price, supply and demand for tanker
capacity. Changes in demand for transportation of oil over longer distances and
supply of tankers to carry that oil may materially affect our revenues,
profitability and cash flows. Eleven of our twelve vessels are currently
operated in the spot market or on spot market related time charters. If spot
charter rates decline, we may be unable to achieve a level of charterhire
sufficient for us to operate our vessels profitably.

We will be dependent on spot charters and any decrease in spot charter rates in
the future may adversely affect our earnings and our ability to pay dividends.

     We currently operate a fleet of twelve vessels. Of those twelve vessels,
one is on a long term fixed-rate charter, while the other eleven are employed in
the spot market or on time charters with spot market related rates. Therefore we
are highly dependent on spot market charter rates.

     We may enter into spot charters for any additional vessels that we may
acquire in the future. Although spot chartering is common in the tanker
industry, the spot charter market may fluctuate significantly based upon tanker
and oil supply and demand. The successful operation of our vessels in the spot
charter market depends upon, among other things, obtaining profitable spot
charters and minimizing, to the extent possible, time spent waiting for charters
and time spent traveling unladen to pick up cargo. The spot market is very
volatile, and, in the past, there have been periods when spot rates have
declined below the operating cost of vessels. If future spot charter rates
decline, then we may be unable to operate our vessels trading in the spot market
profitably and to pay dividends.

     Normally, tanker markets are stronger in the fall and winter months (the
fourth and first quarters of the calendar year) in anticipation of increased oil
consumption in the northern hemisphere during the winter months. Unpredictable
weather patterns and variations in oil reserves disrupt tanker scheduling.
Seasonal variations in tanker demand and, as a result, in charter rates will
affect any spot market related rates that we may receive.

Compliance with safety, environmental and other governmental and other
requirements may increase our operating costs or require significant capital
expenditures and therefore adversely affect our business.

     The shipping industry is affected by numerous regulations in the form of
international conventions, national, state and local laws and national and
international regulations in force in the jurisdictions in which such tankers
operate, as well as in the country or countries in which such tankers are
registered. These regulations include the U.S. Oil Pollution Act of 1990, or
OPA, the International Convention on Civil Liability for Oil Pollution Damage of
1969, the International Convention for the Prevention of Pollution from Ships,
the IMO International Convention for the Safety of Life at Sea of 1974, or
SOLAS, the International Convention on Load Lines of 1966 and the U.S. Marine
Transportation Security Act of 2002, each of which imposes environmental,
technical, safety, operational or financial requirements on us. In addition,
vessel classification societies also impose significant safety and other
requirements on our vessels. Regulation of vessels, particularly in the areas of
safety and environmental impact may change in the future and may limit our
ability to operate our business or require significant capital expenditures be
incurred on our vessels to keep them in compliance.

The value of our vessels may fluctuate and any decrease in the value of our
vessels could result in a lower price of our common shares.

     Tanker values have generally experienced high volatility. You should expect
the market value of our oil tankers to fluctuate, depending on general economic
and market conditions affecting the tanker industry and competition from other
shipping companies, types and sizes of vessels, and other modes of
transportation. In addition, as vessels grow older, they generally decline in
value. These factors will affect the value of our vessels. Declining tanker
values could affect our ability to raise cash by limiting our ability to
refinance our vessels, thereby adversely impacting our liquidity, or result in a
breach of our loan covenants, which could result in defaults under our $500
million revolving credit facility, or the 2005 Credit facility. Under the 2005
Credit Facility, we are required to maintain equity, defined as total assets
less total debt, of at least $150.0 million. If we determine at any time that a
vessel's future limited useful life and earnings require us to impair its value
on our financial statements, that could result in a charge against our earnings
and the reduction of our shareholders' equity. Due to the cyclical nature of the
tanker market, if for any reason we sell vessels at a time when tanker prices
have fallen, the sale may be at less than the vessel's carrying amount on our
financial statements, with the result that we would also incur a loss and a
reduction in earnings. Any such reduction could result in a lower share price.

We operate our vessels worldwide and as a result, our vessels are exposed to
international risks which could reduce revenue or increase expenses.

     The international shipping industry is an inherently risky business
involving global operations. Our vessels are at risk of damage or loss because
of events such as mechanical failure, collision, human error, war, terrorism,
piracy, cargo loss and bad weather. In addition, changing economic, regulatory
and political conditions in some countries, including political and military
conflicts, have from time to time resulted in attacks on vessels, mining of
waterways, piracy, terrorism, labor strikes and boycotts. These sorts of events
could interfere with shipping routes and result in market disruptions which may
reduce our revenue or increase our expenses.

Terrorist attacks, such as the attacks on the United States on September 11,
2001, and other acts of violence or war may affect the financial markets and our
business, results of operations and financial condition.

     Terrorist attacks such as the attacks in the United States on September 11,
2001 and the United States' continuing response to these attacks, the attacks in
London on July 7, 2005, as well as the threat of future terrorist attacks,
continue to cause uncertainty in the world financial markets, including the
energy markets. The continuing conflict in Iraq may lead to additional acts of
terrorism, armed conflict and civil disturbance around the world, which may
contribute to further instability including in the oil markets. Terrorist
attacks, such as the attack on the M.T. Limburg in Yemen in October 2002, may
also negatively affect our trade patterns or other operations and directly
impact our vessels or our customers. Future terrorist attacks could result in
increased volatility of the financial markets in the United States and globally
and could result in an economic recession in the United States or the world. Any
of these occurrences could have a material adverse impact on our operating
results, revenue and costs.

Arrests of our vessels by maritime claimants could cause a significant loss of
earnings for the related off-hire period.

     Crew members, suppliers of goods and services to a vessel, shippers of
cargo and other parties may be entitled to a maritime lien against a vessel for
unsatisfied debts, claims or damages. In many jurisdictions, a maritime
lienholder may enforce its lien by "arresting" or "attaching" a vessel through
foreclosure proceedings. The arrest or attachment of one or more of our vessels
could result in a significant loss of earnings for the related off-hire period.
In addition, in jurisdictions where the "sister ship" theory of liability
applies, a claimant may arrest the vessel which is subject to the claimant's
maritime lien and any "associated" vessel, which is any vessel owned or
controlled by the same owner. In countries with "sister ship" liability laws,
claims might be asserted against us or any of our vessels for liabilities of
other vessels that we own.

Governments could requisition our vessels during a period of war or emergency,
resulting in a loss of earnings.

     A government could requisition for title or seize our vessels. Requisition
for title occurs when a government takes control of a vessel and becomes its
owner. Also, a government could requisition our vessels for hire. Requisition
for hire occurs when a government takes control of a vessel and effectively
becomes its charterer at dictated charter rates. Although we, as owner, would be
entitled to compensation in the event of a requisition, the amount and timing of
payment would be uncertain.

                          Company Specific Risk Factors

We operate in a cyclical and volatile industry and cannot guarantee that we will
continue to make cash distributions.

     We have made cash distributions quarterly since October 1997. It is
possible that our revenues could be reduced as a result of decreases in charter
rates or that we could incur other expenses or contingent liabilities that would
reduce or eliminate the cash available for distribution as dividends. The 2005
Credit Facility prohibits the declaration and payment of dividends if we are in
default under it. We refer you to Item 4--Information on the Company--Business
Overview--Our Credit Facility for more details. In addition, the declaration and
payment of dividends is subject at all times to the discretion of our Board of
Directors and compliance with Bermuda law, and may be dependent upon the
adoption at the annual meeting of shareholders of a resolution effectuating a
reduction in our share premium in an amount equal to the estimated amount of
dividends to be paid in the next succeeding year. We refer you to Item
8--Financial Information--Dividend Policy for more details. We cannot assure you
that we will pay dividends at rates previously paid or at all.

If we do not identify suitable tankers for acquisition or successfully integrate
any acquired tankers, we may not be able to grow or to effectively manage our
growth.

     One of our principal strategies is to continue to grow by expanding our
operations and adding to our fleet. Our future growth will depend upon a number
of factors, some of which may not be within our control. These factors include
our ability to:

     o    identify suitable tankers and/or shipping companies for acquisitions,

     o    identify businesses engaged in managing, operating or owning tankers
          for acquisitions or joint ventures,

     o    integrate any acquired tankers or businesses successfully with our
          existing operations,

     o    hire, train and retain qualified personnel and crew to manage and
          operate our growing business and fleet,

     o    identify additional new markets,

     o    improve our operating, financial and accounting systems and controls,
          and

     o    obtain required financing for our existing and new operations.

     Our failure to effectively identify, purchase, develop and integrate any
tankers or businesses could adversely affect our business, financial condition
and results of operations. In addition, in November 2004, we transitioned from a
bareboat charter company to an operating company. We may incur unanticipated
expenses as an operating company. The number of employees of Scandic American
Shipping Ltd., or the Manager, that perform services for us and our current
operating and financial systems may not be adequate as we implement our plan to
expand the size of our fleet, and we may not be able to require the Manager to
hire more employees or adequately improve those systems.

Investor confidence and the market price of our common stock may be adversely
impacted if we are unable to comply with Section 404 of the Sarbanes Oxley Act
of 2002.

     We have incurred and will continue to incur expenses associated with
compliance with the Sarbanes-Oxley Act of 2002. Section 404 of that Act requires
public companies include in annual reports a report containing management's
assessment of the effectiveness of the Company's internal control over financial
reporting and a related attestation of the Company's independent auditors. This
requirement applies to us with respect to the fiscal year ending December 31,
2006. We have implemented comprehensive compliance procedures in order to meet
the requirements of Section 404, including the documentation, testing and review
of our internal controls under the direction of our management. We cannot be
certain at this time that all our controls will continue to be considered
effective. Therefore, we can give no assurances that our internal control over
financial reporting will continue to satisfy the new regulatory requirements. If
our independent auditor is unable to provide us with an unqualified attestation
report on a timely basis as required by Section 404, investors could lose
confidence in the reliability of our financial statements, which could result in
a decrease in the value of our common stock. Finally, acquisitions may require
additional equity issuances or debt issuances (with amortization payments), both
of which could lower dividends per share. If we are unable to execute the points
noted above, our financial condition and dividend rates may be adversely
affected.

We are dependent on the Manager and there may be conflicts of interest arising
from the relationship between our Chairman and the Manager.

     Our success depends to a significant extent upon the abilities and efforts
of the Manager and our management team. Our success will depend upon our and the
Manager's ability to hire and retain key members of our management team. The
loss of any of these individuals could adversely affect our business prospects
and financial condition. Difficulty in hiring and retaining personnel could
adversely affect our results of operations. We do not maintain "key man" life
insurance on any of our officers.

     A company owned 100% by Herbjorn Hansson, our Chairman, President and Chief
Executive Officer, is the owner of the Manager. Up until June 2007, one of our
directors was also an owner of the Manager. The Manager may engage in business
activities other than with respect to the Company. The fiduciary duty of a
director may compete with or be different from the interests of the Manager and
may create conflicts of interest in relation to that director's duties to the
Company. Under Bermuda law, non-Bermudians (other than spouses of Bermudians)
may not engage in any gainful occupation in Bermuda without an appropriate
governmental work permit. Work permits may be granted or extended by the Bermuda
government upon showing that, after proper public advertisement in most cases,
no Bermudian (or spouse of a Bermudian) is available who meets the minimum
standard requirements for the advertised position. In 2001, the Bermuda
government announced a new policy limiting the duration of work permits to six
years, with certain exemptions for key employees. We may not be able to use the
services of one or more of our key employees in Bermuda if we are not able to
obtain work permits for them, which could have a material adverse effect on our
business.

 An increase in operating costs could adversely affect our cash flow and
financial condition.

     Under the original bareboat charters to BP Shipping, BP Shipping was
responsible for our vessels' operating and voyage costs. Under the time and spot
charters of eleven of our twelve vessels, we are responsible for many of such
costs. Our vessel operating expenses include the costs of crew, fuel (for spot
chartered vessels), provisions, deck and engine stores, insurance and
maintenance and repairs, which fuels depend on a variety of factors, many of
which are beyond our control. Some of these costs, primarily relating to
insurance and enhanced security measures implemented after September 11, 2001,
have been increasing. The price of fuel is near historical high levels and may
increase in the future. If our vessels suffer damage, they may need to be
repaired at a drydocking facility. The costs of drydock repairs are
unpredictable and can be substantial. Increases in any of these costs would
decrease earnings and dividends per share.

If we are unable to operate our vessels profitably, we may be unsuccessful in
competing in the highly competitive international tanker market.

     The operation of tanker vessels and transportation of crude and petroleum
products is extremely competitive. Competition arises primarily from other
tanker owners, including major oil companies as well as independent tanker
companies, some of whom have substantially greater resources. Competition for
the transportation of oil and oil products can be intense and depends on price,
location, size, age, condition and the acceptability of the tanker and its
operators to the charterers. We will have to compete with other tanker owners,
including major oil companies as well as independent tanker companies.

     Our market share may decrease in the future. We may not be able to compete
profitably as we expand our business into new geographic regions or provide new
services. New markets may require different skills, knowledge or strategies than
we use in our current markets, and the competitors in those new markets may have
greater financial strength and capital resources than we do.

Purchasing and operating secondhand vessels may result in increased operating
costs which could adversely affect our earnings and as our fleet ages, the risks
associated with older vessels could adversely affect our operations.

     Our current business strategy includes additional growth through the
acquisition of new and secondhand vessels. The twelfth vessel that we took
delivery of in early December 2006 is secondhand. While we typically inspect
secondhand vessels prior to purchase, this does not provide us with the same
knowledge about their condition that we would have had if these vessels had been
built for and operated exclusively by us. Generally, we do not receive the
benefit of warranties from the builders for the secondhand vessels that we
acquire.

     In general, the costs to maintain a vessel in good operating condition
increase with the age of the vessel. Older vessels are typically less
fuel-efficient than more recently constructed vessels due to improvements in
engine technology. Cargo insurance rates increase with the age of a vessel,
making older vessels less desirable to charterers.

     Governmental regulations, safety or other equipment standards related to
the age of vessels may require expenditures for alterations, or the addition of
new equipment, to our vessels and may restrict the type of activities in which
the vessels may engage. We cannot assure you that as our vessels age market
conditions will justify those expenditures or enable us to operate our vessels
profitably during the remainder of their useful lives.

Servicing debt which we may incur in the future would limit funds available for
other purposes and if we cannot service our debt, we may lose our vessels.

     Borrowing under the 2005 Credit Facility requires us to dedicate a part of
our cash flow from operations to paying interest on our indebtedness. These
payments limit funds available for working capital, capital expenditures and
other purposes, including making distributions to shareholders and further
equity or debt financing in the future. Amounts borrowed under the 2005 Credit
Facility bear interest at variable rates. Increases in prevailing rates could
increase the amounts that we would have to pay to our lenders, even though the
outstanding principal amount remains the same, and our net income and cash flows
would decrease. We expect our earnings and cash flow to vary from year to year
due to the cyclical nature of the tanker industry. In addition, our current
policy is not to accumulate cash, but rather to distribute our available cash to
shareholders. If we do not generate or reserve enough cash flow from operations
to satisfy our debt obligations, we may have to undertake alternative financing
plans, such as:

     o    seeking to raise additional capital,

     o    refinancing or restructuring our debt,

     o    selling tankers or other assets, or

     o    reducing or delaying capital investments.

     However, these alternative financing plans, if necessary, may not be
sufficient to allow us to meet our debt obligations. If we are unable to meet
our debt obligations or if some other default occurs under the Credit Facility,
the lenders could elect to declare that debt, together with accrued interest and
fees, to be immediately due and payable and proceed against the collateral
securing that debt, which constitutes our entire fleet and substantially all of
our assets.

Our 2005 Credit Facility contains restrictive covenants which may limit our
liquidity and corporate activities.

     The 2005 Credit Facility imposes operating and financial restrictions on
us. These restrictions may limit our ability to:

     o    pay dividends and make capital expenditures if we do not repay amounts
          drawn under the 2005 Credit Facility or if there is another default
          under the 2005 Credit Facility,

     o    incur additional indebtedness, including the issuance of guarantees,

     o    create liens on our assets,

     o    change the flag, class or management of our vessels or terminate or
          materially amend the management agreement relating to each vessel,

     o    sell our vessels,

     o    merge or consolidate with, or transfer all or substantially all our
          assets to, another person, or

     o    enter into a new line of business.

     Therefore, we may need to seek permission from our lenders in order to
engage in some corporate actions. Our lenders' interests may be different from
ours and we cannot guarantee that we will be able to obtain our lenders'
permission when needed. This may limit our ability to pay dividends to you,
finance our future operations or capital requirements, make acquisitions or
pursue business opportunities.

Shipping is an inherently risky business and our insurance may not be adequate
to cover all our losses.

     There are a number of risks associated with the operation of ocean-going
vessels, including mechanical failure, collision, human error, war, terrorism,
property loss, cargo loss or damage and business interruption due to political
circumstances in foreign countries, hostilities and labor strikes. Any of these
events may result in loss of revenues, increased costs and decreased cash flows.
In addition, the operation of any vessel is subject to the inherent possibility
of marine disaster, including oil spills and other environmental mishaps, and
the liabilities arising from owning and operating vessels in international
trade. We cannot assure investors that our insurance will protect us against all
risks. We may not be able to maintain adequate insurance coverage at reasonable
rates for our fleet in the future and the insurers may not pay particular
claims. For example, a catastrophic spill could exceed our insurance coverage
and have a material adverse effect on our financial condition. In the past, new
and stricter environmental regulations have led to higher costs for insurance
covering environmental damage or pollution, and new regulations could lead to
similar increases or even make this type of insurance unavailable. Furthermore,
even if insurance coverage is adequate to cover our losses, we may not be able
to timely obtain a replacement ship in the event of a loss. We may also be
subject to calls, or premiums, in amounts based not only on our own claim
records but also the claim records of all other members of the protection and
indemnity associations through which we receive indemnity insurance coverage for
tort liability. Our payment of these calls could result in significant expenses
to us which could reduce our cash flows and place strains on our liquidity and
capital resources.

Because some of our expenses are incurred in foreign currencies, we are exposed
to exchange rate risks.

     The charterers of our vessels pay us in U.S. dollars. While we incur most
of our expenses in U.S. dollars, we have in the past incurred expenses in other
currencies, most notably the Norwegian Kroner. Declines in the value of the U.S.
dollar relative to the Norwegian Kroner, or the other currencies in which we
incur expenses, would increase the U.S. dollar cost of paying these expenses and
thus would adversely affect our results of operations.

We may have to pay tax on United States source income, which would reduce our
earnings.

     Under the United States Internal Revenue Code of 1986, or the Code, 50% of
the gross shipping income of a vessel owning or chartering corporation, such as
ourselves, attributable to transportation that begins or ends, but that does not
both begin and end, in the U.S. will be characterized as U.S. source shipping
income and such income will be subject to a 4% United States federal income tax
unless that corporation is entitled to a special tax exemption under the Code
which applies to the international shipping income derived by certain non-United
States corporations. We believe that we currently qualify for this statutory tax
exemption and we will take this position for U.S. tax return reporting purposes.
However, there are several risks that could cause us to become taxed on our U.S.
source shipping income. Due to the factual nature of the issues involved, we can
give no assurances on our tax-exempt status.

     If we are not entitled to this statutory tax exemption for any taxable
year, we would be subject for any such year to a 4% United States federal income
tax on our U.S. source shipping income. The imposition of this tax could have a
negative effect on our business and would result in decreased earnings available
for distribution to our shareholders.

We may become subject to taxes in Bermuda after 2016.

     We have received a standard assurance from the Bermuda Minister of Finance,
under Bermuda's Exempted Undertakings Tax Protection Act 1966, that if any
legislation is enacted in Bermuda that would impose tax computed on profits or
income, or computed on any capital asset, gain or appreciation, or any tax in
the nature of estate duty or inheritance tax, then the imposition of any such
tax will not be applicable to us or to any of our operations or our shares,
debentures or other obligations until March 28, 2016. Consequently, if our
Bermuda tax exemption is not extended past March 28, 2016, we may be subject to
any Bermuda tax after that date.

     Given the limited duration of the Minister of Finance's assurance, we
cannot be certain that we will not be subject to any Bermuda tax after March 28,
2016. In the event that we become subject to any Bermuda tax after such date, it
would have a material adverse effect on our financial condition and results of
operations.

If U.S. tax authorities were to treat us as a "passive foreign investment
company," that could have adverse consequences on U.S. holders.

     A foreign corporation will be treated as a "passive foreign investment
company" for U.S. Federal income tax purposes if either (1) at least 75% of its
gross income for any taxable year consists of certain types of "passive income,"
or (2) at least 50% of the average value of the corporation's assets produce, or
are held for the production of, such types of "passive income". For purposes of
these tests, "passive income" includes dividends, interest, and gains from the
sale or exchange of investment property and rents and royalties other than rents
and royalties which are received from unrelated parties in connection with the
active conduct of trade or business. For purposes of these tests, income derived
from the performance of services does not constitute "passive income." Those
holders of stock in a passive foreign investment company who are citizens or
residents of the United States or domestic entities would alternatively be
subject to a special adverse U.S. Federal income tax regime with respect to the
income derived by the passive foreign investment company, the distributions they
receive from the passive foreign investment company and the gain, if any, they
derive from the sale or other disposition of their shares in the passive foreign
investment company. In particular, dividends paid by us would not be treated as
"qualified dividend income" eligible for preferential tax rates in the hands of
noncorporate U.S. shareholders.

     Based on our current and expected future operations, we believe that we
ceased to be a passive foreign investment company beginning with the 2005
taxable year. We do not anticipate that we will be a passive foreign investment
company for any taxable year in the future. As a result, noncorporate U.S.
shareholders should be eligible to treat dividends paid by us in 2006 and
thereafter as "qualified dividend income" which is subject to preferential tax
rates (through 2010). Since we expect to derive more than 25% of our income each
year from our time chartering and voyage chartering activities, we believe that
such income will be treated for relevant U.S. Federal income tax purposes as
services income, rather than rental income. Correspondingly, such income should
not constitute "passive income," and the assets that we own and operate in
connection with the production of that income (which should constitute more than
50% of our assets each year), in particular our vessels, should not constitute
passive assets for purposes of determining whether we are a passive foreign
investment company in any taxable year. However, no assurance can be given that
the Internal Revenue Service will accept this position or that we would not
constitute a passive foreign investment company for any future taxable year if
there were to be changes in the nature and extent of our operations.

                       Risks Relating to Our Common Shares

Our common share price may be highly volatile and future sales of our common
shares could cause the market price of our common shares to decline.

     The market price of our common shares has historically fluctuated over a
wide range and may continue to fluctuate significantly in response to many
factors, such as actual or anticipated fluctuations in our operating results,
changes in financial estimates by securities analysts, economic and regulatory
trends, general market conditions, rumors and other factors, many of which are
beyond our control. Investors in our common shares may not be able to resell
their shares at or above their purchase price due to those factors, which
include the risks and uncertainties set forth in this annual report.

Because we are a foreign corporation, you may not have the same rights that a
shareholder in a U.S. corporation may have.

     We are a Bermuda exempted company. Our memorandum of association and
bye-laws and The Companies Act, 1981 of Bermuda, or the Companies Act, govern
our affairs. The Companies Act does not as clearly establish your rights and the
fiduciary responsibilities of our directors as do statutes and judicial
precedent in some U.S. jurisdictions. Therefore, you may have more difficulty in
protecting your interests as a shareholder in the face of actions by the
management, directors or controlling shareholders than would shareholders of a
corporation incorporated in a United States jurisdiction. There is a statutory
remedy under Section 111 of the Companies Act which provides that a shareholder
may seek redress in the courts as long as such shareholder can establish that
our affairs are being conducted, or have been conducted, in a manner oppressive
or prejudicial to the interests of some part of the shareholders, including such
shareholder. However, the principles governing Section 111 have not been well
developed.

It may not be possible for our investors to enforce U.S. judgments against us.

     We are incorporated in the Islands of Bermuda. Substantially all of our
assets and those of our subsidiaries are located outside the United States. As a
result, it may be difficult or impossible for U.S. investors to serve process
within the United States upon us or to enforce judgment upon us for civil
liabilities in U.S. courts. In addition, you should not assume that courts in
the countries in which we are incorporated or where our assets are located (1)
would enforce judgments of U.S. courts obtained in actions against based upon
the civil liability provisions of applicable U.S. federal and state securities
laws or (2) would enforce, in original actions, liabilities against us based
upon these laws.


ITEM 4.  INFORMATION ON THE COMPANY

A. HISTORY AND DEVELOPMENT OF THE COMPANY

     Nordic American Tanker Shipping Limited, or the Company, was founded on
June 12, 1995 under the laws of the Islands of Bermuda and we maintain our
principal offices at LOM Building, 27 Reid Street, Hamilton HM 11, Bermuda. Our
telephone number at such address is (441) 292-7202.

     The Company was formed for the purpose of acquiring and chartering three
Suezmax tankers that were built in 1997. These three vessels were bareboat
chartered to BP Shipping Ltd., or BP Shipping, for a period of seven years. BP
Shipping redelivered these three vessels to us in September 2004, October 2004
and November 2004, respectively. We have continued contracts with BP Shipping by
time chartering to it two of our original vessels at spot market related rates
for three-year terms up to the autumn of 2007. We have bareboat chartered the
third of our original three vessels to Gulf Navigation Company LLC, or Gulf
Navigation, of Dubai, U.A.E. for a term of five years at a fixed rate of
charterhire, subject to two one-year extensions at Gulf Navigation's option. Our
fourth vessel was delivered to us in November 2004, our fifth and sixth vessels
in March 2005, our seventh vessel in August 2005, our eighth vessel in November
2005, our ninth vessel in April 2006, our tenth and eleventh vessel in November
2006 and our twelfth vessel in December 2006.

     Tanker markets are typically stronger in the fall and winter months (the
fourth and first quarters of the calendar) in anticipation of increased oil
consumption in the northern hemisphere during the winter months. Seasonal
variations in tanker demand normally result in seasonal fluctuations in spot
market charter rates. We currently operate eleven of our twelve vessels in the
spot market or on time charters with spot market related rates.


B. BUSINESS OVERVIEW

Our Fleet

     Our fleet consists of twelve modern double-hull Suezmax tankers. The
following chart provides information regarding each vessel, including its
employment status.

<TABLE>
<CAPTION>
                                   Year                Employment Status
Vessel                Yard         Built    Dwt(1)      (Expiration Date)          Flag
------                ----         -----    ------      -----------------          ----

<S>                   <C>          <C>      <C>        <C>                      <C>
Gulf Scandic          Samsung      1997     151,475    Bareboat (Nov. 2009)     Isle of Man
Nordic Hawk           Samsung      1997     151,475    TC/Spot(2)(Oct. 2007)    Bahamas
Nordic Hunter         Samsung      1997     151,400    TC/Spot(2)(Sep. 2007)    Bahamas
Nordic Voyager        Dalian New   1997     149,591    Spot                     Norway
Nordic Freedom        Daewoo       2005     163,455    Spot                     Bahamas
Nordic Fighter        Hyundai      1998     153,328    Spot                     Norway
Nordic Discovery      Hyundai      1998     153,328    Spot                     Norway
Nordic Saturn         Daewoo       1998     157,332    Spot                     Marshall Islands
Nordic Jupiter        Daewoo       1998     157,411    Spot                     Marshall Islands
Nordic Apollo         Samsung      2003     159,999    Spot                     Marshall Islands
Nordic Cosmos         Samsung      2002     159,998    Spot                     Marshall Islands
Nordic Moon           Samsung      2003     159,999    Spot                     Marshall Islands
</TABLE>

(1)  Scantling draft is the maximum draft at which a vessel complies with the
     governing strength requirements of classification societies.

(2)  TC/Spot = Time Charter on spot market related terms.

OUR CHARTERS

     We operate our vessels on bareboat charters, time charters and in the spot
market. Our goal is to take advantage of potentially higher market rates with
spot market related rates and voyage charters. We currently operate eleven of
our twelve vessels in the spot market or on spot market related time charters
although we may consider charters at fixed rates depending on market conditions.

Bareboat Charters

     We have chartered one of our vessels (Gulf Scandic) under a bareboat
charter to Gulf Navigation, for a period of five years terminating in the fourth
quarter of 2009 subject to two one-year extensions at Gulf Navigation's option.
Under the terms of this bareboat charter, Gulf Navigation is obligated to pay a
fixed charterhire of $17,325 per day for the entire charter period. During the
charter period, Gulf Navigation is responsible for operating and maintaining the
vessel and is responsible for covering all operating costs and expenses with
respect to the vessel.

Time Charters

     We have chartered two of our vessels (Nordic Hawk and Nordic Hunter) under
spot market related charters to BP Shipping for a period of three years each,
terminating between September 1, 2007 and October 31, 2007. The amount of
charterhire payable under these charters to BP Shipping is based on a formula
designed to generate earnings to us as if we had operated the vessels in the
spot market on two specific routes, less 5%. The charterhire is payable to us
monthly. Under these time charters, BP Shipping is responsible for all voyage
related costs while the Company is responsible for providing the crew and paying
other operating costs.

Spot Charters

     During the year we have temporarily operated several vessels (Nordic
Freedom, Nordic Apollo, Nordic Cosmos and Nordic Moon) in the spot market, other
than in pooling arrangements. Tankers operating in the spot market are typically
chartered for a single voyage which may last up to several weeks. Tankers
operating in the spot market may generate increased profit margins during
improvements in tanker rates, while tankers on fixed-rate time charters
generally provide more predictable cash flows.

     Under a typical voyage charter in the spot market, we will be paid freight
on the basis of moving cargo from a loading port to a discharge port. We are
responsible for paying both operating costs and voyage costs and the charterer
is responsible for any delay at the loading or discharging ports.

Pooling Arrangements

     We currently operate nine of our vessels (Nordic Voyager, Nordic Discovery,
Nordic Fighter, Nordic Saturn, Nordic Freedom, Nordic Jupiter, Nordic Apollo,
Nordic Cosmos and Nordic Moon) in spot market pools with other vessels that are
not owned by us. These pools are managed and operated by third party pool
administrators. The pool administrator of each pool has the responsibility for
the commercial management of the participating vessels, including marketing,
chartering, operating and bunker (fuel oil) purchasing for the vessels. The pool
participants remain responsible for all other costs including the financing,
insurance, manning and technical management of their vessels. The earnings of
all of the vessels are aggregated, or pooled, and divided according to the
relative performance capabilities of each vessel and the actual earning days
each vessel was available during the period. The pool vessels are operated in
the spot market by the pool administrators.

The Management Agreement

     Under the Management Agreement by and between the Company and Scandic
American Shipping Ltd., or the Manager, the Manager assumes commercial and
operational responsibility of our vessels and is generally required to manage
our day-to-day business subject to our objectives and policies as established
from time to time by the Board of Directors. All decisions of a material nature
concerning our business are reserved to our Board of Directors. The Management
Agreement will terminate on June 30, 2019, unless earlier terminated pursuant to
its terms, as discussed below, or extended by the parties following mutual
agreement.

     For its services under the Management Agreement, the Manager is reimbursed
for all its costs incurred plus a management fee equal to $100,000 per annum.
The management fee is payable to the Manager quarterly in advance. The
management fee has been adjusted to $225,000 beginning July 1, 2007. The
Management Agreement formerly provided that the Manager would receive 1.25% of
any gross charterhire paid to us. In order to further align the Manager's
interests with those of the Company, in 2004, the Manager agreed with us to
amend the Management Agreement to eliminate this payment, and we issued to the
Manager restricted common shares equal to 2% of our outstanding common shares.
Any time additional common shares are issued, the Manager will receive
additional restricted common shares to maintain the number of common shares
issued to the Manager at 2% of our total outstanding common shares. These
restricted shares are nontransferable for three years from issuance.

     Under the Management Agreement, the Manager pays, and receives
reimbursement from us, for our administrative expenses including such items as:

     o    all costs and expenses incurred on our behalf, including operating
          expenses and other costs for vessels that are chartered out on time
          charters or traded in the spot market and for monitoring the condition
          of our vessel that is operating under bareboat charter,

     o    executive officer and staff salaries,

     o    administrative expenses, including, among others, for third party
          public relations, insurance, franchise fees and registrars' fees,

     o    all premiums for insurance of any nature, including directors' and
          officers' liability insurance and general liability insurance,

     o    brokerage commissions payable by us on the gross charter hire received
          in connection with the charters,

     o    directors' fees and meeting expenses,

     o    audit fees,

     o    other expenses approved by the Board of the Directors and

     o    attorneys' fees and expenses, incurred on our behalf in connection
          with (A) any litigation commenced by or against us or (B) any claim or
          investigation by any governmental, regulatory or self-regulatory
          authority involving us.

     We have agreed to defend, indemnify and hold the Manager and its affiliates
(other than us and our subsidiaries that we may form in the future), officers,
directors, employees and agents harmless from and against any and all loss,
claim, damage, liability, cost or expense, including reasonable attorneys' fees,
incurred by the Manager or any such affiliates based upon a claim by or
liability to a third party arising out of the operation of our business, unless
due to the Manager's or such affiliates' negligence or willful misconduct.

     We may terminate the Management Agreement in the event that:

     o    the Manager commits any material breach or omission of its material
          obligations or undertakings thereunder that is not remedied within
          thirty days of our notice to the Manager of such breach or omission,

     o    the Manager fails to maintain adequate authorization to perform its
          duties thereunder that is not remedied within thirty days,

     o    certain events of the Manager's bankruptcy occur, or

     o    it becomes unlawful for the Manager to perform its duties under the
          Management Agreement.

Commercial and Technical Management Agreements

     We have entered into a commercial management agreement with Teekay
Chartering Limited ("Teekay"), an affiliate of Teekay Shipping Corporation for
the Nordic Freedom which is operated in a pool with other Teekay-controlled
Suezmax tankers. Under the supervision of the Manager, Teekay's duties include
seeking and negotiating charters for this vessel.

     We have entered into a commercial management agreement with the Swedish
based Stena Bulk AS ("Stena"), for the Nordic Voyager, the Nordic Cosmos and the
Nordic Moon, which are operated in a pool with other Stena-controlled Suezmax
tankers. Under the supervision of the Manager, Stena's duties in the pool
include seeking and negotiating charters for these vessels.

     We have entered into a commercial management agreement with Frontline
Management ASA ("Frontline") for the Nordic Fighter, the Nordic Discovery and
the Nordic Apollo, which are operated in a pool with other Frontline controlled
Suezmax tankers. Under the supervision of the Manager, Frontline's duties in the
pool include seeking and negotiating charters for these vessels.

     We have entered into a commercial management agreement with the U.S. based
OMI Corporation ("OMI") for the Nordic Saturn and the Nordic Jupiter, which are
operated in a pool with other OMI-controlled Suezmax tankers. Under the
supervision of the Manager, OMI's duties in the pool include seeking and
negotiating charters for these vessels.

     We have entered into a technical management agreement for the Nordic Hawk,
the Nordic Hunter, the Nordic Voyager, the Nordic Freedom and the Nordic Saturn
with Teekay Marine Services AS under the supervision of the Manager.

     We have entered into a technical management agreement for the Nordic
Fighter, the Nordic Discovery, the Nordic Apollo, the Nordic Cosmos and the
Nordic Moon with V.Ships Norway AS ("V.Ships"). V.Ships is a marine service
group that provides ship management and related services to a managed fleet of
some 650 vessels worldwide.

     We have entered into a technical management agreement for the Nordic
Jupiter with OMI Marine Services under the supervision of the Manager.

     Compensation under the commercial and technical management agreements is in
accordance with industry standards.

     The Company has decided to consolidate its technical operating functions.
The ship management firm of V.Ships Norway AS ("V.Ships") is expected to manage
ten of the Company's vessels beginning in the third quarter of 2007. V.Ships
currently is technically managing five of the Company's vessels. We expect that
this consolidation will facilitate crew rotation among the vessels which
together with economies of scale should result in cost improvements.

The International Tanker Market

     International seaborne oil and petroleum products transportation services
are mainly provided by two types of operators: major oil company captive fleets
(both private and state-owned) and independent shipowner fleets. Both types of
operators transport oil under short-term contracts (including single-voyage
"spot charters") and long-term time charters with oil companies, oil traders,
large oil consumers, petroleum product producers and government agencies. The
oil companies own, or control through long-term time charters, approximately one
third of the current world tanker capacity, while independent companies own or
control the balance of the fleet. The oil companies use their fleets not only to
transport their own oil, but also to transport oil for third-party charterers in
direct competition with independent owners and operators in the tanker charter
market.

     The oil transportation industry has historically been subject to regulation
by national authorities and through international conventions. Over recent
years, however, an environmental protection regime has evolved which has a
significant impact on the operations of participants in the industry in the form
of increasingly more stringent inspection requirements, closer monitoring of
pollution-related events, and generally higher costs and potential liabilities
for the owners and operators of tankers.

     In order to benefit from economies of scale, tanker charterers will
typically charter the largest possible vessel to transport oil or products,
consistent with port and canal dimensional restrictions and optimal cargo lot
sizes. A tanker's carrying capacity is measured in deadweight tons, or dwt,
which is the amount of crude oil measured in metric tons that the vessel is
capable of loading. The oil tanker fleet is generally divided into the following
five major types of vessels, based on vessel carrying capacity: (i) Ultra Large
Crude Carrier (ULCC) - with a size range of approximately 320,000 to 450,000
dwt; (ii) Very Large Crude Carrier (VLCC) with a size range of approximately
200,000 to 320,000 dwt; (iii) Suezmax-size range of approximately 120,000 to
200,000 dwt; (iv) Aframax-size range of approximately 80,000 to 120,000 dwt; (v)
Panamax-size range of approximately 60,000 to 70,000 dwt; and (v) small tankers
of less than approximately 60,000 dwt. ULCCs and VLCCs typically transport crude
oil in long-haul trades, such as from the Arabian Gulf to Rotterdam via the Cape
of Good Hope. Suezmax tankers also engage in long-haul crude oil trades as well
as in medium-haul crude oil trades, such as from West Africa to the East Coast
of the United States. Aframax-size vessels generally engage in both medium-and
short-haul trades of less than 1,500 miles and carry crude oil or petroleum
products. Smaller tankers mostly transport petroleum products in short-haul to
medium-haul trades.

The Tanker Market 2006

     Despite the high fleet growth and the bottlenecks within the oil sector,
2006 was the third strongest tanker market since 1973, surpassed only by the two
previous years. The peak year was 2004, while 2005 was only marginally stronger
than 2006.

     The oil tanker fleet is generally divided into five major categories of
vessels, based on carrying capacity. A tanker's carrying capacity is measured in
dwt, which is the amount of crude oil measured in metric tons that the vessel is
capable of loading. In the single voyage market the Very Large Crude Carrier
("VLCC"), whose carrying capacity ranges from 200,000 dwt to 320,000 dwt,
reached an average of $56,000 per day, a marginal increase from $55,000 per day
in 2005. Suezmaxes, whose carrying capacity ranges from 120,000 dwt to 200,000
dwt, achieved $48,000 per day, unchanged from 2005. Corresponding rates for
Aframaxes, whose carrying capacity ranges from 80,000 dwt to 120,000 dwt, were
$38,000 per day compared with $40,000 per day in 2005.

     On an annual average basis, the tanker fleet increased by 6.5% from 2005 to
2006. Deliveries of new tankers reached 23 million dwt, down from 28 million dwt
in 2005. Scrapping amounted to 3.2 million dwt. No VLCCs or Suezmaxes were sold
for scrapping; however 13 Aframaxes and 52 smaller tankers were reported sold
for scrapping. The average scrapping age for all tankers was 26.0 years compared
with 27.5 years in 2005. It has further been recorded 2.2 million dwt or 14
tankers for conversions, of these 4 VLCCs and 5 Suezmaxes.

     Estimates indicate an increase in seaborne oil trade of 2.5% from 2005 to
2006 and a strong increase in the average transport distance, driven by China.
The trade growth in ton-mile terms is estimated at approximately 4%. There have
also been some additional factors contributing to the tonnage demand growth.
Among these factors a reduction in the productivity of single-hull tankers (in
2006 single hull accounted for about 30% of the total fleet) was the most
important one. There was also a wide use of tankers for floating storage in the
massive oil stockbuilding period in the summer of 2006, which withdrew transport
capacity from active trading. Including these additional factors tonnage demand
growth increased by approximately 6%, resulting in a drop in capacity
utilization from 89.0% in 2005 to 88.5% in 2006.

     After the strong 4% growth in oil consumption in 2004, oil production
capacity has been basically fully utilized. With a continued high economic
growth in 2005 and 2006, capacity constraints have reduced the growth in oil
consumption to only 1.5% in 2005 and 1.0% in 2006 and has driven crude oil
prices up to $65 per barrel for Brent dated as an average for 2006, up 20% from
the year before. Again non-OPEC producers did not meet expectations and their
production increased only marginally. The fear of another active hurricane
season in the US Gulf combined with geopolitical uncertainty and increased risk
of supply disruptions gave strong incentives to build oil stocks throughout the
summer. OPEC contributed significantly to this stockbuilding through higher oil
production from the spring to late summer. Most of this rise in output came from
the Middle East. Tanker freight rates rose to very high levels in the summer
months, which are normally the weakest period of the year.

     When the hurricanes did not appear and geopolitical uncertainty softened,
oil prices fell from $76 per barrel in August to $56 per barrel in October. For
OPEC it was of great importance to prevent an uncontrolled price dive and it
therefore decided to cut production, in which resulted in lower freight rates.

     Sale and purchase activity during 2006 was marginally lower than in 2005
with some 325 reported sales within the segments listed in our monthly report.
Values for double hull tankers have on average increased by 4%, whereas single
hull tankers have fallen by 14% on average. Greek players have dominated the
market, followed by Norwegian and Far East buyers.

     According to Oil and Gas Journal, the Middle East had 56.1% of the world's
proven oil reserves in January 2007, which will continue to drive long and
medium haul seaborne transportation. Middle East supplied approximately 30% of
total world oil production. Given the dominance of world oil reserves located in
this region, this share is expected to grow in coming years as oil fields in
other parts of the world gradually reach maturity and begin a process of natural
decline. The length of transportation distances between the Middle East and
consuming areas means that such a trend would boost ton-miles (the product of
volumes and transport distances) and may be beneficial for tanker demand.

     A significant and ongoing shift toward quality in vessels and operations
has taken place during the last decade as charterers and regulators increasingly
focus on safety and protection of the environment. Since 1990, there has been an
increasing emphasis on environmental protection through legislation and
regulations such as the Oil Pollution Act of 1990 (OPA), International Maritime
Organization (IMO), protocols and Classification Society procedures, demanding
higher quality tanker construction, maintenance, repair and operations.
Operators that have proven an ability to seamlessly integrate these required
safety regulations into their operations are being rewarded. For example, the
emergence of vessels equipped with double hulls represented a differentiation in
vessel quality and enabled such vessels to command improved earnings in the spot
charter markets. The effect has been a shift in major charterers' preference
towards greater use of double hulls and, therefore, more difficult trading
conditions for older single-hull vessels.

Environmental and Other Regulation

     Government regulation significantly affects the ownership and operation of
our fleet. We are subject to various international conventions and treaties,
laws and regulations in force in the countries in which our vessels may operate
or are registered relating to safety and health and environmental protection
including the storage, handling, emission, transportation and discharge of
hazardous and non-hazardous materials, and the remediation of contamination and
liability for damage to natural resources.

     A variety of governmental and private entities subject our vessels to both
scheduled and unscheduled inspections. These entities include the local port
authorities, (applicable national authorities such as the U.S. Coast Guard and
harbor masters), classification societies, flag state administration (country of
registry) and charterers, particularly terminal operators and oil companies.
Some of these entities require us to obtain permits, licenses, certificates and
other authorizations for the operation of our fleet. Our failure to maintain
necessary permits or approvals could require us to incur substantial costs or
temporarily suspend operation of one or more of the vessels in our fleet.

     In recent periods, heightened levels of environmental and quality concerns
among insurance underwriters, regulators and charterers have led to greater
inspection and safety requirements on all ships and may accelerate the scrapping
of older vessels throughout the industry. Increasing environmental concerns have
created a demand for vessels that conform to the stricter environmental
standards. We believe that the operation of our vessels is in substantial
compliance with applicable environmental laws and regulations and that our
vessels have all material permits, licenses, certificates or other
authorizations necessary for the conduct of our operations; however, because
such laws and regulations are frequently changed and may impose increasingly
stricter requirements, we cannot predict the ultimate cost of complying with
these requirements, or the impact of these requirements on the resale value or
useful lives of our vessels. In addition, a future serious marine incident that
results in significant oil pollution or otherwise causes significant adverse
environmental impact could result in additional legislation or regulation that
could negatively affect our profitability.

International Maritime Organization

     The International Maritime Organization, or IMO (the United Nations agency
for maritime safety and the prevention of marine pollution by ships), has
adopted the International Convention for the Prevention of Marine Pollution,
1973, as modified by the Protocol of 1978 relating thereto, which has been
updated through various amendments (the "MARPOL Convention" ). The MARPOL
Convention relates to environmental standards including oil leakage or spilling,
garbage management, as well as the handling and disposal of noxious liquids,
harmful substances in packaged forms, sewage and air emissions. The IMO adopted
regulations that set forth pollution prevention requirements applicable to
tankers. These regulations, which have been adopted by over 150 nations,
including many of the jurisdictions in which our tankers operate, provide for,
among other things, phase-out of single-hulled tankers and more stringent
inspection requirements; including, in part, that:

     o    tankers between 25 and 30 years old must be of double-hulled
          construction or of a mid-deck design with double-sided construction,
          unless: (1) they have wing tanks or double-bottom spaces not used for
          the carriage of oil, which cover at least 30% of the length of the
          cargo tank section of the hull or bottom; or (2) they are capable of
          hydrostatically balanced loading (loading less cargo into a tanker so
          that in the event of a breach of the hull, water flows into the
          tanker, displacing oil upwards instead of into the sea);

     o    tankers 30 years old or older must be of double-hulled construction or
          mid-deck design with double sided construction; and

     o    all tankers are subject to enhanced inspections.

     Also, under IMO regulations, a tanker must be of double-hulled construction
or a mid-deck design with double-sided construction or be of another approved
design ensuring the same level of protection against oil pollution if the
tanker:

     o    is the subject of a contract for a major conversion or original
          construction on or after July 6, 1993;

     o    commences a major conversion or has its keel laid on or after January
          6, 1994; or

     o    completes a major conversion or is a newbuilding delivered on or after
          July 6, 1996.

     Effective September 2002, the IMO accelerated its existing timetable for
the phase-out of single hull oil tankers. At that time, these regulations
required the phase-out of most single hull oil tankers by 2015 or earlier,
depending on the age of the tanker and whether it has segregated ballast tanks.
Under the regulations, the flag state administration may allow for some newer
single hull ships registered in its country that conform to certain technical
specifications to continue operating until the 25th anniversary of their
delivery. Any port state, however, may deny entry of those single hull tankers
that are allowed to operate until their 25th anniversary to ports or offshore
terminals.

     However, as a result of the oil spill in November 2002 relating to the loss
of the m.t. Prestige, which was owned by a company not affiliated with us, in
December 2003, the Marine Environmental Protection Committee of the IMO, or
MEPC, adopted an amendment to the MARPOL Convention, which became effective in
April 2005. The amendment revised an existing regulation 13G accelerating the
phase-out of single hull oil tankers and adopted a new regulation 13H on the
prevention of oil pollution from oil tankers when carrying heavy grade oil.
Under the revised regulation, single hull oil tankers must be phased out no
later than April 5, 2005 or the anniversary of the date of delivery of the ship
on the date or in the year specified in the following table:

Category of Oil Tankers                      Date or Year
-----------------------                      ------------

Category 1 oil tankers of 20,000 dwt and     April 5, 2005 for ships
above carrying crude oil, fuel oil,          delivered on April 5, 1982 or
heavy diesel oil or lubricating oil as       earlier; or 2005 for ships
cargo, and of 30,000 dwt and above           delivered after April 5, 1982
carrying other oils, which do not comply
with the requirements for protectively
located segregated ballast tanks

Category 2 - oil tankers of 20,000 dwt       April 5, 2005 for ships delivered
and above carrying crude oil, fuel oil,      on April 5, 1977 or earlier
heavy diesel oil or lubricating oil as       2005 for ships delivered after
cargo, and of 30,000 dwt and above           April 5, 1977 but before January 1,
carrying other oils, which do comply         1978
with the protectively located segregated     2006 for ships delivered in 1978
ballast tank requirements                    and 1979
                                             2007 for ships delivered in 1980
and                                          and 1981
                                             2008 for ships delivered in 1982
Category 3 - oil tankers of 5,000 dwt        2009 for ships delivered in 1983
and above but less than the tonnage          2010 for ships delivered in 1984 or
specified for Category 1 and 2 tankers.      later

     Under the revised regulations, the flag state administration may allow for
some newer single hull oil tankers registered in its country that conform to
certain technical specifications to continue operating until the earlier of the
anniversary of the date of delivery of the vessel in 2015 or the 25th
anniversary of their delivery. Any port state, however, may deny entry of those
single hull oil tankers that are allowed to operate until the earlier of their
anniversary date of delivery in 2015 or their 25th anniversary to ports or
offshore terminals.

     The MEPC, in October 2004, adopted a unified interpretation to regulation
13G that clarified the date of delivery for tankers that have been converted.
Under the interpretation, where an oil tanker has undergone a major conversion
that has resulted in the replacement of the fore-body, including the entire
cargo carrying section, the major conversion completion date of the oil tanker
shall be deemed to be the date of delivery of the ship, provided that:

     o    the oil tanker conversion was completed before July 6, 1996;

     o    the conversion included the replacement of the entire cargo section
          and fore-body and the tanker complies with all the relevant provisions
          of MARPOL Convention applicable at the date of completion of the major
          conversion; and

     o    the original delivery date of the oil tanker will apply when
          considering the 15 years of age threshold relating to the first
          technical specifications survey to be completed in accordance with
          MARPOL Convention.

     In December 2003, the MEPC adopted a new regulation 13H on the prevention
of oil pollution from oil tankers when carrying heavy grade oil, or HGO. The new
regulation bans the carriage of HGO in single hull oil tankers of 5,000 dwt and
above after April 5, 2005, and in single hull oil tankers of 600 dwt and above
but less than 5,000 dwt, no later than the anniversary of their delivery in
2008.

     Under regulation 13H, HGO means any of the following:

     o    crude oils having a density at 15(0)C higher than 900 kg/m3;

     o    fuel oils having either a density at 15(0)C higher than 900 kg/ m3 or
          a kinematic viscosity at 50(0)C higher than 180 mm2/s;

     o    bitumen, tar and their emulsions.

     Under the regulation 13H, the flag state administration may allow continued
operation of oil tankers of 5,000 dwt and above, carrying crude oil with a
density at 15(0)C higher than 900 kg/m3 but lower than 945 kg/m3, that conform
to certain technical specifications and, in the opinion of the such
administration, the ship is fit to continue such operation, having regard to the
size, age, operational area and structural conditions of the ship and provided
that the continued operation shall not go beyond the date on which the ship
reaches 25 years after the date of its delivery. The flag state administration
may also allow continued operation of a single hull oil tanker of 600 dwt and
above but less than 5,000 dwt, carrying HGO as cargo, if, in the opinion of the
such administration, the ship is fit to continue such operation, having regard
to the size, age, operational area and structural conditions of the ship,
provided that the operation shall not go beyond the date on which the ship
reaches 25 years after the date of its delivery.

     The flag state administration may also exempt an oil tanker of 600 dwt and
above carrying HGO as cargo if the ship is either engaged in voyages exclusively
within an area under its jurisdiction, or is engaged in voyages exclusively
within an area under the jurisdiction of another party, provided the party
within whose jurisdiction the ship will be operating agrees. The same applies to
vessels operating as floating storage units of HGO.

     Any port state, however, can deny entry of single hull tankers carrying HGO
which have been allowed to continue operation under the exemptions mentioned
above, into the ports or offshore terminals under its jurisdiction, or deny
ship-to-ship transfer of HGO in areas under its jurisdiction except when this is
necessary for the purpose of securing the safety of a ship or saving life at
sea.

     Revised Annex I to the MARPOL Convention entered into force in January
2007. Revised Annex I incorporates various amendments adopted since the MARPOL
Convention entered into force in 1983, including the amendments to Regulation
13G (regulation 20 in the revised Annex) and Regulation 13H (regulation 21 in
the revised Annex). Revised Annex I also imposes construction requirements for
oil tankers delivered on or after January 1, 2010. A further amendment to
revised Annex I includes an amendment to the definition of "heavy grade oil"
that will broaden the scope of regulation 21.

     The IMO has also negotiated international conventions that impose liability
for oil pollution in international waters and a signatory's territorial waters.
In September 1997, the IMO adopted Annex VI to the MARPOL Convention to address
air pollution from ships. Annex VI was ratified in May 2004, and took effect May
19, 2005. Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from
ship exhausts and prohibits deliberate emissions of ozone depleting substances,
such as chlorofluorocarbons. Annex VI also includes a global cap on the sulfur
content of fuel oil and allows for special areas to be established with more
stringent controls on sulfur emissions. Annex VI regulations pertaining to
nitrogen oxide emissions apply to diesel engines on vessels built on or after
January 1, 2000 or diesel engines undergoing major conversion after such date.
We believe that all our vessels comply with Annex VI in all material respects.
Additional or new conventions, laws and regulations may be adopted that could
adversely affect our business, cash flows, results of operations and financial
condition.

     The IMO also has adopted the International Convention for the Safety of
Life at Sea, or SOLAS Convention, which imposes a variety of standards to
regulate design and operational features of ships. SOLAS standards are revised
periodically. We believe that all our vessels are in substantial compliance with
SOLAS standards.

     Under the International Safety Management Code for the Safe Operation of
Ships and for Pollution Prevention, or ISM Code, promulgated by the IMO, the
party with operational control of a vessel is required to develop an extensive
safety management system that includes, among other things, the adoption of a
safety and environmental protection policy setting forth instructions and
procedures for operating its vessels safely and describing procedures for
responding to emergencies. In 1994, the ISM Code became mandatory with the
adoption of Chapter IX of SOLAS. We intend to rely on the safety management
systems that our technical managers have developed.

     The ISM Code requires that vessel operators obtain a safety management
certificate for each vessel they operate. This certificate evidences compliance
by a vessel's management with code requirements for a safety management system.
No vessel can obtain a certificate unless its operator has been awarded a
document of compliance, issued by each flag state, under the ISM Code. We
believe that our technical managers have procured all material requisite
documents of compliance for their offices and safety management certificates for
vessels in our fleet for which the certificates are required by the IMO. Our
technical managers will be required to review these documents of compliance and
safety management certificates annually.

     Noncompliance with the ISM Code and other IMO regulations may subject the
shipowner to increased liability, may lead to decreases in available insurance
coverage for affected vessels and may result in the denial of access to, or
detention in, some ports. For example, the U.S. Coast Guard and European Union
authorities have indicated that vessels not in compliance with the ISM Code will
be prohibited from trading in U.S. and European Union ports.

     Although the United States is not a party to these conventions, many
countries have ratified and follow the liability plan adopted by the IMO and set
out in the International Convention on Civil Liability for Oil Pollution Damage
of 1969. Under this convention and depending on whether the country in which the
damage results is a party to the 1992 Protocol to the International Convention
on Civil Liability for Oil Pollution Damage, a vessel's registered owner is
strictly liable for pollution damage caused in the territorial waters of a
contracting state by discharge of persistent oil, subject to certain complete
defenses. Under an amendment to the 1992 Protocol that became effective on
November 1, 2003, for vessels of 5,000 to 140,000 gross tons (a unit of
measurement for the total enclosed spaces within a vessel), liability will be
limited to approximately $6.8 million plus $955.3 for each additional gross ton
over 5,000. For vessels of over 140,000 gross tons, liability will be limited to
approximately $136.0 million. As the convention calculates liability in terms of
a basket of currencies, these figures are based on currency exchange rates on
June 4, 2007. Under the 1969 Convention, the right to limit liability is
forfeited where the spill is caused by the owner's actual fault; under the 1992
Protocol, a shipowner cannot limit liability where the spill is caused by the
owner's intentional or reckless conduct. Vessels trading in jurisdictions that
are parties to these conventions must provide evidence of insurance covering the
liability of the owner. In jurisdictions where the International Convention on
Civil Liability for Oil Pollution Damage has not been adopted, various
legislative schemes or common law govern, and liability is imposed either on the
basis of fault or in a manner similar to that convention. We believe that our
protection and indemnity insurance will cover the liability under the plan
adopted by the IMO.

U.S. Oil Pollution Act of 1990 and Comprehensive Environmental Response,
Compensation and Liability Act

     The United States regulates the tanker sector with an extensive regulatory
and liability regime for environmental protection and cleanup of oil spills,
consisting primarily of OPA and the Comprehensive Environmental Response,
Compensation and Liability Act, or CERCLA. OPA affects all owners and operators
whose vessels trade with the United States or its territories or possessions, or
whose vessels operate in the waters of the United States, which include the U.S.
territorial sea and the 200 nautical mile exclusive economic zone around the
United States. CERCLA applies to the discharge of hazardous substances other
than oil, whether on land or at sea. Both OPA and CERCLA impact our operations.

     Under OPA, vessel owners, operators and bareboat charterers are
"responsible parties" who are jointly, severally and strictly liable (unless the
spill results solely from the act or omission of a third party, an act of God or
an act of war and the responsible party reports the incident and reasonably
cooperates with the appropriate authorities) for all containment and clean-up
costs and other damages arising from oil spills from their vessels. These other
damages are defined broadly to include:

     o    natural resource damages and related assessment costs;

     o    real and personal property damages;

     o    net loss of taxes, royalties, rents, profits or earnings capacity;

     o    net cost of public services necessitated by a spill response, such as
          protection from fire, safety or health hazards;

     o    loss of profits or impairment of earning capacity due to injury,
          destruction or loss of real property, personal property and natural
          resources; and

     o    loss of subsistence use of natural resources.

     OPA limits the liability of responsible parties to the greater of $1,200
per gross ton or $10 million per tanker that is over 3,000 gross tons per
discharge (subject to possible adjustment for inflation). Amendments to OPA
signed into law in July 2006 increased the OPA liability limits to the greater
of $1,900 per gross ton or $16.0 million per double-hull tanker that is over
3,000 gross tons per discharge (subject to possible adjustment for inflation).
The act specifically permits individual states to impose their own liability
regimes with regard to oil pollution incidents occurring within their
boundaries, including adjacent waters, and some states have enacted legislation
providing for unlimited liability for discharge of pollutants within their
waters. In some cases, states that have enacted this type of legislation have
not yet issued implementing regulations defining vessel owners' responsibilities
under these laws. CERCLA, which applies to owners and operators of vessels,
contains a similar liability regime and provides for cleanup, removal and
natural resource damages. Liability under CERCLA is limited to the greater of
$300 per gross ton or $5 million.

     These limits of liability do not apply, however, where the incident is
caused by violation of applicable U.S. federal safety, construction or operating
regulations, or by the gross negligence or wilful misconduct of the responsible
party or the responsible party's agent or employee or any person acting in a
contractual relationship with the responsible party. In addition, these limits
do not apply if the responsible party or the responsible party's agent or
employee or any person acting in a contractual relationship with the responsible
party fails or refuses to report the incident or to cooperate and assist in
connection with the substance removal activities. OPA and CERCLA each preserve
the right to recover damages under other laws, including maritime tort law.

     OPA also requires owners and operators of vessels to establish and maintain
with the U.S. Coast Guard evidence of financial responsibility sufficient to
meet the limit of their potential strict liability under the act. The U.S. Coast
Guard has adopted regulations requiring evidence of financial responsibility in
the amount of $1,500 per gross ton for tankers, combining the OPA limitation on
liability of $1,200 per gross ton with the CERLA liability limit of $300 per
gross ton. The U.S. Coast Guard has indicated that it expects to adopt
regulations requiring evidence of financial responsibility in the amounts that
reflect the higher limits of liability imposed by the July amendments to OPA, as
described above. Under the regulations, evidence of financial responsibility may
be demonstrated by insurance, surety bond, self-insurance, guaranty or an
alternative method subject to approval by the Director of the U.S. Coast Guard
National Pollution Funds Center. Under OPA regulations, an owner or operator of
more than one vessel is required to demonstrate evidence of financial
responsibility for the entire fleet in an amount equal only to the financial
responsibility requirement of the vessel having the greatest maximum strict
liability under OPA and CERCLA.

     Under OPA, oil tankers as to which a contract for construction or major
conversion was put in place after June 30, 1990 are required to have double
hulls. In addition, oil tankers without double hulls will not be permitted to
come to U.S. ports or trade in U.S. waters by 2015. All of the tankers in our
fleet have double hulls.

     OPA also amended the Federal Water Pollution Control Act to require that
owners or operators of tankers operating in the waters of the United States must
file vessel response plans with the U.S. Coast Guard, and their tankers are
required to operate in compliance with their U.S. Coast Guard approved plans.
These response plans must, among other things:

     o    address a "worst case" scenario and identify and ensure, through
          contract or other approved means, the availability of necessary
          private response resources to respond to a "worst case discharge";

     o    describe crew training and drills; and

     o    identify a qualified individual with full authority to implement
          removal actions.

     Vessel response plans for our tankers operating in the waters of the United
States have been approved by the U.S. Coast Guard. In addition, we conduct
regular oil spill response drills in accordance with the guidelines set out in
OPA. The U.S. Coast Guard has announced it intends to propose similar
regulations requiring certain vessels to prepare response plans for the release
of hazardous substances.

     As discussed above, OPA does not prevent individual states from imposing
their own liability regimes with respect to oil pollution incidents occurring
within their boundaries, including adjacent coastal waters. In fact, most U.S.
states that border a navigable waterway have enacted environmental pollution
laws that impose strict liability on a person for removal costs and damages
resulting from a discharge of oil or a release of a hazardous substance. These
laws may be more stringent than U.S. federal law.

Additional U.S. Environmental Requirements

     The U.S. Clean Air Act of 1970, as amended by the Clean Air Act Amendments
of 1977 and 1990 (the "CAA"), requires the U.S. Environmental Protection Agency,
or EPA, to promulgate standards applicable to emissions of volatile organic
compounds and other air contaminants. Our vessels are subject to vapor control
and recovery requirements for certain cargoes when loading, unloading,
ballasting, cleaning and conducting other operations in regulated port areas.
Our vessels that operate in such port areas are equipped with vapor control
systems that satisfy these requirements. The CAA also requires states to draft
State Implementation Plans, or SIPs, designed to attain national health-based
air quality standards in primarily major metropolitan and/or industrial areas.
Several SIPs regulate emissions resulting from vessel loading and unloading
operations by requiring the installation of vapor control equipment. As
indicated above, our vessels operating in covered port areas are already
equipped with vapor control systems that satisfy these requirements. Although a
risk exists that new regulations could require significant capital expenditures
and otherwise increase our costs, we believe, based on the regulations that have
been proposed to date, that no material capital expenditures beyond those
currently contemplated and no material increase in costs are likely to be
required.

     The Clean Water Act ("CWA") prohibits the discharge of oil or hazardous
substances into navigable waters and imposes strict liability in the form of
penalties for any unauthorized discharges. The CWA also imposes substantial
liability for the costs of removal, remediation and damages. State laws for the
control of water pollution also provide varying civil, criminal and
administrative penalties in the case of a discharge of petroleum or hazardous
materials into state waters. The CWA complements the remedies available under
the more recent OPA and CERCLA, discussed above. Under current regulations of
the EPA, vessels are not required to obtain CWA permits for the discharge of
ballast water in U.S. ports. However, on March 31, 2005, a U.S. District Court
ruled that the EPA exceeded its authority in creating an exemption for ballast
water. On September 18, 2006, the court issued an order invalidating the
exemption in the EPA's regulations for all discharges incidental to the normal
operation of a vessel as of September 30, 2008, and directing the EPA to develop
a system for regulating all discharges from vessels by that date. Although the
EPA has indicated that it will appeal this decision, if the exemption is
repealed, we may be subject to CWA permit requirements that may include ballast
water treatment obligations that could increase the cost of operating in the
United States. For example, this could require the installation of equipment on
our vessels to treat ballast water before it is discharged or the implementation
of other port facility disposal arrangements or procedures which may restrict
our vessels from entering U.S. ports. We cannot assure you that any costs
associated with compliance with the CWA's permitting requirements will not be
material to our results of operations.

     The National Invasive Species Act ("NISA") was enacted in 1996 in response
to growing reports of harmful organisms being released into U.S. ports through
ballast water taken on by ships in foreign ports. NISA established a ballast
water management program for ships entering U.S. waters. Under NISA, mid-ocean
ballast water exchange is voluntary, except for ships heading to the Great
Lakes, Hudson Bay, or vessels engaged in the foreign export of Alaskan North
Slope crude oil. However, NISA's exporting and record-keeping requirements are
mandatory for vessels bound for any port in the United States. Although ballast
water exchange is the primary means of compliance with the act's guidelines,
compliance can also be achieved through the retention of ballast water onboard
the ship, or the use of environmentally sound alternative ballast water
management methods approved by the U.S. Coast Guard. If the mid-ocean ballast
exchange is made mandatory throughout the United States, or if water treatment
requirements or options are instituted, the costs of compliance could increase
for ocean carriers.

     Our operations occasionally generate and require the transportation,
treatment and disposal of both hazardous and non-hazardous wastes that are
subject to the requirements of the U.S. Resource Conservation and Recovery Act,
or RCRA, or comparable state, local or foreign requirements. In addition, from
time to time we arrange for the disposal of hazardous waste or hazardous
substances at offsite disposal facilities. If such materials are improperly
disposed of by third parties, we might still be liable for clean up costs under
applicable laws.

European Union Tanker Restrictions

     In July 2003, in response to the m.t. Prestige oil spill in November 2002,
the European Union adopted legislation that accelerates the IMO single hull
tanker phase-out timetable and, by 2010 will prohibit all single-hulled tankers
used for the transport of oil from entering into its ports or offshore
terminals. The European Union, following the lead of certain European Union
nations such as Italy and Spain, has also banned, as of October 21, 2003, all
single-hulled tankers carrying heavy grades of oil, regardless of flag, from
entering or leaving its ports or offshore terminals or anchoring in areas under
its jurisdiction. Commencing in 2005, certain single-hulled tankers above 15
years of age will also be restricted from entering or leaving European Union
ports or offshore terminals and anchoring in areas under European Union
jurisdiction. The European Union has also adopted legislation that: (1) bans
manifestly sub-standard vessels (defined as those over 15 years old that have
been detained by port authorities at least twice in a six-month period) from
European waters and creates an obligation of port states to inspect vessels
posing a high risk to maritime safety or the marine environment; and (2)
provides the European Union with greater authority and control over
classification societies, including the ability to seek to suspend or revoke the
authority of negligent societies. It is impossible to predict what legislation
or additional regulations, if any, may be promulgated by the European Union or
any other country or authority.

Vessel Security Regulations

     Since the terrorist attacks of September 11, 2001, there have been a
variety of initiatives intended to enhance vessel security. On November 25,
2002, the U.S. Maritime Transportation Security Act of 2002, or MTSA, came into
effect. To implement certain portions of the MTSA, in July 2003, the U.S. Coast
Guard issued regulations requiring the implementation of certain security
requirements aboard vessels operating in waters subject to the jurisdiction of
the United States. Similarly, in December 2002, amendments to SOLAS created a
new chapter of the convention dealing specifically with maritime security. The
new chapter became effective in July 2004 and imposes various detailed security
obligations on vessels and port authorities, most of which are contained in the
newly created International Ship and Port Facilities Security Code, or the ISPS
Code. The ISPS Code is designed to protect ports and international shipping
against terrorism. After July 1, 2004, to trade internationally, a vessel must
attain an International Ship Security Certificate from a recognized security
organization approved by the vessel's flag state. Among the various requirements
are:

     o    on-board installation of automatic identification systems to provide a
          means for the automatic transmission of safety-related information
          from among similarly equipped ships and shore stations, including
          information on a ship's identity, position, course, speed and
          navigational status;

     o    on-board installation of ship security alert systems, which do not
          sound on the vessel but only alerts the authorities on shore;

     o    the development of vessel security plans;

     o    ship identification number to be permanently marked on a vessel's
          hull;

     o    a continuous synopsis record kept onboard showing a vessel's history
          including, name of the ship and of the state whose flag the ship is
          entitled to fly, the date on which the ship was registered with that
          state, the ship's identification number, the port at which the ship is
          registered and the name of the registered owner(s) and their
          registered address; and

     o    compliance with flag state security certification requirements.

     The U.S. Coast Guard regulations, intended to align with international
maritime security standards, exempt from MTSA vessel security measures non-U.S.
vessels that have on board, as of July 1, 2004, a valid ISSC attesting to the
vessel's compliance with SOLAS security requirements and the ISPS Code. Magnus
Carriers has implemented the various security measures addressed by MTSA, SOLAS
and the ISPS Code, and our fleet is in compliance with applicable security
requirements.

Inspection by Classification Societies

     Every seagoing vessel must be "classed" by a classification society. The
classification society certifies that the vessel is "in class," signifying that
the vessel has been built and maintained in accordance with the rules of the
classification society and complies with applicable rules and regulations of the
vessel's country of registry and the international conventions of which that
country is a member. In addition, where surveys are required by international
conventions and corresponding laws and ordinances of a flag state, the
classification society will undertake them on application or by official order,
acting on behalf of the authorities concerned.

     The classification society also undertakes on request other surveys and
checks that are required by regulations and requirements of the flag state.
These surveys are subject to agreements made in each individual case and/or to
the regulations of the country concerned.

     For maintenance of the class, regular and extraordinary surveys of hull,
machinery, including the electrical plant, and any special equipment classed are
required to be performed as follows:

     Annual Surveys: For seagoing ships, annual surveys are conducted for the
hull and the machinery, including the electrical plant, and where applicable for
special equipment classed, at intervals of 12 months from the date of
commencement of the class period indicated in the certificate.

     Intermediate Surveys: Extended annual surveys are referred to as
intermediate surveys and typically are conducted two and one-half years after
commissioning and each class renewal. Intermediate surveys may be carried out on
the occasion of the second or third annual survey.

     Class Renewal Surveys: Class renewal surveys, also known as special
surveys, are carried out for the ship's hull, machinery, including the
electrical plant, and for any special equipment classed, at the intervals
indicated by the character of classification for the hull. At the special
survey, the vessel is thoroughly examined, including audio-gauging to determine
the thickness of the steel structures. Should the thickness be found to be less
than class requirements, the classification society would prescribe steel
renewals. The classification society may grant a one-year grace period for
completion of the special survey. Substantial amounts of money may have to be
spent for steel renewals to pass a special survey if the vessel experiences
excessive wear and tear. In lieu of the special survey every four or five years,
depending on whether a grace period was granted, a shipowner has the option of
arranging with the classification society for the vessel's hull or machinery to
be on a continuous survey cycle, in which every part of the vessel would be
surveyed within a five-year cycle.

     At an owner's application, the surveys required for class renewal may be
split according to an agreed schedule to extend over the entire period of class.
This process is referred to as continuous class renewal.

     All areas subject to survey as defined by the classification society are
required to be surveyed at least once per class period, unless shorter intervals
between surveys are prescribed elsewhere. The period between two subsequent
surveys of each area must not exceed five years.

     Most vessels are also dry-docked every 30 to 36 months for inspection of
the underwater parts and for repairs related to inspections. If any defects are
found, the classification surveyor will issue a "recommendation" which must be
rectified by the ship owner within prescribed time limits.

     Most insurance underwriters make it a condition for insurance coverage that
a vessel be certified as "in class" by a classification society which is a
member of the International Association of Classification Societies. All our
vessels are certified as being "in class" by Lloyd's Register of Shipping (one
vessel) and Det norske Veritas (eight vessels). All new and secondhand vessels
that we purchase must be certified prior to their delivery under our standard
contracts.

Risk of Loss and Liability Insurance

     The operation of any cargo vessel includes risks such as mechanical
failure, collision, property loss, cargo loss or damage and business
interruption due to political circumstances in foreign countries, hostilities
and labor strikes. In addition, there is always an inherent possibility of
marine disaster, including oil spills and other environmental mishaps, and the
liabilities arising from owning and operating vessels in international trade.
OPA, which imposes virtually unlimited liability upon owners, operators and
demise charterers of any vessel trading in the United States exclusive economic
zone for certain oil pollution accidents in the United States, has made
liability insurance more expensive for ship owners and operators trading in the
United States market. While we carry loss of hire insurance to cover 100% of our
fleet, we may not be able to maintain this level of coverage. Furthermore, while
we believe that our present insurance coverage is adequate, not all risks can be
insured, and there can be no guarantee that any specific claim will be paid, or
that we will always be able to obtain adequate insurance coverage at reasonable
rates.

Hull and Machinery Insurance

     We have obtained marine hull and machinery and war risk insurance, which
include the risk of actual or constructive total loss, for all of the vessels in
our fleet. The vessels in our fleet are each covered up to at least fair market
value, with deductibles of $350,000 per vessel per incident. We also arranged
increased value coverage for each vessel. Under this increased value coverage,
in the event of total loss of a vessel, we will be able recover for amounts not
recoverable under the hull and machinery policy by reason of any
under-insurance.

Protection and Indemnity Insurance

     Protection and indemnity insurance is provided by mutual protection and
indemnity associations, or P&I Associations, which covers our third party
liabilities in connection with our shipping activities. This includes third
party liability and other related expenses of injury or death of crew,
passengers and other third parties, loss or damage to cargo, claims arising from
collisions with other vessels, damage to other third party property, pollution
arising from oil or other substances, and salvage, towing and other related
costs, including wreck removal. Protection and indemnity insurance is a form of
mutual indemnity insurance, extended by protection and indemnity mutual
associations, or "clubs." Our coverage, except for pollution, is unlimited.

     Our current protection and indemnity insurance coverage for pollution is $1
billion per vessel per incident. The fourteen P&I Associations that comprise the
International Group insure approximately 90% of the world's commercial tonnage
and have entered into a pooling agreement to reinsure each association's
liabilities. Each P&I Association has capped its exposure to this pooling
agreement at $4.25 billion. As a member of a P&I Association, which is a member
of the International Group, we are subject to calls payable to the associations
based on its claim records as well as the claim records of all other members of
the individual associations, and members of the pool of P&I Associations
comprising the International Group.

Competition

     We operate in markets that are highly competitive and based primarily on
supply and demand. We compete for charters on the basis of price, vessel
location, size, age and condition of the vessel, as well as on our reputation as
an operator. We arrange our time charters and voyage charters in the spot market
through the use of brokers, who negotiate the terms of the charters based on
market conditions. We compete primarily with owners of tankers in the Suezmax
and class size. Ownership of tankers is highly fragmented and is divided among
major oil companies and independent vessel owners.

Permits and Authorizations

     We are required by various governmental and quasi-governmental agencies to
obtain certain permits, licenses and certificates with respect to our vessels.
The kinds of permits, licenses and certificates required depend upon several
factors, including the commodity transported, the waters in which the vessel
operates, the nationality of the vessel's crew and the age of a vessel. We have
been able to obtain all permits, licenses and certificates currently required to
permit our vessels to operate. Additional laws and regulations, environmental or
otherwise, may be adopted which could limit our ability to do business or
increase the cost of us doing business.

C. ORGANIZATIONAL STRUCTURE

     Prior to September 30, 1997, the Company was a wholly owned subsidiary of
Ugland Nordic Shipping ASA, or UNS, a Norwegian shipping company whose shares
were listed on the Oslo Stock Exchange. On September 30, 1997, 11,731,613
warrants for the purchase of the Company's common shares, which had been sold to
the public in 1995, were exercised. Until May 30, 2003, UNS acted as the
Manager, and provided managerial, administrative and advisory services to the
Company pursuant to the Management Agreement. Since May 30, 2003, Scandic
American Shipping Ltd. has acted as the Company's Manager, and provides such
services pursuant to the Management Agreement. The Management Agreement was
amended on October 12, 2004 to further align the Manager's interests with those
of the Company as a shareholder of the Company. See Item 4--Information on the
Company -- Business Overview --The Management Agreement.

D. PROPERTY, PLANT AND EQUIPMENT

     See Items 4 - Information on the Company - Business Overview - Our Fleet,
for a description of our vessels. The vessels are mortgaged as collateral under
the new credit facility.



ITEM 4A. UNRESOLVED STAFF COMMENTS

         None.

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A. OPERATING RESULTS

     We present our income statement using voyage revenues and voyage expenses.
The Company's vessels are operated under bareboat charters, spot related time
charters and spot charters. Under a bareboat charter the charterer pays
substantially all of the vessel voyage and operating costs. Under a spot related
time charter, the charterer pays substantially all of the vessel voyage costs.
Under a spot charter, the vessel owner pays all such costs. Vessel voyage costs
consist primarily of fuel, port charges and commissions.

     Since the amount of voyage expenses that we incur for a charter depends on
the type of the charter, we use net voyage revenues to provide comparability
among the different types of charters. Management believes that net voyage
revenue, a non-GAAP financial measure, provides more meaningful disclosure than
voyage revenues, the most directly comparable financial measure under accounting
principles generally accepted in the United States, or US GAAP because it
enables us to compare the profitability of our vessels which are employed under
bareboat charters, spot related on time charters and spot charters. Net voyage
revenues divided by the number of days on the charter provides the Time Charter
Equivalent (TCE) Rate. For bareboat charters operating costs must be added in
order to calculate TCE rates. Net voyage revenues and TCE rates are widely used
by investors and analysts in the tanker shipping industry for comparing the
financial performance of companies and for preparing industry averages. We
believe that our method of calculating net voyage revenue is consistent with
industry standards. The following table reconciles our net voyage revenues to
voyage revenues. In 2004, our calculation methodology for net voyage revenues
was adjusted to better reflect the various commission schemes under which we
operate.

<TABLE>

                                                    Year Ended December     Year Ended December      Year Ended December 31,
All amounts in USD '000                                   31, 2006                31, 2005                    2004
-----------------------                                   --------                --------                    ----

<S>                                                            <C>                     <C>                         <C>
Voyage Revenue                                                 175,520                 117,110                     67,452
Voyage Expenses                                                (40,172)                (30,981)                   (4,925)

Net Voyage Revenue                                             135,348                  86,129                     62,527
</TABLE>


YEAR ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31, 2005

     Voyage revenues increased by 49.8% to $175.5 million in 2006 from $117.1
million in 2005. Net voyage revenues increased by 57.1% to $135.3 million in
2006 from $86.1 million in 2005. Voyage expenses increased by 29.7% to $40.2
million in 2006 from $31.0 million in 2005.The increase in net voyage revenues
was primarily due to the expansion of the fleet resulting in an increase in the
number of revenue days by 48.8% from 2,193 days to 3,264 days. The Company took
delivery of one vessel in April 2006, two vessels in November 2006 and one
vessel in December 2006.

     Vessel operating expenses were $21.1 million for the year ended December
31, 2006 compared to $11.2 million for the year ended December 31, 2005. The
increase is primarily due to the addition of four vessels as described above.
The average operating expenses for the vessels were approximately $7,200 per day
per vessel during fiscal year 2006 compared to $6,200 per day per vessel for the
fiscal year 2005. The increase in daily operating expenses is primarily due to
an industry wide price increase on the vessel operating costs, in particular
crewing costs, lubricating oil costs and repair and maintenance costs.

     General and administrative expenses were $12.8 million for the year ended
December 31, 2006 compared to $8.5 million for the year ended December 31, 2005.
The increase in general and administrative expenses was primarily due to a
non-cash charge related to stock-based compensation to, our Manager, Scandic
American Shipping Ltd., of $6.3 million associated with the two follow-on
offerings in 2006 compared to $3.6 million for the one follow-on offering in
2005. See Item 4--Information on the Company -- Business Overview --The
Management Agreement and Note 5 to our audited financial statements for further
details of the general and administrative expenses.

     Depreciation expense was $29.3 million for the year ended December 31, 2006
compared to $17.5 million for the year ended December31, 2005. The increase is
primarily due to the addition of four vessels as described above.

     Net operating income for the year ended December 31, 2006 increased 47.8%
compared to year ended December 31, 2005 from $48.9 million to $72.2 million
primarily due to increased revenues resulting from an increase in the number of
revenue days from 2,193 days to 3,264 days offset by increased vessel operating
expenses as described above.

     Interest income was $1.6 million for the year ended December 31, 2006
compared to $0.8 million for the year ended December 31, 2005. The increase is
primarily due to excess cash in interim periods in connection with the two
follow-on offerings and the timing of subsequent payments for vessels acquired
during 2006.

     Interest expense was $6.3 million for the year ended December31, 2006
compared to $3.4 million for the year ended December 31, of 2005. The increase
is primarily due to an increase in borrowings under the 2005 credit facility in
order to partially finance expansion of the fleet. Our policy is to maintain a
debt level of approximately $15 million per vessel in the current market
conditions.

YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED DECEMBER 31, 2004

     Voyage revenues increased by 73.6% to $117.1 million in 2005 from $67.5
million in 2004. Net voyage revenues increased by 37.7% to $86.1 million in 2005
from $62.5 million in 2004. Voyage expenses increased by 529% to $31.0 million
in 2005 from $4.9 million in 2004. The increase in voyage revenues and net
voyage revenues is primarily due to the growth of the Company. The Company
increased its fleet from 4 vessels as at December 31, 2004 or 1,133 ship days,
meaning the number of days the Company's vessels were generating revenue, during
2004 to 8 vessels as at December 31, 2005 or 2,193 ship days during 2005. This
represents an increase in cargo capacity of 93.5%.

     Vessel operating expenses were $11.2 million for 2005 compared to $2.0
million for 2004. The increase is due to the change in the Company's current
operating structure as of October 2004 from a passive leasing company into an
operating company. Prior to October 2004 the original three vessels were on
bareboat charter to BP Shipping. Under bareboat charter agreements all vessel
operating expenses are paid by the charterer.

     General and administrative expenses were $8.5 million for 2005 compared to
$10.9 million for 2004. The decrease was due to the non-cash charge of $9.2
million in 2004 compared to $3.6 million in 2005 that is linked to a change in
the compensation scheme for our Manager. This decrease was off-set by a full
year of general and administrative expenses reflecting the new operating
structure of the Company as described above. The original incentive plan for the
Manager was a revenue based cash commission structure. The Manager agreed to
eliminate the commission. The cash commission was replaced by restricted share
issuances to the Manager of 2% of the Company's outstanding common shares from
time to time in order to align the interests of the Manager and the Company.
These restricted shares are non-transferable for three years from issuance. In
connection with the transition to an operating company, the Company introduced a
stock incentive plan with 400,000 shares reserved for issuance of which 320,000
stock options were granted at December 31, 2005. The initial strike price for
options granted in 2005 was equal to $38.75, which was the offering price per
share of our common shares in our follow-on offering in November 2004. The
Company has recorded a compensation cost of $1.4 million associated with the
employee stock option awards. For further information, see Item 6 -- Directors,
Senior Management and Employees -- 2004 Stock Incentive Plan.

     Depreciation expense, which includes depreciation of vessels and
amortization of drydockings, increased from $6.9 million for 2004 to $17.5
million for 2005. The increase is due to the increase in book value of our fleet
as a result of our acquisitions of four vessels during 2005 compared to
acquisition of one vessel during 2004.

     Net operating income for 2005 increased 14.3% from the comparable period in
2004 from $42.8 million to $48.9 million primarily due to increased revenue as a
result of an increase in revenue days from 1,133 days to 2,193 days offset
partially by increased vessel operating expenses from $1.9 million to $11.2
million as described above.

     Interest expense increased from $2.0 million for 2004 to $3.5 million for
2005. The increase is primarily due to borrowings under our 2005 Credit Facility
of $173.5 million during the year ended December 31, 2006 compared to borrowings
under our previous credit facility of $130.0 million for the year ended December
31, 2005. This increase resulted from the decision of the Board to keep
non-retiring debt on the balance sheet in the region of $15 million per vessel
which we believe is an appropriate debt to equity ratio for the Company.

B. LIQUIDITY AND CAPITAL RESOURCES

Our Credit Facility

     In September 2005, we entered into a $300 million revolving credit
facility, which we refer to as the 2005 Credit Facility. The 2005 Credit
Facility became effective as of October 2005 and replaced our previous credit
facility from October 2004, a portion of which was set to mature in October
2005. The 2005 Credit Facility matures in September 2010.

     The 2005 Credit Facility provides funding for future vessel acquisitions
and general corporate purposes. The 2005 Credit Facility commitment is
guaranteed by the lender and the Company has no repayment obligation during the
five year term. Amounts borrowed under the 2005 Credit Facility bear interest at
an annual rate equal to LIBOR plus a margin between 0.7% and 1.2% (depending on
the loan to vessel value ratio). We are obligated to pay a commitment fee of 30%
of the applicable margin on any undrawn amounts.

     In September 2006, we increased our 2005 Credit Facility to $500 million;
the other material terms of the 2005 Credit Facility were not amended. At
December 31, 2006 we have drawn $173.5 million from this facility.

     Borrowings under the 2005 Credit Facility are secured by mortgages over our
existing and new vessels and assignments of earnings and insurances, and
drawings will be available subject to loan to vessel value ratios. We are
subject to mandatory prepayment upon the occurrence of certain events. The terms
and conditions of the 2005 Credit Facility require compliance with certain
restrictive covenants, which we feel are consistent with loan facilities
incurred by other shipping companies. Under the 2005 Credit Facility, we are,
among other things, required to:

     o    maintain certain loan to vessel value ratios,

     o    maintain a book equity of no less than $150.0 million,

     o    remain listed on a recognized stock exchange, and

     o    obtain the consent of the lenders prior to creating liens on or
          disposing of our vessels.

     The 2005 Credit Facility provides that we may not pay dividends if
following such payment we would not be in compliance with certain financial
covenants or there is a default under the 2005 Credit Facility.

YEAR ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31, 2005

     Cash flows provided by operating activities increased by 109.7% in fiscal
year 2006 to $107.1 million from $51.1 million in fiscal year 2005 primarily due
to the addition of four vessels as described above.

     Cash flows provided by financing activities decreased 8.1% in fiscal year
2006 to $208.2 million compared to $226.6 million in fiscal year 2005. The net
decrease was attributable to (i) proceeds from two follow-on offerings of $288.3
million, (ii) net proceeds from drawdowns under the 2005 Credit Facility of
$43.5 million offset by (iii) dividends paid of $122.6 million, and (iv) the
payment of credit facility costs of $0.6 million related to the increase in the
2005 Credit Facility from $300 million to $500 million.

     Cash flows used in investing activities increased by 8.0% in fiscal year
2006 to $317.8 million compared to $294.1 million in fiscal year 2005. The
increase was primarily due to higher vessel acquisition costs in fiscal year
2006 compared to fiscal year 2005.

     In March 2006, the Company sold 4,297,500 shares (including the
over-allotment) in a public offering in the U.S. to repay outstanding debt and
to finance the acquisition of the ninth vessel that was delivered to us in April
2006. The offering was priced at $28.50 per share, and net proceeds to the
Company were $115.2 million.

     In October 2006, the Company sold 5,750,000 shares (including the
over-allotment) in a public offering in the U.S. to partly finance the
acquisition of the tenth, eleventh and twelfth vessels that were delivered to us
in November 2006 and December 2006. The offering was priced at $32.00 per share,
and net proceeds to the Company were $173.1 million.

     The Company believes that its borrowing capacity under the 2005 Credit
Facility, together with its working capital, are sufficient to fund its ongoing
operations and commitment for capital expenditures.

YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED DECEMBER 31, 2004

     Cash flows provided by operating activities decreased by 18.7% in 2005 to
$51.1 million compared to $62.8 million in 2004 primarily derived from the
growth of the Company as described above.

     Cash flow provided from financing activities was $226.6 million for 2005
compared to $33.5 million for the same period in 2004. The increase was due to
(i) increase in proceeds from 2004 to 2005 of $49.8 million from a follow-on
offering, (ii) increase from 2004 to 2005 in net proceeds from the drawdown of
the credit facility of $160.0 million, offset by (iii) increased dividends paid
from 2004 to 2005 of $17.1 million and (iv) decrease from 2004 to 2005 in
payment of loan facility costs of $0.4 million in respect of our $300 million
Credit Facility.

     Cash flow used in investing activities increased by 344.7% in 2005 to
$294.2 million compared to $66.1 million in 2004. The increase represents the
acquisition costs of the four vessels acquired during 2005.

C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

     Not applicable

D. TREND INFORMATION

     The oil tanker industry has been highly cyclical, experiencing volatility
in charterhire rates and vessel values resulting from changes in the supply of
and demand for crude oil and tanker capacity. See Item 4. Information on the
Company - Business Overview - The Tanker Market 2006.

E. OFF BALANCE SHEET ARRANGEMENTS

     We have not created, and are not party to, any special-purpose or
off-balance sheet entities for the purpose of raising capital, incurring debt or
operating our business. We do not have any arrangements or relationship with
entities that are not consolidated into our financial statements that are
reasonably likely to materially affect our liquidity or the availability of
capital resources.

F. DISCLOSURE OF CONTRACTUAL OBLIGATIONS

     As of December 31, 2006 significant contractual obligations consisted of
our obligations as borrower under our 2005 Credit Facility and our obligations
under the Management Agreement with Scandic American Shipping Ltd.

     The following table sets out long-term financial and other commercial
obligations outstanding as of December 31, 2006 (all figures in USD '000)

Payment Due by Period:
<TABLE>

                                                                                 2008                 2011              2014
Contractual Obligations                    Total              2007              -2010                -2013             -2019
-----------------------                    -----              ----              -----                -----             -----
<S>                                      <C>                     <C>          <C>                        <C>               <C>
Credit Facility (1)                      173,500                 0            173,500                    0                 0
Interest Payments (2)                     35,994             9,710             26,284                    0                 0
Commitment Fees (3)                        2,577               695              1,882                    0                 0
Management Fees (4)                        3,463               163                675                  675             1,950

Total                                    215,534            10,568            202,341                  675             1,950
</TABLE>


Notes:

(1)  Refers to our obligation to repay indebtedness outstanding as of December
     31, 2006.

(2)  Refers to estimated interest payments over the term of the indebtedness
     outstanding as of December 31, 2006 assuming a weighted average interest
     rate of 5.52% per annum.

(3)  Refers to estimated committment fees over the term of the indebtedness
     outstanding as of December 31, 2006.

(4)  Refers to the management fees payable to Scandic American Shipping Ltd.
     under the Management Agreement with the Manager.

CRITICAL ACCOUNTING ESTIMATES

     We prepare our financial statements in accordance with accounting
principles generally accepted in the United States of America (US GAAP).
Following is a discussion of the accounting policies that involve a high degree
of judgment and the methods of their application. For a further description of
our material accounting policies, please read Item 18 - Financial Statements--
Note 1 - Summary of Significant Accounting Policies.

Revenue recognition

     We generate a majority of our revenues from vessels operating in pools and
from spot charters. Within the shipping industry, the two methods used to
account for voyage revenues and expenses are the percentage of completion and
the completed voyage methods. Most shipping companies, including our pool
managers and spot charter managers are using the percentage of completion
method. In applying the percentage of completion method, we believe that in most
cases the discharge-to-discharge basis of calculating voyages more accurately
reflects voyage results than the load-to-load basis. At the time of cargo
discharge, we generally have information about the next load port and expected
discharge port, whereas at the time of loading we are normally less certain what
the next load port will be.

     If actual results are not consistent with our estimates in applying the
percentage of completion method, our revenues could be overstated or understated
for any given period by the amount of such difference.

Long-lived assets and impairment

     A significant part of the Company's total assets consists of our vessels.
The oil tanker market is highly cyclical and the useful lives of our vessels are
principally dependent on the technical condition of our vessels and other
factors, such as future market demand for oil and future market supply of tanker
capacity.

     Our vessels are evaluated for impairment whenever indicators of impairment
exist. When an impairment indicator is present, the Company must evaluate
whether the carrying amounts of the vessels are recoverable. If an impairment
test is warranted, we assess whether the undiscounted cash flows expected to be
generated by our long-lived assets exceed their carrying value. If this
assessment indicates that the long-lived assets are impaired, the assets are
written down to their fair value. These assessments are based on our judgment,
which includes the estimate of future cash flows from long-lived assets.

     We are not aware of any indicators of impairments nor any regulatory
changes or environmental liabilities that we anticipate will have a material
impact on our current or future operations.

Depreciable lives

     Management uses considerable judgment when establishing the depreciable
lives of our vessels. In order to estimate useful lives of our vessels,
Management must make assumptions about future market conditions in the oil
tanker market. The Company considers the establishment of depreciable lives to
be a critical accounting estimate.

     We are not aware of any regulatory changes or environmental liabilities
that we anticipate will have a material impact on our current or future
operations.


Drydocking

     Generally, we drydock each vessel every two and a half to five years. We
capitalize a substantial portion of the costs we incur during drydocking and
amortize those costs on a straight-line basis from the completion of a
drydocking to the estimated completion of the next drydocking. We expense costs
related to routine repairs and maintenance incurred during drydocking that do
not improve or extend the useful lives of the assets.

     If we change our estimate of the next drydock date we will adjust our
annual amortization of drydocking expenditures.


RECENT ACCOUNTING PRONOUNCEMENTS

     In July 2006, the FASB issued FASB Interpretation No. 48 "Accounting for
Uncertainty in Income Taxes" ("FIN 48"), which clarifies the criteria that must
be met prior to recognition of the financial statement benefit of a position
taken in a tax return. FIN 48 provides a benefit recognition model with a
two-step approach consisting of a "more-likely-than-not" recognition criteria,
and a measurement attribute that measures the position as the largest amount of
tax benefit that is greater than 50% likely of being realized upon ultimate
settlement. FIN 48 also requires the recognition of liabilities created by
differences between tax positions taken in a tax return and amounts recognized
in the financial statements. FIN 48 is effective as of the beginning of the
first annual period beginning after December 15, 2006. The Company is currently
assessing the impact of adopting FIN 48 on the financial condition, results of
operations, and cash flows of the Company

In September 2006, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin("SAB") No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements" ("SAB 108"), which provides interpretive guidance on the
consideration of the effects of prior year misstatements in quantifying current
year misstatements for the purpose of a materiality assessment. SAB 108 is
effective for the Company as of December 31, 2006. There was no impact as a
result of the Company's adoption of SAB 108 on its consolidated financial
statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurement,"
("SFAS 157") which defines fair value, establishes a framework for measuring
fair value and expands disclosures about assets and liabilities measured at fair
value. This Statement does not require any new fair value measurements. SFAS 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007. The Company is currently assessing the impact of SFAS 157,
and has not yet determined the impact that its adoption will have on its results
of operations and financial position.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 permits
entities to choose to measure many financial instruments and certain other items
at fair value that are not currently required to be measured at fair value. SFAS
159 also establishes presentation and disclosure requirements designed to
facilitate comparisons between entities that choose different measurement
attributes for similar types of assets and liabilities. SFAS 159 is effective
for fiscal years beginning after November 15, 2007. The Company is currently
assessing the impact of SFAS 157, and has not yet determined the impact that its
adoption will have on its results of operations and financial position.

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. DIRECTORS AND SENIOR MANAGEMENT

     Directors and Senior Management of the Company and the Manager

     Pursuant to the Management Agreement with Scandic American Shipping Ltd.,
or the Manager, the Manager provides management, administrative and advisory
services to us. The Manager is owned by Herbjorn Hansson, our Chairman and Chief
Executive Officer, and Andreas Ove Ugland, one of our directors, and may engage
in business activities other than with respect to the Company.

     Set forth below are the names and positions of the directors of the Company
and executive officers of the Company and the Manager. The directors of the
Company are elected annually, and each director elected holds office until a
successor is elected. Officers of both the Company and the Manager are elected
from time to time by vote of the respective board of directors and hold office
until a successor is elected.

                                   The Company
                                   -----------

Name                          Age     Position
----                          ---     --------

Herbjorn Hansson              59      Chairman, Chief Executive Officer,
                                      President and Director

Turid M. Sorensen             47      Chief Financial Officer

Rolf Amundsen                 62      Chief Investor Relations Officer

Hon. Sir David Gibbons        79      Director

Andreas Ove Ugland            52      Director

Torbj0rn Glads0               60      Director

Andrew W. March               51      Director

Paul J. Hopkins               59      Director

George C. Lodge               79      Director


                                   The Manager
                                   -----------

Name                          Age     Position
----                          ---     --------

Herbjorn Hansson              59      Director, President and Chief Executive
                                      Officer

Turid M. Sorensen             47      Chief Financial Officer

Rolf Amundsen                 62      Chief Investor Relations Officer

Frithjof Bettum               45      Vice President Technical Operations &
                                      Chartering

Jan Erik Langangen            57      Executive Vice President--Business
                                      Development and Legal

     Certain biographical information with respect to each director and
executive officer of the Company and the Manager listed above is set forth
below.

      Herbjorn Hansson earned his M.B.A. at the Norwegian School of Economics
and Business Administration and Harvard Business School. In 1974 he was employed
by the Norwegian Shipowners' Association. In the period from 1975 to 1980, he
was Chief Economist and Research Manager of INTERTANKO, an industry association
whose members control about 70% of the world's independently owned tanker fleet,
excluding state owned and oil company fleets. During the 1980s, he was Chief
Financial Officer of Kosmos/Andres Jahre, at the time one of the largest
Norwegian based shipping and industry groups. In 1989, Mr. Hansson founded
Ugland Nordic Shipping AS, or UNS, which became one of the world's largest
owners of specialized shuttle tankers. He served as Chairman in the first phase
and as Chief Executive Officer as from 1993 to 2001 when UNS, under his
management, was sold to Teekay Shipping Corporation, or Teekay, for an
enterprise value of $780.0 million. He continued to work with Teekay, most
recently as Vice Chairman of Teekay Norway AS, until he started working
full-time for the Company on September 1, 2004. Mr. Hansson is the founder and
has been Chairman and Chief Executive Officer of the Company since its
establishment in 1995. He also is a member of various governing bodies of
companies within shipping, insurance, banking, manufacturing,
national/international shipping agencies including classification societies and
protection and indemnity associations. Mr. Hansson is fluent in Norwegian and
English, and has a command of German and French for conversational purposes.

      Turid M. Sorensen was appointed Chief Financial Officer by the Board of
Directors on February 6, 2006. She has a bachelor degree in Business
Administration from the Norwegian School of Management. Ms. Sorensen has 20
years of experience in the shipping industry. During the period from 1984 to
1987, she worked for Anders Jahre AS and Kosmos AS in Norway and held various
positions within accounting and information technology. In the period from 1987
to 1995, Ms. Sorensen was Manager of Accounting and IT for Skaugen PetroTrans
Inc., in Houston, Texas. After returning to Norway she was employed by Ugland
Nordic Shipping ASA and Teekay Norway AS as Vice President, Accounting. From
October 2004 until her appointment as Chief Financial Officer in February 2006,
she served as our Treasurer and Controller.

      Rolf Amundsen was appointed Chief Investor Relations Officer and Advisor
to the Chairman by the Board of Directors on February 6, 2006 and prior to that
time served as our Chief Financial Officer from June 2004. Mr. Admundsen has an
M.B.A. in economics and business administration, and his entire career has been
in international banking. Previously, Mr. Amundsen has served as the president
of the financial analysts society in Norway. Mr. Amundsen served as the chief
executive officer of a Nordic investment bank for many years, where he
established a large operation for the syndication of international shipping
investments.

      Andreas Ove Ugland has been a director of the Company since February 1997.
Mr. Ugland has also served as director and Chairman of Ugland International
Holding plc, a shipping/transport company listed on the London Stock Exchange,
Andreas Ugland & Sons AS, Grimstad, Norway, H0egh Ugland Autoliners AS, Oslo and
Buld Associates Inc., Bermuda. Mr. Ugland has had his whole career in shipping
in the Ugland family owned shipping group.

      Andrew W. March has been a director of the Company since June 2005. Mr.
March also currently serves in a management position with Vitol S.A., an
international oil trader, involved in supply, logistics and transport and as a
director for Imarex, an electronic trading platform for freight derivatives.
From 1978 to 2004, Mr. March served in various positions with subsidiaries of BP
p.l.c., an international oil major company. Most recently, from January 2001 to
2004, Mr. March was Commercial Director of BP Shipping Ltd., responsible for all
aspects of the business including long term strategy. From 1986 to 2000, Mr.
March was employed in various positions with BP Trading, serving as Global
Product Trading Manager from 1999. Mr. March received his MBA from Liverpool
University.

     Sir David Gibbons has been a director of the Company since September 1995.
Sir David served as the Premier of Bermuda from August 1977 to January 1982. Sir
David has served as Chairman of The Bank of N.T. Butterfield and Son Limited
from 1986 to 1997, Chairman of Colonial Insurance Co. Ltd. since 1986 and as
Chief Executive Officer of Edmund Gibbons Ltd. since 1954. Sir David Gibbons is
a member of our Audit Committee.

      George C. Lodge has been a director of the Company since September 1995.
Professor Lodge has been a member of the Harvard Business School faculty since
1963. He was named associate professor of business administration at Harvard in
1968 and received tenure in 1972.

      Paul J. Hopkins has been a director of the Company since June 2005. Mr.
Hopkins is also a Vice President and a director of Corridor Resources Inc., a
Canadian publicly traded exploration and production company. From 1989 through
1993 he served with Lasmo as Project Manager during the start-up of the
Cohasset/Panuke oilfield offshore Nova Scotia, the first offshore oil production
in Canada. Earlier, Mr. Hopkins served as a consultant on frontier engineering
and petroleum economic evaluations in the international oil industry. Mr.
Hopkins was seconded to Chevron UK in 1978 to assist with the gas export system
for the Ninian Field. From 1973, he was employed with Ranger Oil (UK) Limited,
being involved in the drilling and production testing of oil wells in the North
Sea. Through the end of 1972 he worked with Shell Canada as part of its offshore
Exploration Group.

      Torbj0rn Glads0 has been a director of the Company since October 2003. Mr.
Gladso is a partner in Saga Corporate Finance AS. He has extensive experience
within investment banking since 1978. He has been the Chairman of the Board of
the Norwegian Register of Securities and Vice Chairman of the Board of Directors
of the Oslo Stock Exchange. Mr. Glads0 is Chairman of our Audit Committee.

     Jan Erik Langangen is the Executive Vice President, Business Development
and Legal, of the Manager. Mr. Langangen previously served as the Chief
Financial Officer from 1979 to 1983, and as Chairman of the Board from 1987 to
1992, of Statoil, an oil and gas company that is controlled by the Norwegian
government and that is the largest company in Norway. He also served as Chief
Executive Officer of UNI Storebrand from 1985 to 1992. Mr. Langangen was also
Chairman of the Board of the Norwegian Governmental Value Commission from 1998
to 2001. Mr. Langangen is a partner of Langangen & Helset, a Norwegian law firm
and previously was a partner of the law firm Langangen & Engesaeth from 1996 to
2000 and of the law firm Thune & Co. from 1994 to 1996. Mr. Langangen received a
Masters of Economics from The Norwegian School of Business Administration and
his law degree from the University of Oslo.

      Frithjof Bettum was appointed Vice President--Technical Operations &
Chartering of the Manager on October 1, 2005. Mr. Bettum has a Mechanical
Engineering degree from Vestfold University College. Mr. Bettum has 21 years of
experience in the shipping and the offshore business. From 1984 to 1992, Mr.
Bettum was employed by Allum Engineering AS in Sandefjord, Norway where he
served as project manager. At Allum Engineering AS Mr. Bettum worked on projects
in the areas of engineering, the new building and conversion management of
shuttle tankers, Floating Production, Storage and Offloading (FPSO),
semi-submersible drilling units and the shore based manufacturer industry. From
1993 to 2001, Mr. Bettum was employed by Nordic American Shipping AS (which
later became Ugland Nordic Shipping ASA) where he served as Vice
President--Offshore. In 2004, Mr. Bettum joined Teekay Norway AS as Vice
President Offshore where he was responsible for business development, the daily
operations of the company and the conversion of shuttle tankers and offshore
units.

B. COMPENSATION

Compensation of Directors and Officers

     During 2006, the six non-employee directors received, in the aggregate,
approximately $280,000 in cash fees for their services as directors. The Board
consists of seven directors of which each of the non-employee directors receives
a fee at the annual rate of $60,000 effective from December 1, 2006. We do not
pay director fees to employee directors. We do, however, reimburse our directors
for all reasonable expenses incurred by them in connection with serving on our
board of directors. Directors may receive restricted shares or other grants
under our 2004 Stock Incentive Plan described below.

     We have an employment agreement with Herbjorn Hansson, our Chairman,
President and Chief Executive Officer, Turid M. Sorensen, our Chief Financial
Officer, and Rolf Amundsen, our Chief Investor Relations Officer and Advisor to
the Chairman. Mr. Hansson does not receive any additional compensation for
serving as a director or the Chairman of the Board. The aggregate compensation
of our executive officers during 2006 was $1.1 million. The aggregate
compensation of our executive officers is expected to be approximately $1.2
million during 2007. On certain terms the employment agreement with Mr. Hansson
may be terminated by us or Mr. Hansson upon six months' written notice to the
other party. The employment agreement with Ms. Sorensen may be terminated by us
or by Ms. Sorensen upon six months' written notice to the other party. The
employment agreement with Mr. Amundsen may be terminated by us or Mr. Amundsen
upon three months' written notice to the other party.

2004 Stock Incentive Plan

     Under the terms of the Company's 2004 Stock Incentive Plan, the directors,
officers and certain key employees of the Company and the Manager are eligible
to receive awards which include incentive stock options, non-qualified stock
options, stock appreciation rights, dividend equivalent rights, restricted
stock, restricted stock units and performance shares. A total of 400,000 common
shares are reserved for issuance upon exercise of options, as restricted share
grants or otherwise under the plan. Included under the 2004 Stock Incentive Plan
are options to purchase common shares at an exercise price equal to $38.75,
subject to annual downward adjustment if the payment of dividends in the related
fiscal year exceed a 3% yield calculated based on the initial strike price.
During 2005 the Company granted, under the terms of the Company's 2004 Stock
Incentive Plan, an aggregate of 320,000 stock options that the Board of
Directors had agreed to issue during 2004. These options will vest in equal
installments on each of the first four anniversaries of the grant dates. During
2006, the Company granted an aggregate of 16,700 restricted shares. No stock
options were granted in 2006.

C. BOARD PRACTICES

     The members of the Company's board of directors serve until the next annual
general meeting following his or her election to the board. The members of the
current board of directors were elected at the annual general meeting held in
2006. The Company's Board of Directors has established an Audit Committee,
consisting of two independent directors, Messrs. Glads0 and Gibbons. Mr. Glads0
serves as the audit committee financial expert. The members of the Audit
Committee receive additional remuneration of $25,000 in aggregate for serving on
the Audit Committee. The Audit Committee provides assistance to the Company's
board of directors in fulfilling their responsibility to shareholders, and
investment community relating to corporate accounting, reporting practices of
the Company, and the quality and integrity of the financial reports of the
Company. The Audit Committee, among other duties, recommends to the Company's
board of directors the independent auditors to be selected to audit the
financial statements of the Company; meets with the independent auditors and
financial management of the Company to review the scope of the proposed audit
for the current year and the audit procedures to be utilized; reviews with the
independent auditors, and financial and accounting personnel, the adequacy and
effectiveness of the accounting and financial controls of the Company; and
reviews the financial statements contained in the annual report to shareholders
with management and the independent auditors.

     Pursuant to an exemption for foreign private issuers, we are not required
to comply with many of the corporate governance requirements of the New York
Stock Exchange that are applicable to U.S. listed companies. A description of
the significant differences between our corporate governance practices and the
New York Stock Exchange requirements is available on our website www.nat.bm
under "Corporate Governance".

D. EMPLOYEES

     As at December 31, 2006, the Company had two full-time employees and one
part-time employee.

E. SHARE OWNERSHIP

     The following table sets forth information regarding the share ownership of
the Company as of June 26, 2007 by its directors and officers. All of the
shareholders are entitled to one vote for each share of common stock held.

Title         Identity of Person         No. of Shares      Percent of Class
-----         ------------------         -------------      ----------------

Common        Herbjorn Hansson(1)        538,282            2.00%
              Hon. Sir David Gibbons                        *
              Thorbjorn Gladso                              *
              Andrew  W. March                              *
              Paul J. Hopkins                               *
              George C. Lodge                               *
              Andreas Ove Ugland                            *
              Turid M. Sorensen                             *
              Rolf Amundsen                                 *


(1) Represents shares held by the Manager, of which Mr. Hansson is the sole
shareholder.

* Less than 1% of our outstanding shares of common stock.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. MAJOR SHAREHOLDERS

     The Company is not aware of any shareholder who beneficially owns 5% or
more of the Company's outstanding common stock.

B. RELATED PARTY TRANSACTIONS

     Since May 30, 2003, Scandic American Shipping Ltd., which is owned by
Messrs. Ugland and Hansson, has been our Manager pursuant to the Management
Agreement with the Company. See Item 4--Information on the Company -- Business
Overview -- The Management Agreement.

     Mr. Jan Erik Langangen, Executive Vice President of the Manager, is a
partner of Langangen & Helset Advokatfirma AS which in the past has also
provided and may continue to provide legal services to us.

C. INTERESTS OF EXPERTS AND COUNSEL

     Not Applicable

ITEM 8.  FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See Item 18

Legal Proceedings

     To the best of the Company's knowledge, the Company is not currently
involved in any legal or arbitration proceedings that would have a significant
effect on the Company's financial position or profitability and no such
proceedings are pending or known to be contemplated by governmental authorities.

Dividend Policy

     Our policy is to declare quarterly dividends to shareholders, substantially
equal to our net operating cash flow during the previous quarter after reserves
as the Board of Directors may from time to time determine are required, taking
into account contingent liabilities, the terms of our New Credit Facility, our
other cash needs and the requirements of Bermuda law. However, if we declare a
dividend in respect of a quarter in which an equity issuance has taken place, we
calculate the dividend per share as our net operating cash flow for the quarter
(after taking into account the factors described above) divided by the weighted
average number of shares over that quarter. Net operating cash flow represents
net income plus depreciation and non-cash administrative charges. The dividend
paid is the calculated dividend per share multiplied by the number of shares
outstanding at the end of the quarter.

     Total dividend paid out in 2006 was $122.6 million or $5.85 per share. The
dividend payments per share in 2006, 2005, 2004, 2003 and 2002 have been as
follows:

Period                 2006         2005       2004        2003       2002
------                 ----         ----       ----        ----       ----
1st Quarter            1.88        $1.62      $1.15       $0.63      $0.36
2nd Quarter            1.58         1.15       1.70        1.27       0.34
3rd Quarter            1.07         0.84       0.88        0.78       0.33
4th Quarter            1.32         0.60       1.11        0.37       0.32

Total                  5.85        $4.21      $4.84       $3.05      $1.35

     The dividend paid out in a quarter is based on the results of the previous
quarter.

     The Company declared a dividend of $1.00 per share for the first quarter of
2007 which was paid to shareholders in March 2007. In addition, the Company
declared a dividend of $1.248 per share for the second quarter of 2007, which
was paid to shareholders in May 2007.

B. SIGNIFICANT CHANGES

     Not applicable

ITEM 9.  THE OFFER AND LISTING

     Not applicable except for Item 9.A.4. and Item 9.C

Price Range of Common Shares

     Since November 16, 2004, the primary trading market for our common shares
has been the New York Stock Exchange, or the NYSE, on which our shares are
listed under the symbol "NAT." The primary trading market for our common shares
was the American Stock Exchange, or the AMEX, until November 15, 2004, at which
time trading of our common shares on the AMEX ceased. The secondary trading
market for our common shares was the Oslo Stock Exchange, or the OSE, until
January 14, 2005, at which time trading of our common share on the OSE ceased.

     The following table sets forth the high and low closing prices for shares
of our common stock as reported by the New York Stock Exchange, the American
Stock Exchange and the Oslo Stock Exchange:

<TABLE>

                                    NYSE            NYSE           AMEX           AMEX        OSE                   OSE
The year ended:                     HIGH             LOW           HIGH            LOW        HIGH                  LOW
---------------                     ----             ---           ----            ---        ----                  ---
<S>                                 <C>             <C>           <C>             <C>        <C>                   <C>
2002                                 N/A             N/A          $16.55         $ 9.86      NOK 145.00            NOK   90.00
2003                                 N/A             N/A          $16.90         $11.25      NOK 125.00            NOK   90.00
2004                               $41.30          $35.26         $41.59         $15.00      NOK 300.00            NOK 115.00
2005 (1)                           $56.68          $28.60           N/A            N/A       NOK 225.00            NOK 205.00
2006                               $41.70          $27.90           N/A            N/A              N/A                   N/A

                                   AMEX             AMEX          NYSE             NYSE           OSE                  OSE
For the quarter ended:             HIGH             LOW           HIGH              LOW          HIGH                  LOW
----------------------             ----             ---           ----              ---          ----                  ---

March 31, 2005 (1)                   N/A             N/A          $56.68           $35.95     NOK 225.00           NOK 205.00
June 30, 2005                        N/A             N/A          $49.79           $37.48          N/A                  N/A
September 30, 2005                   N/A             N/A          $46.48           $37.30          N/A                  N/A
December 31, 2005                    N/A             N/A          $37.90           $28.60          N/A                  N/A
March 31, 2006                       N/A             N/A          $36.92           $27.90          N/A                  N/A
June 30, 2006                        N/A             N/A          $36.60           $28.50          N/A                  N/A
September 30, 2006                   N/A             N/A          $41.70           $31.95          N/A                  N/A
December 31, 2006                    N/A             N/A          $36.40           $31.00          N/A                  N/A
</TABLE>

----------
(1)  The OSE numbers for 2005 are based on trading through January 14, 2005

The high and low market prices for our common shares by month since December
2006 have been as follows:

For the month:
                                                  NYSE            NYSE
                                                  HIGH            LOW
                                                  ----            ---
January 2007                                     $35.75          $32.26
February 2007                                    $37.53          $32.50
March 2007                                       $36.99          $32.06
April 2007                                       $39.54          $35.79
May 2007                                         $41.24          $36.91
June 1 - June 27, 2007                           $40.63          $37.48

C.     MARKETS

     See Item 9A above.

ITEM 10. ADDITIONAL INFORMATION

A. SHARE CAPITAL

     Not Applicable

B. MEMORANDUM AND ARTICLES OF ASSOCIATION

     The following description of our capital stock summarizes the material
terms of our Memorandum of Association and our bye-laws.

     Under our Memorandum of Association, as amended, our authorized capital
consists of 51,200,000 common shares having a par value of $0.01 per share.

     The purposes and powers of the Company are set forth in Items 6 and 7 of
our Memorandum of Association and in paragraphs (b) to (n) and (p) to (u) of the
Second Schedule of the Bermuda Companies Act of 1981 (the "Companies Act") which
is attached as an exhibit to our Memorandum of Association. These purposes
include the entering into of any guarantee, contract, indemnity or suretyship
and to assure, support, secure, with or without the consideration or benefit,
the performance of any obligations of any person or persons; and the borrowing
and raising of money in any currency or currencies to secure or discharge any
debt or obligation in any manner.

     Our bye-laws provide that our board of directors shall convene and the
Company shall hold annual general meetings in accordance with the requirements
of the Companies Act at such times and places as the Board shall decide. Our
board of directors may call special meetings at its discretion or as required by
the Companies Act. Under the Companies Act, holders of one-tenth of our issued
common shares may call special meetings of shareholders.

     Bermuda law permits the bye-laws of a Bermuda company to contain a
provision eliminating personal liability of a director or officer to the company
for any loss arising or liability attaching to him by virtue of any rule of law
in respect of any negligence default, breach of duty or breach of trust of which
the officer or person may be guilty. Bermuda law also grants companies the power
generally to indemnify directors and officers of the company if any such person
was or is a party or threatened to be made a party to a threatened, pending or
completed action, suit or proceeding by reason of the fact that he or she is or
was a director and officer of the company or was serving in a similar capacity
for another entity at the company's request.

     Our bye-laws do not prohibit a director from being a party to, or otherwise
having an interest in, any transaction or arrangement with the Company or in
which the Company is otherwise interested. Our bye-laws provide that a director
who has an interest in any transaction or arrangement with the Company and who
has complied with the provisions of the Companies Act and with our bye-laws with
regard to disclosure of such interest shall be taken into account in
ascertaining whether a quorum is present, and will be entitled to vote in
respect of any transaction or arrangement in which he is so interested. Our
bye-laws provide our board of directors the authority to exercise all of the
powers of the Company to borrow money and to mortgage or charge all or any part
of our property and assets as collateral security for any debt, liability or
obligation. Our directors are not required to retire because of their age, and
our directors are not required to be holders of our common shares. Directors
serve for one year terms, and shall serve until re-elected or until their
successors are appointed at the next annual general meeting.

     Our bye-laws provide that each director, alternate director, officer,
person or member of a committee, if any, resident representative, or his heirs,
executors or administrators, which we refer to collectively as an indemnitee,
will be indemnified and held harmless out of our funds to the fullest extent
permitted by Bermuda law against all liabilities, loss, damage or expense
(including liabilities under contract, tort and statute or any applicable
foreign law or regulation and all reasonable legal and other costs and expenses
properly payable) incurred or suffered by him as such director, alternate
director, officer, person or committee member or resident representative (or in
his reasonable belief that he is acting as any of the above). In addition, each
indemnitee shall be indemnified against all liabilities incurred in defending
any proceedings, whether civil or criminal, in which judgment is given in such
indemnitee's favor, or in which he is acquitted.

     There are no pre-emptive, redemption, conversion or sinking fund rights
attached to our common shares. The holders of common shares are entitled to one
vote per share on all matters submitted to a vote of holders of common shares.
Unless a different majority is required by law or by our bye-laws, resolutions
to be approved by holders of common shares require approval by a simple majority
of votes cast at a meeting at which a quorum is present.

     Special rights attaching to any class of our shares may be altered or
abrogated with the consent in writing of not less than 75% of the issued and
outstanding shares of that class or with the sanction of a resolution passed at
a separate general meeting of the holders of such shares voting in person or by
proxy.

     Our Memorandum of Association and our bye-laws may be amended upon the
consent of not less than two-thirds of the issued and outstanding common shares.

     In the event of our liquidation, dissolution or winding up, the holders of
common shares are entitled to share in our assets, if any, remaining after the
payment of all of our debts and liabilities, subject to any liquidation
preference on any outstanding preference shares.

     Our bye-laws provide that our board of directors may, from time to time,
declare and pay dividends out of contributed surplus. Each common share is
entitled to dividends if and when dividends are declared by our board of
directors, subject to any preferred dividend right of the holders of any
preference shares.

     There are no limitations on the right of non-Bermudians or non-residents of
Bermuda to hold or vote our common shares.

     Our bye-laws permit the Company to refuse to register the transfer of any
common shares if the effect of that transfer would result in 50% or more of our
aggregated issued share capital, or 50% or more of the outstanding voting power
being held by persons who are resident for tax purposes in Norway or the United
Kingdom.

     Our bye-laws permit the Company to increase its capital, from time to time,
with the consent of not less than two-thirds of the outstanding voting power of
the Company's issued and outstanding common shares.

C. MATERIAL CONTRACTS

     For a description of our New Credit Facility, see Item 4 -- Information on
the Company -- Business Overview -- Our Credit Facility.

     Otherwise, the Company has not entered into any material contracts outside
the ordinary course of business during the past two years.

D. EXCHANGE CONTROLS

     The Company has been designated as a non-resident of Bermuda for exchange
control purposes by the Bermuda Monetary Authority, whose permission for the
issue of the Common Shares was obtained prior to the offering thereof.

     The transfer of shares between persons regarded as resident outside Bermuda
for exchange control purposes and the issuance of Common Shares to or by such
persons may be effected without specific consent under the Bermuda Exchange
Control Act of 1972 and regulations thereunder. Issues and transfers of Common
Shares involving any person regarded as resident in Bermuda for exchange control
purposes require specific prior approval under the Bermuda Exchange Control Act
1972.

     Subject to the foregoing, there are no limitations on the rights of owners
of the Common Shares to hold or vote their shares. Because the Company has been
designated as non-resident for Bermuda exchange control purposes, there are no
restrictions on its ability to transfer funds in and out of Bermuda or to pay
dividends to United States residents who are holders of the Common Shares, other
than in respect of local Bermuda currency.

     In accordance with Bermuda law, share certificates may be issued only in
the names of corporations or individuals. In the case of an applicant acting in
a special capacity (for example, as an executor or trustee), certificates may,
at the request of the applicant, record the capacity in which the applicant is
acting. Notwithstanding the recording of any such special capacity, the Company
is not bound to investigate or incur any responsibility in respect of the proper
administration of any such estate or trust.

     The Company will take no notice of any trust applicable to any of its
shares or other securities whether or not it had notice of such trust.

     As an "exempted company", the Company is exempt from Bermuda laws which
restrict the percentage of share capital that may be held by non-Bermudians, but
as an exempted company, the Company may not participate in certain business
transactions including: (i) the acquisition or holding of land in Bermuda
(except that required for its business and held by way of lease or tenancy for
terms of not more than 21 years) without the express authorization of the
Bermuda legislature; (ii) the taking of mortgages on land in Bermuda to secure
an amount in excess of $50,000 without the consent of the Minister of Finance of
Bermuda; (iii) the acquisition of securities created or issued by, or any
interest in, any local company or business, other than certain types of Bermuda
government securities or securities of another "exempted company, exempted
partnership or other corporation or partnership resident in Bermuda but
incorporated abroad; or (iv) the carrying on of business of any kind in Bermuda,
except in so far as may be necessary for the carrying on of its business outside
Bermuda or under a license granted by the Minister of Finance of Bermuda.

     There is a statutory remedy under Section 111 of the Companies Act 1981
which provides that a shareholder may seek redress in the Bermuda courts as long
as such shareholder can establish that the Company's affairs are being
conducted, or have been conducted, in a manner oppressive or prejudicial to the
interests of some part of the shareholders, including such shareholder. However,
this remedy has not yet been interpreted by the Bermuda courts.

     The Bermuda government actively encourages foreign investment in "exempted"
entities like the Company that are based in Bermuda but do not operate in
competition with local business. In addition to having no restrictions on the
degree of foreign ownership, the Company is subject neither to taxes on its
income or dividends nor to any exchange controls in Bermuda. In addition, there
is no capital gains tax in Bermuda, and profits can be accumulated by the
Company, as required, without limitation. There is no income tax treaty between
the United States and Bermuda pertaining to the taxation of income other than
applicable to insurance enterprises.

E. TAXATION

     The Company is incorporated in Bermuda. Under current Bermuda law, the
Company is not subject to tax on income or capital gains, and no Bermuda
withholding tax will be imposed upon payments of dividends by the Company to its
shareholders. No Bermuda tax is imposed on holders with respect to the sale or
exchange of Shares. Furthermore, the Company has received from the Minister of
Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966, as
amended, an assurance that, in the event that Bermuda enacts any legislation
imposing any tax computed on profits or income, including any dividend or
capital gains withholding tax, or computed on any capital asset, appreciation,
or any tax in the nature of an estate, duty or inheritance tax, then the
imposition of any such tax shall not be applicable. The assurance further
provides that such taxes, and any tax in the nature of estate duty or
inheritance tax, shall not be applicable to the Company or any of its
operations, nor to the shares, debentures or other obligations of the Company,
until March 2016.

F. DIVIDENDS AND PAYING AGENTS

     Not Applicable

G. STATEMENT BY EXPERTS

     Not Applicable

H. DOCUMENTS ON DISPLAY

     The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. In accordance with these requirements we file
reports and other information with the Securities and Exchange Commission. These
materials, including this annual report and the accompanying exhibits may be
inspected and copied at the public reference facilities maintained by the
Commission at 100 F Street, NE, Room 1580, Washington, D.C. 20549. You may
obtain information on the operation of the public reference room by calling 1
(800) SEC-0330, and you may obtain copies at prescribed rates from the Public
Reference Section of the Commission at its principal office in Washington, D.C.
The SEC maintains a website (http://www.sec.gov.) that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the SEC. In addition, documents referred to in this annual
report may be inspected at the Company's headquarters at LOM Building, 27 Reid
Street, Hamilton, HM11, Bermuda.

     We furnish holders of our common shares with annual reports containing
audited financial statements and a report by our independent public accountants,
and intend to make available quarterly reports containing selected unaudited
financial data for the first three quarters of each fiscal year. The audited
financial statements will be prepared in accordance with United States generally
accepted accounting principles. As a "foreign private issuer," we are exempt
from the rules under the Securities Exchange Act prescribing the furnishing and
content of proxy statements to shareholders. While we intend to furnish proxy
statements to shareholders in accordance with the rules of the New York Stock
Exchange, those proxy statements do not conform to Schedule 14A of the proxy
rules promulgated under the Exchange Act. All reports, proxy statements and
other information filed by us with the New York Stock Exchange may be inspected
at the New York Stock Exchange's offices at 20 Broad Street, New York, New York
10005. In addition, as a "foreign private issuer," we are exempt from the rules
under the Exchange Act relating to short swing profit reporting and liability.

I. SUBSIDIARY INFORMATION

     Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to market risk from changes in interest rates
related to the variable rate of the Company's borrowings, or the Loan under our
2005 Credit Facility.

     Amounts borrowed under the 2005 Credit Facility bears interest at a rate
equal to LIBOR plus a margin between 0.70% to 1.20% per year (depending on the
loan to vessel value ratio). Increasing interest rates could affect our future
profitability. In certain situations, the Company may enter into financial
instruments to reduce the risk associated with fluctuations in interest rates.

     A 100 basis point increase in LIBOR would have resulted in an increase of
approximately $0.9 million in our interest expense for the year ended December
31, 2006.

     The Company is exposed to the spot market. Historically, the tanker markets
have been volatile as a result of the many conditions and factors that can
affect the price, supply and demand for tanker capacity. Changes in demand for
transportation of oil over longer distances and supply of tankers to carry that
oil may materially affect our revenues, profitability and cash flows. Eleven of
our twelve vessels are currently operated in the spot market or on spot market
related time charters. We believe that over time, spot employment generates
premium earnings compared to longer-term employment.

     We estimate that during 2006, a $1,000 per day decrease in the spot market
rate would have decreased our voyage revenue by approximately $2.9 million.


ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not Applicable

                                     PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Not Applicable

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
         PROCEEDS

     On February 13, 2007, the Board of Directors adopted a shareholders' rights
agreement and declared a dividend of one preferred share purchase right to
purchase one one-thousandth of a share of the Company's Series A Participating
Preferred Stock for each outstanding share of the Company's common stock, par
value $0.01 per share. The dividend was payable on February 27, 2007 to
stockholders of record on that date. Each right entitles the registered holder
to purchase from the Company one one-thousandth of a share of Series A
Participating Preferred Stock at an exercise price of $115, subject to
adjustment. The Company can redeem the rights at any time prior to a public
announcement that a person has acquired ownership of 15% or more of the
company's common stock.

     This shareholder rights plan was designed to enable the Company to protect
shareholder interests in the event that an unsolicited attempt is made for a
business combination with or takeover of the Company. The Company believes that
the shareholder rights plan should enhance the Board's negotiating power on
behalf of shareholders in the event of a coercive offer or proposal. The Company
is not currently aware of any such offers or proposals.


ITEM 15. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.

     Pursuant to Rules 13a-15(e) of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Company's management, under the supervision and with the
participation of the Chief Executive Officer and Interim Chief Financial
Officer, evaluated the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of December 31, 2006. The term
disclosure controls and procedures means controls and other procedures of an
issuer that are designed to ensure that information required to be disclosed by
the issuer in the reports that it files or submits under the Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.

     Based on that evaluation, our Chief Executive Officer and Interim Chief
Financial Officer have concluded that our disclosure controls and procedures are
effective, as of the end of the period covered by this report, in timely
alerting them to material information required to be disclosed in our periodic
filings with the Securities and Exchange Commission ("SEC"), and in ensuring
that the information required to be disclosed in those filings is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms.

(b) Management's annual report on internal control over financial reporting.

     Our management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rule 13a-15(f) or
15d-15(f) under the Exchange Act. Our internal control system was designed to
provide reasonable assurance to our management and board of directors regarding
the reliability of financial reporting and the preparation of published
financial statements for external purposes in accordance with Generally Accepted
Accounting Principles. All internal control systems, no matter how well
designed, have inherent limitations. Therefore, even those systems determined to
be effective may not prevent or detect misstatements and can provide only
reasonable assurance with respect to financial statement preparation and
presentation.

     Our management assessed the effectiveness of our internal control over
financial reporting as of December 31, 2006. In making this assessment,
management used the criteria for effective internal control over financial
reporting set forth by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") in Internal Control-Integrated Framework. Based on this
assessment, management has concluded that, as of December 31, 2006, our internal
control over financial reporting was effective based on those criteria.

(c) Attestation report of the registered public accounting firm.

     Management's assessment of the effectiveness of the Company's internal
control over financial reporting as of December 31, 2006 has been audited by
Deloitte AS, an independent registered public accounting firm, as stated in
their report included in this annual report.

(d) Changes in internal control over financial reporting.

     There have been no changes in internal controls over financial reporting
(identified in connection with management's evaluation of such internal controls
over financial reporting) that occurred during the year covered by this annual
report that have materially affected, or are reasonably likely to materially
affect, the Company's internal controls over financial reporting.

ITEM 16. RESERVED.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

     The Board of Directors has determined that Mr. Torbj0rn Glads0 is an audit
committee financial expert and the Chairman of the committee. Mr. Glads0 is
"independent" as determined in accordance with the rules of the New York Stock
Exchange.

ITEM 16B. CODE OF ETHICS.

     The Company has adopted a code of ethics that applies to all of the
Company's employees, including our principal executive officer, principal
financial officer, principal accounting officer or controller. The Code may be
downloaded at our website (www.nat.bm). Additionally, any person, upon request,
may ask for a hard copy of electronic file of the Code. If we make any
substantive amendment to the Code of Ethics or grant any waivers, including any
implicit waiver, from a provision of our Code of Ethics, we will disclose the
nature of that amendment or waiver on our website. During the year ended
December 31, 2006, no such amendment was made or waiver granted.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a)  Audit Fees

     The Company's Board of Directors has established preapproval and procedures
for the engagement of the Company's independent public accounting firms for all
audit and non-audit services. The following table sets forth, for the two most
recent fiscal years, the aggregate fees billed for professional services
rendered by our principal accountant, Deloitte AS, for the audit of the
Company's annual financial statements and services provided by the principal
accountant in connection with statutory and regulatory filings or engagements
for the two most recent fiscal years.

FISCAL YEAR ENDED DECEMBER 31, 2006                    $199,600
FISCAL YEAR ENDED DECEMBER 31, 2005                     $71,400

(1)  Included in the amounts are costs associated with the implementation of the
     requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for the
     fiscal years 2006 and 2005 of $36,000 and $0, respectively.

(b)  Audit-Related Fees (1)

FISCAL YEAR ENDED DECEMBER 31, 2006                    $132,300
FISCAL YEAR ENDED DECEMBER 31, 2005                    $150,455

(1)  Audit-Related-Fees consists of accounting consultations related to
     accounting, financial reporting or disclosure matters not classified as
     "Audit Services".

(c)  Tax Fees

     Not applicable

(d)  All Other Fees

     Not applicable.

(e)  Audit Committee's Pre-Approval Policies and Procedures

     Our audit committee pre-approves all audit, audit-related and non-audit
services not prohibited by law to be performed by our independent auditors and
associated fees prior to the engagement of the independent auditor with respect
to such services.

(f)  Not applicable.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

     Not Applicable

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS.

     Not Applicable

                                    PART III

ITEM 17. FINANCIAL STATEMENTS

     See item 18.

ITEM 18. FINANCIAL STATEMENTS

     See pages F-1 through F-11


<PAGE>




NORDIC AMERICAN TANKER SHIPPING LIMITED


TABLE OF CONTENTS

                                                                      Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS                   F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
ON INTERNAL CONTROL OVER FINANCIAL REPORTING                          F-3


FINANCIAL STATEMENTS

Statements of Operations                                              F-4

Balance Sheets                                                        F-5

Statements of Cash Flows                                              F-6

Statements of Shareholders' Equity                                    F-7

Notes to Financial Statements                                         F-8

<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of Nordic American Tanker Shipping
Limited


We have audited the accompanying balance sheets of Nordic American Tanker
Shipping Ltd. (the "Company") as of December 31, 2006 and 2005, and the related
statements of operations, shareholders' equity and cash flows for each of the
three years ended December 31, 2006. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2006 and
2005, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2006, in conformity with accounting
principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of the Company's
internal control over financial reporting as of December 31, 2006, based on the
criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our report
dated May 18, 2007 expressed an unqualified opinion on management's assessment
of the effectiveness of the Company's internal control over financial reporting
and an unqualified opinion on the effectiveness of the Company's internal
control over financial reporting.


/s/ Deloitte AS


Oslo, Norway
May 18, 2007
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Nordic American Tanker Shipping
Ltd


We have audited management's assessment, included in the accompanying
Management's report on internal control over financial reporting, that Nordic
American Tanker Shipping Ltd (the "Company") maintained effective internal
control over financial reporting as of December 31, 2006, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. The Company's management is
responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial
reporting. Our responsibility is to express an opinion on management's
assessment and an opinion on the effectiveness of the Company's internal control
over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, evaluating management's assessment, testing and evaluating
the design and operating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by,
or under the supervision of, the company's principal executive and principal
financial officers, or persons performing similar functions, and effected by the
company's board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial
reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of
the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

In our opinion, management's assessment that the Company maintained effective
internal control over financial reporting as of December 31, 2006, is fairly
stated, in all material respects, based on the criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission. Also in our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of
December 31, 2006, based on the criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the financial statements as of and
for the year ended December 31, 2006 of the Company and our report dated May 18,
2007 expressed an unqualified opinion on those financial statements.

\s\ Deloitte AS

Oslo, Norway
May 18, 2007
<PAGE>


<TABLE>

STATEMENTS OF OPERATIONS

All figures in USD '000, except share data
<CAPTION>
                                                                                   Year Ended December 31,

                                                               Notes             2006               2005             2004
                                                               -----             ----               ----             ----
<S>                                                              <C>             <C>              <C>               <C>
Voyage Revenues                                                  3               175,520          117,110           67,452
Voyage Expenses                                                                 (40,172)         (30,981)          (4,925)
Vessel Operating Expenses -
excluding depreciation expense presented below
                                                                                (21,102)         (11,221)          (1,977)
General and Administrative Expenses                           2, 5, 7           (12,750)          (8,492)         (10,852)
Depreciation Expense                                             6              (29,254)         (17,529)          (6,918)

Net Operating Income                                                              72,242           48,887           42,780

Interest Income                                                                    1,602              850              143
Interest Expense                                                 9               (6,339)          (3,454)          (1,971)
Other Financial (Expense) Income                                                   (112)               34            (136)

Total Other Expense                                                              (4,849)          (2,570)          (1,964)

Net Income before Tax                                                             67,393           46,317           40,816

Tax Expense                                                                            0                0                0

Net Income for the Year                                                           67,393           46,317           40,816

Basic Earnings per Share                                                            3.14             3.03             4.05

Diluted Earnings per Share                                                          3.14             3.03             4.05

Basic Weighted Average Number of Common Shares Outstanding                    21,476,196       15,263,622       10,078,391
Diluted Weighted Average Number of Common Shares Outstanding
                                                                              21,476,196       15,263,622       10,078,391


The footnotes are an integral part of these financial statements.
</TABLE>


<PAGE>


<TABLE>

BALANCE SHEETS

All figures in USD '000, except share data
<CAPTION>
                                                                            Notes      December 31, 2006         December 31, 2005
                                                                            -----      -----------------         -----------------
<S>                                                                        <C>              <C>                       <C>
ASSETS
Current Assets
Cash and Cash Equivalents                                                                    11,729                    14,240
Accounts Receivable, net $0 allowance at December 31, 2006 and 2005
                                                                           3                 13,417                    19,557
Voyages in Progress                                                                           7,853                     2,446
Prepaid Expenses and Other Assets                                          4                 11,479                     3,147

Total Current Assets                                                                         44,478                    39,390

Long-term Assets
Vessels, Net                                                               6                752,478                   463,933
Other Long-term Assets                                                                        3,224                     2,521

Total Long-term Assets                                                                      755,702                   466,454

Total Assets                                                                                800,180                   505,844

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable                                                                              3,006                     1,562
Deferred Revenue                                                           10                   537                       537
Accrued Liabilities                                                        11                11,191                     2,873

Total Current Liabilities                                                                    14,734                     4,972

Long-term Liabilities
Long-term Debt                                                             8                173,500                   130,000

Total Long-term Liabilities                                                                 173,500                   130,000

Total Liabilities                                                                           188,234                   134,972

Commitments and Contingencies                                              13                     -                         -

SHAREHOLDERS' EQUITY
Common Stock,                                                              12                   269                       166
$0.01 par value; 51,200,000 shares authorized,
26,914,088 shares issued and outstanding and 16,644,496 shares issued and
outstanding at December 31, 2006 and December 31, 2005, respectively

Additional Paid-in Capital                                                                  728,851                   432,682
Accumulated Deficit                                                                       (117,174)                  (61,976)

Total Shareholders' Equity                                                                  611,946                   370,872

Total Liabilities & Shareholders' Equity                                                    800,180                   505,844


The footnotes are an integral part of these financial statements.

</TABLE>


<PAGE>

<TABLE>

STATEMENTS OF SHAREHOLDERS' EQUITY
All figures in USD '000, except number of shares
<CAPTION>

                                                                                    Accumulated
                                                          Additional                  Other           Total            Total
                                Number of       Common     Paid-in    Accumulated  Comprehensive   Shareholders'    Comprehensive
                                 Shares         Shares     Capital      Deficit        Loss           Equity           Income
                                 ------         ------     -------      -------        ----           ------           ------
<S>                             <C>             <C>       <C>         <C>           <C>            <C>                 <C>
Balance at 12.31.03              9,706,606        97      144,396      (37,635)     (1,150)          105,708


Net Income                                                               40,816                       40,816            40,816

Common Shares Issued, net of
$0 issuance costs                3,361,232        34      112,105                                    112,139

Compensation - Restricted
Shares                                                      9,252                                      9,252

Unrealized Loss on Derivative                                                          (21)             (21)              (21)
Instruments

Adjustment for Losses on
Derivatives Reclassified to
Earnings                                                                              1,171            1,171             1,171

Dividend Paid, $4.84 per share                                         (47,196)                     (47,196)

Total Comprehensive Income                                                                                              41,966

Balance at 12.31.04             13,067,838       131      265,753      (44,015)           0          221,868


Net Income                                                               46,318                       46,318            46,318

Common Shares Issued, net of
$11.3 million issuance costs     3,576,658        35      161,932                                    161,967

Compensation - Restricted                                   3,583                                      3,583
Shares

Stock Options                                               1,415                                      1,415

Dividend Paid, $4.21 per share                                         (64,279)                     (64,279)

Total Comprehensive Income                                                                                              46,318

Balance at 12.31.05             16,644,496       166      432,682      (61,977)           0          370,872


Net Income                                                               67,393                       67,393            67,393

Common Shares Issued, net of
$16.5 million issuance costs    10,269,592       103      288,254                                    288,357

Compensation - Restricted                                   6,369                                      6,369
Shares

Stock Options                                               1,545                                      1,545

Dividend Paid, $5.85 per share                                        (122,590)                    (122,590)

Total Comprehensive Income                                                                                              67,393
Balance at 12.31.06             26,914,088       269      728,851     (117,174)           0          611,946



The footnotes are an integral part of these financial statements.

</TABLE>


<PAGE>


<TABLE>

STATEMENTS OF CASH FLOWS

All figures in USD '000
<CAPTION>

                                                                     Year Ended December 31,


                                                              2006                   2005                    2004
                                                              ----                   ----                    ----
<S>                                                         <C>                    <C>                     <C>
Cash Flows from Operating Activities

Net Income                                                  67,393                 46,317                  40,816

Reconciliation of Net Income to Net Cash
from Operating Activities
Depreciation Expense                                        29,254                 17,529                   6,918
Amortization of Prepaid Finance Costs                          402                    718                     113
Compensation - Restricted Shares & Stock Options             7,914                  4,998                   9,252

Changes in Operating Assets and Liabilities:
Accounts Receivables                                         6,140               (15,019)                   3,603
Accounts Payable and Accrued Liabilities                     9,763                  2,545                   1,011
Prepaid and Other Assets                                   (8,332)                (1,667)                   (182)
Deferred Revenue                                                 0                  (749)                   1,286
Voyages in Progress                                        (5,407)                (2,446)                       0
Other Long-term Assets                                       (514)                (1,171)                       0

Net Cash Provided by Operating Activities                  106,613                 51,056                  62,817

Cash Flows from Investing Activities
Investment in Vessels                                    (317,800)              (294,161)                (66,137)

Net Cash Used in Investing Activities                    (317,800)              (294,161)                (66,137)


Cash Flows from Financing Activities
Proceeds from Issuance of Common Stock                     288,357                161,967                 112,138
Proceeds from Use of Credit Facility                       274,500                135,000                  96,000
Repayments on Credit Facility                            (231,000)                (5,000)               (126,000)
Credit Facility Costs                                        (591)                (1,075)                 (1,456)
Dividends Paid                                           (122,590)               (64,279)                (47,196)


Net Cash Provided by Financing Activities                  208,676                226,613                  33,486

Net (Decrease) Increase in Cash and Cash Equivalents      (2, 511)               (16,492)                  30,166

Beginning Cash and Cash Equivalents                         14,240                 30,732                     566

Ending Cash and Cash Equivalents                            11,729                 14,240                  30,732

Cash Paid for Interest                                       5,499                    916                   1,774



The footnotes are an integral part of these financial statements.
</TABLE>


<PAGE>



                     NORDIC AMERICAN TANKER SHIPPING LIMITED

                          NOTES TO FINANCIAL STATEMENTS

                  (All amounts in USD '000 except where noted)

1.   BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business: Nordic American Tanker Shipping Limited (the "Company") was
formed on June 12, 1995 under the laws of the Islands of Bermuda. The Company
owns and operates crude oil tankers. The Company trades under the symbol "NAT"
on the New York Stock Exchange.

Basis of Accounting: These financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
("US GAAP").

Use of Estimates: Preparation of financial statements in accordance with US GAAP
necessarily includes amounts based on estimates and assumptions made by
management. Actual results could differ from those amounts. The affects of
changes in accounting estimates are accounted for in the same period in which
the estimates are changed.

Reclassifications: Certain amounts in the prior year financial statements have
been reclassified to conform to the current year presentation.

Cash and Cash Equivalents: Cash and cash equivalents consist of deposits with
original maturities of three months or less.

Inventories: Inventories, which comprise principally of bunker fuel, are stated
at cost which is determined on a first-in, first-out (FIFO) basis.

Vessel and Other Property: Vessel and other property are recorded at cost.
Depreciation is calculated based on cost less estimated salvage value and is
provided over estimated useful lives of the related assets using the
straight-line method. The estimated useful life of the vessels is 25 years from
the date the vessel is delivered from the shipyard. Repairs and maintenance are
expensed as incurred.

Impairment of Long-Lived Assets: Long-lived assets are required to be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If the estimated
undiscounted future cash flows expected to result from the use of the asset and
its eventual disposition is less than the carrying amount of the asset, the
asset is deemed impaired. The amount of the impairment is measured as the
difference between the carrying value and the fair value of the asset. There
have been no impairments recorded for the years ended December 31, 2006, 2005 or
2004.

Drydocking: The Company's vessels are required to be drydocked approximately
every 30 to 60 months for major repairs and maintenance that cannot be performed
while the vessels are in operation. The Company follows the deferral method of
accounting for drydocking costs whereby actual costs incurred are deferred and
are amortized on a straight-line basis through the expected date of the next
drydocking. Ballast tank improvements are capitalized and amortized on a
straight-line basis over a period of 8 years. Unamortized drydocking costs of
vessels that are sold are written off to income in the year of the vessel's
sale. The capitalized and unamortized drydocking costs are included in the book
value of the vessels. Amortization expense of the drydocking costs is included
in depreciation expense.

Fair Value of Financial Instruments: The fair values of cash and cash
equivalents, accounts receivable, and accounts payable approximate carrying
value because of the short-term nature of these instruments.

Deferred Financing costs: Finance costs, including fees, commissions and legal
expenses, which are presented as other assets are capitalized and amortized on a
straight-line basis over the term of the relevant debt borrowings. Amortization
of finance costs is included in interest expense.

Revenue and expense recognition: Revenue and expense recognition policies for
voyage and time charter agreements are as follows:

Bareboat: Revenues from bareboat charters are recorded at a fixed charterhire
rate per day over the term of the charter. The charterhire is payable monthly in
advance. During the charter period the charterer is responsible for operating
and maintaining the vessel and bears all costs and expenses with respect to the
vessel.

Time charters under spot related terms: Revenues from time charters under spot
related terms is based on a formula designed to generate earnings as if the
Company had operated the vessels in the spot market on two routes, less 5% in
commission to the charterer. The charterhire is payable to the Company monthly.
The charterer is responsible for all voyage related costs while the Company is
responsible for providing the crew and paying other operating costs.

Spot charters: Voyage revenues and voyage expenses are recognized on a pro rata
basis based on the relative transit time in each period. Estimated losses on
voyages are provided for in full at the time such losses become evident. A
voyage is deemed to commence upon the completion of discharge of the vessel's
previous cargo and is deemed to end upon the completion of discharge of the
current cargo. Voyage expenses primarily include only those specific costs which
are borne by the Company in connection with voyage charters which would
otherwise have been borne by the charterer under time charter agreements. These
expenses principally consist of fuel, canal and port charges. Demurrage income
represents payments by the charterer to the vessel owner when loading and
discharging time exceed the stipulated time in the voyage charter. Demurrage
income is measured in accordance with the provisions of the respective charter
agreements and the circumstances under which demurrage claims arise and is
recognized on a pro rata basis over the length of the voyage to which it
pertains. At December 31, 2006 and 2005, the Company had no reserves against its
due from charterers balance associated with demurrage revenues.

Pooling arrangements: Revenues and voyage expenses of the vessels operating in
pool arrangements are pooled and the resulting net pool revenues, calculated on
a time charter equivalent basis, are allocated to the pool participants
according to an agreed formula. Formulas used to allocate net pool revenues vary
among different pools, but generally, revenues are allocated to pool
participants on the basis of the number of days a vessel operates in the pool
with weighting adjustments made to reflect each vessels' differing capacities
and performance capabilities. The pool managers are responsible for collecting
voyage revenue, paying voyage expenses and distribute net pool revenues to the
participants.

Based on the guidance from Emerging Issuance Task Force ("EITF") No. 99-19,
"Reporting Revenue Gross as a Principal versus Net as an Agent" ("EITF 99-19"),
earnings generated from pools in which the Company is the principal of its
vessels activities are recorded based on gross method. Earnings generated from
pools in which the Company is not regarded as the principal of the vessels
activities are recorded per the net method.

The Company accounts for the net pool revenues allocated by these pools as
"Voyage Revenue" in its statements of operations.

Vessel Operating Expenses: Vessel operating expenses include crewing, repair and
maintenance, insurance, stores, lube oils and communication expenses. These
expenses are recognized when incurred.

Segment Information: The Company has identified only one operating segment under
Statement of Financial Accounting Standards ("SFAS") No. 131 "Segments of an
Enterprise and Related Information." The Company has only one type of vessel -
Suezmax crude oil tankers - operating on time charter contracts at market
related rates, in the spot market and on long-term bareboat contract.

Geographical Segment: The Company currently operates nine of its vessels in spot
market pools with other vessels that are not owned by us. The pools are managed
by third party pool administrators. The earnings of all of the vessels are
aggregated, or pooled, and divided according to the relative performance
capabilities of the vessel and the actual earning days each vessel is available.
The pool vessels are operated in the spot market by the pool administrators. As
a significant portion of the Company's vessels are operated in pools, it is not
practical to allocate geographical data to each vessel nor would it give
meaningful information to the reader.

Derivative instruments: The Company did not hold any derivative instruments at
December 31, 2006 or 2005.

Share-Based Compensation: Effective December 31, 2005, the Company adopted SFAS
No. 123(R) "Share-Based Payment" ("SFAS 123R"), using the modified prospective
application transition method. Because the fair value recognition provisions of
SFAS No. 123, "Stock-Based Compensation, and SFAS No. 123(R) were materially
consistent under the Company's equity plan, the adoption of SFAS No. 123(R) did
not have a significant impact on the Company's financial position or results of
operations. See to Note 7 for additional information.

Earnings per Share: SFAS No. 128 "Earnings Per Share " requires earnings per
share ("EPS") to be computed and reported as both basic EPS and diluted EPS.
Basic EPS is computed by dividing net income by the weighted average number of
common shares outstanding for the period. Diluted EPS is computed by dividing
net income by the weighted average number of common shares and dilutive common
stock equivalents (i.e. stock options, warrants) outstanding during the period.

The Company's average stock price during 2006 was above the average exercise
price of the option and a dilutive effect on EPS could potentially arise.
However, the proceeds of an exercise of all outstanding options calculated as
per the Treasury Stock Method would exceed the costs of acquiring stocks at the
average 2006 stock price. The potential effect of the outstanding options is
therefore anti-dilutive and is not included in the calculation of diluted
earnings per share. The average number of potentially dilutive options was
320,000 for the year ended December 31, 2006, and 295,000 for the year ended
December 31, 2005, respectively. There were no outstanding options as of
December 31, 2004.

Concentration of Credit Risk: Financial instruments that potentially subject the
Company to concentrations of credit risk consist principally of cash and cash
equivalents and accounts receivable. The Company maintains its cash with
reputable financial institutions. The terms of these deposits are on demand to
minimize risk. The Company has not experienced any losses related to these cash
deposits and believes it is not exposed to any significant credit risk.

Accounts receivable consist of uncollateralized receivables from international
customers engaged in the international shipping industry. The Company routinely
assesses the financial strength of its customers. Accounts receivable are
presented net of allowances for doubtful accounts relating to demurrage claims.
If amounts become uncollectible, they will be charged to operations when that
determination is made.

Interest Rate Risk: The Company is exposed to interest rate risk for its debt
borrowed under the New Credit Facility. In certain situations, the Company may
enter into financial instruments to reduce the risk associated with fluctuations
in interest rates. The Company has no outstanding derivatives at December 31,
2006 and has not entered into any such arrangements in 2006.

Foreign Currency Risk: The Company's functional currency is the U.S. dollar as
all revenues are received in U.S. dollars and the majority of the Company's
expenditures are made in U.S. dollars. The Company's reporting currency is U.S.
dollars. The Company considers currency risk to be insignificant.

Income taxes: The Company is incorporated in Bermuda. Under current Bermuda law,
the Company is not subject to corporate income taxes.

Recent Accounting Pronouncements: In July 2006, the FASB issued FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"),
which clarifies the criteria that must be met prior to recognition of the
financial statement benefit of a position taken in a tax return. FIN 48 provides
a benefit recognition model with a two-step approach consisting of a
"more-likely-than-not" recognition criteria, and a measurement attribute that
measures the position as the largest amount of tax benefit that is greater than
50% likely of being realized upon ultimate settlement. FIN 48 also requires the
recognition of liabilities created by differences between tax positions taken in
a tax return and amounts recognized in the financial statements. FIN 48 is
effective as of the beginning of the first annual period beginning after
December 15, 2006. The Company is currently assessing the impact of adopting FIN
48 on the financial condition, results of operations, and cash flows of the
Company

In September 2006, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin("SAB") No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements" ("SAB 108"), which provides interpretive guidance on the
consideration of the effects of prior year misstatements in quantifying current
year misstatements for the purpose of a materiality assessment. SAB 108 is
effective for the Company as of December 31, 2006. There was no impact as a
result of the Company's adoption of SAB 108 on its consolidated financial
statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurement,"
("SFAS 157") which defines fair value, establishes a framework for measuring
fair value and expands disclosures about assets and liabilities measured at fair
value. This Statement does not require any new fair value measurements. SFAS 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007. The Company is currently assessing the impact of SFAS 157,
and has not yet determined the impact that its adoption will have on its results
of operations and financial position.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 permits
entities to choose to measure many financial instruments and certain other items
at fair value that are not currently required to be measured at fair value. SFAS
159 also establishes presentation and disclosure requirements designed to
facilitate comparisons between entities that choose different measurement
attributes for similar types of assets and liabilities. SFAS 159 is effective
for fiscal years beginning after November 15, 2007. The Company is currently
assessing the impact of SFAS 157, and has not yet determined the impact that its
adoption will have on its results of operations and financial position.

2.   RELATED PARTY TRANSACTIONS

The Manager, Scandic American Shipping Ltd., is jointly owned by the Chairman
and Chief Executive Officer ("CEO") of the Company, Mr. Herbjorn Hansson, and a
member of the Board of Directors, Mr. Andreas Ove Ugland. The Manager, under the
Management Agreement, assumes commercial and operational responsibility of the
Company's vessels and is required to manage the Company's day-to-day business
subject to our objectives and policies as established from time to time by the
Board of Directors. For its services under the Management Agreement, the Manager
is entitled to reimbursement of costs directly related to the Company plus a
management fee equal to $100,000 per annum. The Manager also has a right to 2%
of the Company's total outstanding shares (see Note 7 "Share-Based
Compensation"). The Company recognized $1.6 million, $1.5 million and $0.3
million of total costs for services provided under the Management Agreement for
the years ended December 31, 2006, 2005 and 2004, respectively. Additionally the
Company recognized $6.3 million, $3.6 million, and $9.2 million in non-cash
share-based compensation expense for the years ended December 31, 2006, 2005 and
2004, respectively, related to the issuance of shares to the Manager (see Note 7
"Share-Based Compensation"). The costs are included in general and
administrative expenses. The balances included within accounts payable were
$491,081 and $396,314 at December 31, 2006 and 2005, respectively.

Mr. Jan Erik Langangen, Executive Vice President of the Manager, is a partner of
Langangen & Helset Advokatfirma AS, which in the past has provided and may
continue to provide legal services to us. The Company recognized $97,071,
$77,526 and $33,435 in costs for the years ended December 31, 2006, 2005 and
2004, respectively, for the services provided by Langangen & Helset Advokatfirma
AS. These costs are included in general and administrative expenses. There were
no amounts included within accounts payable at December 31, 2006 and December
31, 2005, respectively. .

3.   REVENUE

For the twelve months ending December 31, 2006, the Company's only source of
revenue was from the Company's twelve vessels. The table below provides the
current employment of the vessels.

                                                      Charterer*/
Vessel name                Employment                 Commercial Operator
-----------                ----------                 -------------------

Gulf Scandic               Bareboat                   Gulf Navigation*
Nordic Hawk                Spot / TC(1)               BP Shipping*
Nordic Hunter              Spot / TC(1)               BP Shipping*
Nordic Freedom             Spot                       Teekay Shipping
Nordic Fighter             Spot                       Frontline
Nordic Discovery           Spot                       Frontline
Nordic Apollo              Spot                       Frontline
Nordic Saturn              Spot                       Gemini Tankers
Nordic Jupiter             Spot                       Gemini Tankers
Nordic Voyager             Spot                       Stena Bulk
Nordic Cosmos              Spot                       Stena Bulk
Nordic Moon                Spot                       Stena Bulk

       (1) Spot/TC = Time Charter on spot market related terms.


One customer accounted for 23%, 37%, and 97% of the Company's revenues during
the year ended December 31, 2006, 2005 and 2004, respectively.

Five customers accounted for 23%, 22 %, 21%, 18%, 16% and 27%, 24%, 21%, 15%,
14% of the accounts receivable balance for the year ended December 31, 2006 and
December 31, 2005, respectively.

4.   PREPAID EXPENSES AND OTHER CURRENT ASSETS

     All figures in USD '000                          2006              2005
     -----------------------                          ----              ----

     Bunkers and lubricants inventory                5,110             2,136
     Other current assets - Managers                 3,247                56
     Prepaid expenses - Managers                     1,716               345
     Other                                           1,406               610

     Total as per December 31,                      11,479             3,147

The line items "Other current assets - Managers" and "Prepaid expenses -
Managers" relate to assets held and prepaid expenses incurred by our technical
and commercial managers at our risk.

5.   GENERAL AND ADMINISTRATIVE EXPENSES

     All figures in USD '000                         2006      2005      2004
     -----------------------                         ----      ----      ----

     Management fee                                   100       100       175
     Directors and officers insurance                 116       121       113
     Salary and wages                               1,022       635       165
     Audit, legal and consultants                   1,171       679       588
     Outsourced administrative services             1,564     1,461       313
     Compensation - restricted shares (non-cash)    6,369     3,583     9,252
     2004 Stock Incentive Plan                      1,545     1,415         0
     Other fees and expenses                          864       498       245

     Total as per December 31,                     12,750     8,492    10,852

6.   VESSEL AND OTHER PROPERTY

Vessel and Other Property consist of twelve modern double hull Suezmax crude oil
tankers, drydocking charges and ballast tank improvements. Depreciation is
calculated on a straight-line basis over the estimated useful life of the
vessels. The estimated useful life of a new vessel is 25 years.

    All figures in USD '000                             2006            2005
    -----------------------                             ----            ----

    Acquisition Costs as per January 1 ,              531,074          236,913
    Acquisitions                                      317,800          294,161

    Acquisition Costs as per December 31,             848,874          531,074

    Accumulated Depreciation  as per January 1,       (67,141)         (49,612)
    Depreciation                                      (29,254)         (17,529)

    Accumulated Depreciation                          (96,396)         (67,141)

    Net Book Value as per December 31,                752,478          463,933

Included in the above amounts are drydocking charges and ballast tank
improvements with a net book value of $3.2 million and $2.2 million as at
December 31, 2006 and 2005, respectively. Depreciation expenses for drydocking
and ballast tank improvements were $0.6 million and $0.2 million for the years
2006 and 2005, respectively. Accumulated depreciation for docking and ballast
tank improvements were $0.8 million and $0.2 million for the year ended December
31, 2006 and December 31, 2005.

7.   SHARE-BASED COMPENSATION

The Company has two share-based compensation plans, which are described below.
The compensation cost that has been charged against income as part of General
and Administrative expenses for those plans was $7.9 million, $5.0 million, and
$9.3 million for 2006, 2005, and 2004, respectively. Unrecognized compensation
cost related to the Plan is $2.5 million as at December 31, 2006. That cost is
expected to be recognized over a weighted-average period of 1.49 years.

2004 Stock Incentive Plan

Under the terms of the Company's 2004 Stock Incentive Plan ("Plan"), the
directors, officers and certain key employees of the Company and the Manager
will be eligible to receive awards which include incentive stock options,
non-qualified stock options, stock appreciation rights, dividend equivalent
rights, restricted stock, restricted stock units and performance shares. The
Company believes that such awards better align the interests of its employees
with those of its shareholders. A total of 400,000 common shares are reserved
for issuance upon exercise of options, as restricted share grants or otherwise
under the plan. A total of 320,000 options and 16,700 restricted shares have
been issued as at December 31, 2006. All stock options were issued during fiscal
year 2005, while all of the restricted shares were issued during fiscal year
2006. There was no activity during fiscal year 2004.

Stock option awards were granted with an exercise price that is subject to
adjustment for dividends to share holders exceeding 3% of the initial stock
option exercise price. Stock option awards generally vest equally over four
years from grant date and have a 10-year contractual term. There have not been
any modifications to the terms of the granted awards during the year ended
December 31, 2006.

The fair value of each option award is estimated on the date of grant using the
Black-Scholes option valuation model that uses the assumptions noted in the
following table below. Stock options issued to non-employees are measured at
each reporting date and fair value is estimated with the same model used for
estimating fair value of the options granted to employees. Because the option
valuation model incorporates ranges of assumptions for inputs, those ranges are
disclosed. Expected volatilities are based on implied volatilities from
historical volatility of the Company's stock and other factors. Expected life of
the options is estimated to be equal to the vesting period for employees when
calculating the fair value of the options. When calculating the fair value of
the options issued to non-employees, the expected life is equal to the actual
life of options. The Company recognizes the compensation cost for stock options
issued to non-employees over the requisite service period, which is considered
to be equal to the vesting period.

Stock options to employees are measured at fair value at the grant date and the
compensation cost is recognized on a straight-line basis over the vesting
period. The assumptions used when estimating the fair value at grant date are
specified in the table below. Stock options to non-employees are measured at
fair value at the balance sheet date and the assumptions used are specified
separately in the table below.

The risk-free rate for periods within the contractual life of the stock options
is based on the U.S. Treasury yield curve in effect at the time of grant for
options to employees. The risk-free rate at year-end is used for stock options
issued to non-employees.

<TABLE>

                                          December 31, 2006                         December 31, 2005

Weighted average figures         Employees         Non-employees               Employees                 Non-employees
------------------------         ---------         -------------               ---------                 -------------
<S>                                <C>                <C>                       <C>                         <C>
Volatility                         42.60%             40.48%                    42.60%                      42.08%
Dividends yield                     3.0%               3.0 %                     3.0%                        3.0%
Expected life                       3.81               8.27                      3.81                        9.27
Risk-free rate (range)         3.52% - 4.43%           4.70%                 3.52% - 4.43%               4.53% - 4.61%
</TABLE>


A summary of option activity under the Plan as of December 31, 2006, and changes
during the year then ended is presented below:

<TABLE>
                                                            Options -               Options -            Weighted-average exercise
Options                                                     employees             non-employees                    price
-------                                                     ---------             -------------                    -----
<S>                                                         <C>                    <C>                             <C>
Outstanding at January 1, 2006                               240,000                  80,000                       $35.70
Granted                                                         -                       -                            -
Exercised                                                       -                       -                            -
Forfeited or expired                                            -                       -                            -
Outstanding at December 31, 2006                             240,000                  80,000                       $31.01
Exercisable at December 31, 2006                             115,000                  32,500                       $31.01
</TABLE>


Outstanding and exercisable stock options as at December 31, 2006 have a
weighted-average remaining term of 8.09 years for employees and 8.31 years for
non-employees. The exercise price for outstanding stock options as at December
31, 2006 is $31.01.

<TABLE>

                                                             Weighted-average            Options        Weighted-average grant-date
                                             Options        grant-date fair value            -                   fair value
                                           -Employees            - Employees           Non-employees           - Non-employees
                                           ----------            -----------           -------------           ---------------
<S>                                          <C>                    <C>                   <C>                       <C>
Non-vested at January 1, 2006                185,000                $18.38                 67,500                   $21.75
Granted during the year                         -                     -                      -                        -
Vested during the year                       (72,500)               $17.84                (20,000)                  $22.93
Forfeited during the year                       -                     -                      -                        -
Estimated forfeitures unvested options          -                     -                      -                        -
Non-vested at December 31, 2006              112,500                $18.64                 47,500                   $21.25
</TABLE>

Restricted Shares to Employees and Non-Employees

Under the terms of the Company's 2004 Stock Incentive Plan, 16,700 shares of
restricted stock were granted to certain employees and non-employees during
2006. The restricted shares were granted on May 12, 2006 at a grant date fair
value of $31.99 per share.

The fair value of restricted shares is estimated based on the market price of
the Company's shares. The fair value of restricted shares granted to employees
is measured at the grant date and the fair value of restricted shares granted to
non-employees is measured at fair value at each reporting date.

The shares are considered restricted as the holders of the shares cannot dispose
of them for a period of up to four years from issuance, as the restricted shares
vest in yearly instalments during this period. The holders of the restricted
shares do have ordinary shareholder rights including entitlement to dividends
declared during the period and voting rights.

The restricted shares vest in four equal amounts in May 2007, May 2008, May 2009
and May 2010. No restricted shares vested fully during in 2006.

There were 9,700 restricted shares issued to employees and 7,000 restricted
shares to non-employees in 2006. The compensation cost for employees and
non-employees are recognized on a straight-line basis over the vesting period.
The total compensation cost in 2006 related to restricted shares was $80,319.

At December 31, 2006, there were 16,700 restricted shares outstanding at a
weighted-average grant date fair value of $31.99 for employees and $31.99 for
non-employees. As of December 31, 2006, unrecognized compensation cost related
to unvested restricted stock aggregated $470,433, which will be recognized over
a weighted average period of 3.4 years.

The table below summarizes the Company's restricted stock awards as of December
31, 2006:

<TABLE>

                                                              Weighted-average                         Weighted-average grant-date
                                       Restricted shares   grant-date fair value     Restricted shares         fair value
                                           -Employees            - Employees         - Non-employees        - Non-employees
                                           ----------            -----------         ---------------        ---------------
<S>                                          <C>                   <C>                    <C>                      <C>
Outstanding at January 1, 2006                 -                     -                      -                        -
Granted during the year                      9,700                 $31.99                 7,000                    $31.99
Vested during the year                         -                     -                      -                        -
Forfeited during the year                      -                     -                      -                        -
Outstanding at December 31, 2006             9,700                 $31.99                 7,000                    $31.99
</TABLE>

Restricted Shares to Manager

Prior to December 31, 2004 the Management Agreement provided that the Manager
would receive 1.25% of any gross charterhire paid to the Company. In order to
further align the Manager's interests with those of the Company, the Manager
agreed to amend the Management Agreement, effective October 12, 2004, to
eliminate this payment, and the Company has issued to the Manager restricted
common shares equal to 2% of our outstanding common shares at par value of $0.01
per share. Any time additional common shares are issued, the Manager will
receive additional restricted common shares to maintain the number of common
shares issued to the Manager at 2% of total outstanding common shares. These
restricted shares are non-transferable for three years from issuance. During
2006 the Company has issued to the Manager 205,392 shares at an average fair
value of $30.62. The share-based compensation expense related to the issuance of
restricted shares to the Manager of $6.3 million in 2006 was classified as
general and administrative expenses.

8.   LONG-TERM DEBT

In September 2005, the Company entered into a $300 million revolving credit
facility, which is referred to as the 2005 Credit Facility. The 2005 Credit
Facility became effective as of October 2005 and replaced the previous credit
facility from October 2004, a portion of which was set to mature in October
2005. The 2005 Credit Facility will mature in September 2010.

The 2005 Credit Facility provides funding for future vessel acquisitions and
general corporate purposes. The 2005 Credit Facility cannot be reduced by the
lender and there is no repayment obligation of the principal during the five
year term. Amounts borrowed under the 2005 Credit Facility bear interest at an
annual rate equal to LIBOR plus a margin between 0.70% and 1.20% (depending on
the loan to vessel value ratio). The Company pays a commitment fee of 30% of the
applicable margin on any undrawn amounts. Total commitment fees paid for the
year ended December 31, 2006 and December 31, 2005 were $0.7 million and $0.7
million, respectively.

In September 2006, the Company increased the 2005 Credit Facility to $500
million. The other material terms of the 2005 Credit Facility were not amended.
The undrawn amount of this facility as of December 31, 2006 and 2005 was $326.5
million and $170 million, respectively.

Borrowings under the 2005 Credit Facility are secured by mortgages over the
Company's vessels and assignment of earnings and insurance. The Company will be
able to pay dividends in accordance with its dividend policy as long as it is
not in default under the 2005 Credit Facility.

Accrued interest as per December 31, 2006 is $1.0 million and was paid during
the first quarter of 2007.

9.   INTEREST EXPENSE

Interest expense consists of interest expense on the long-term debt, the
commitment fee and loan financing costs related to the $500 million 2005 Credit
Facility. The $173.5 million drawn on the facility bears interest equal to LIBOR
plus a margin between 0.7% and 1.2%. The loan financing costs incurred in
connection with the refinancing of the previous credit facility are deferred and
amortized over the term of the 2005 Credit Facility on a straight-line basis.
Amortization of loan costs is included in the interest expense. The amortization
of loan financing costs was for the years 2006, 2005 and 2004 $0.4 million, $0.7
million and $0.1 million respectively. Total capitalized loan financing costs
are $1.9 million as per December 31, 2006 and $1.7 million as per December 31,
2005. The amortization of loan financing costs for the years 2007 to 2009 are
$0.5 million per year and $0.4 million for the year 2010.

10.  DEFERRED REVENUE

Deferred revenue of $0.5 million represents prepaid freight received from one of
our customers prior to December 31, 2006, for services to be rendered during
January 2007.

11.  ACCRUED LIABILITIES

     All figures in USD '000                         2006              2005
     -----------------------                         ----              ----

     Accrued Interest                               1,003             1,170
     Accrued Expenses                               5,054             1,459
     Other Current Liabilities                      4,808                 0
     Other                                            326               244

     Total as per December 31,                     11,191             2,873

The line item Other Current Liabilities relates to liabilities incurred by our
technical and commercial managers at our risk.

12.  SHARE HOLDERS' EQUITY

Authorized, and issued and outstanding common shares roll-forward is as follows:

                                            Authorized        Issued and
                                               Shares       Outstanding Shares
                                               ------       ------------------

     Balance at December 31, 2003           51,200,000           9,706,606

     Issuance of Common Shares in
     Follow-on Offering                                          3,105,000
     Share-based Compensation                                      256,232

     Balance at December 31, 2004           51,200,000          13,067,838

     Issuance of Common Shares in
     Follow-on Offering                                          3,500,000
     Share-based Compensation                                       76,658

     Balance at December 31, 2005           51,200,000          16,644,496

     Issuance of Common Shares in
     Follow-on Offering                                          4,297,500
     Share-based Compensation                                       87,704
     Issuance of Common Shares in
     Follow-on Offering                                          5,750,000
     Share-based Compensation                                      117,347
     Restricted Shares                                              16,700
     Share-based Compensation                                          341

     Balance at December 31, 2006           51,200,000          26,914,088

The total issued and outstanding shares as of December 31, 2006 were 26,914,088
shares of which 538,282 shares were restricted to the Manager and 16,700 shares
were restricted to employees and non-employees as described in Note 7. The total
issued and outstanding shares as of December 31, 2005 was 16,644,496 shares of
which 332,890 shares were restricted as described in Note 7.

13.  COMMITMENTS AND CONTINGENCIES

The Company may be a party to various legal proceedings generally incidental to
its business and is subject to a variety of environmental and pollution control
laws and regulations. As is the case with other companies in similar industries,
the Company faces exposure from actual or potential claims and legal
proceedings. Although the ultimate disposition of legal proceedings cannot be
predicted with certainty, it is the opinion of the Company's management that the
outcome of any claim which might be pending or threatened, either individually
or on a combined basis, will not have a materially adverse effect on the
financial position of the Company, but could materially affect the Company's
results of operations in a given year.

No claims have been made against the Company for the fiscal year 2006 or 2005.
The Company is not a party to any legal proceedings for the year ended December
31, 2006 and December 31, 2005, respectively.

14.  SUBSEQUENT EVENTS

In February 2007, the Company declared a dividend of $1.00 per share in respect
of the fourth quarter of 2006 which was paid to shareholders in March 2007.

In May 2007, the Company declared a dividend of $1.24 per share in respect of
the first quarter of 2007 which will be paid to shareholders in May 2007.

In May 2007, the Board of Directors decided to implement a Pension Plan for the
CEO. The features of such a plan are expected to be in place during the second
half of 2007. The CEO has no plans at all to retire from his present position.


<PAGE>



ITEM 19. EXHIBITS

1.1  Memorandum of Association of the Company incorporated by reference to
     Exhibit 3.1 to the Company's registration statement on Form F-1 filed with
     the Securities and Exchange Commission on August 28, 1995 (Registration No.
     33-96268).

1.2  Bye-Laws of the Company incorporated by reference to Form 6-K filed with
     the Securities and Exchange Commission on November 18, 2004.

2.1  Form of Share Certificate incorporated by reference to Exhibit 4.1 to the
     Company's registration statement on Form F-1 filed with the Securities and
     Exchange Commission on August 28, 1995 (Registration No. 33-96268).

4.1  Form of Bareboat Charter between Nordic American Tanker Shipping Limited
     and BP Shipping Ltd, incorporated by reference to Exhibit 10.3 in the
     Registration Statement filed on Form F-1, Registration No. 33-96268.

4.2  Amended and Restated Management Agreement dated October 12, 2004, between
     Scandic American Shipping Ltd. and Nordic American Tanker Shipping Limited
     incorporated by reference to Form 6-K filed with the Securities and
     Exchange Commission on October 29, 2004.

4.3  Amendment to Restated Management Agreement dated April 29, 2005, between
     Scandic American Shipping Ltd. and Nordic American Tanker Shipping.

4.4  2004 Stock Incentive Plan incorporated by reference to Exhibit 4.5 to the
     Company's annual report on Form 20-F for the fiscal year ended December 31,
     2004 filed with the Securities and Exchange Commission on June 30, 2005.

4.5  Revolving Credit Facility Agreement by and among the Company and the
     financial institutions listed in schedule 1 thereto, dated September 14,
     2005, incorporated by reference into the Company's annual report on Form
     20-F filed June 30, 2006.

4.6  Addendum No. 1 to Revolving Credit Facility Agreement by and among the
     Company and the financial institutions listed in schedule 2 thereto, dated
     September 21, 2006.

12.1 Rule 13a-14(a) Certification of the Chief Executive Officer.

12.2 Rule 13a-14(a) Certification of the Chief Financial Officer.

13.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section
     1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

13.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section
     1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

15.1 Consent of Independent Registered Public Accounting Firm.


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                                   SIGNATURES

     The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

                                         NORDIC AMERICAN TANKER
                                         SHIPPING LIMITED



                                         By:/s/ Herbjorn Hansson
                                            -----------------------------
                                            Name:    Herbjorn Hansson
                                            Title:   Chairman, Chief Executive
                                                     Officer and President

DATED:  June 29, 2007



SK 01318 0002 786748