UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

OR

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

OR

OR

Date of event requiring this shell company report

For the transition period from                to

Commission file number 001-31236

TSAKOS ENERGY NAVIGATION LIMITED

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

Bermuda

(Jurisdiction of incorporation or organization)

367 Syngrou Avenue

175 64 P. Faliro

Athens, Greece

011-30210-9407710

(Address of principal executive offices)

Paul Durham

367 Syngrou Avenue

175 64 P. Faliro

Athens, Greece

Telephone: 011-30210-9407710

E-mail: ten@tenn.gr

Facsimile: 011-30210-9407716

(Name, Address, Telephone Number, E-mail and Facsimile Number of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

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

As of December 31, 2017, there were 86,319,583 of the registrant’s Common Shares, 2,000,000 Series B Preferred Shares, 2,000,000 Series C Preferred Shares, 3,424,803 Series D Preferred Shares and 4,600,000 Series E Preferred Shares outstanding.

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

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from 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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

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

Large accelerated filer  ☐    Accelerated filer   ☒    Non-accelerated filer  ☐    Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ☐    Item 18  ☐

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  ☒

TABLE OF CONTENTS

-i-

FORWARD-LOOKING INFORMATION

All statements in this Annual Report on Form 20-F that are not statements of historical fact are “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. The disclosure and analysis set forth in this Annual Report on Form 20-F includes assumptions, expectations, projections, intentions and beliefs about future events in a number of places, particularly in relation to our operations, cash flows, financial position, plans, strategies, business prospects, changes and trends in our business and the markets in which we operate. These statements are intended as forward-looking statements. In some cases, predictive, future-tense or forward-looking words such as “believe,” “intend,” “anticipate,” “estimate,” “project,” “forecast,” “plan,” “potential,” “may,” “should” and “expect” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.

Forward-looking statements include, but are not limited to, such matters as:

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We caution that the forward-looking statements included in this Annual Report on Form 20-F represent our estimates and assumptions only as of the date of this Annual Report on Form 20-F and are not intended to give any assurance as to future results. These forward-looking statements are not statements of historical fact and represent only our management’s belief as of the date hereof, and involve risks and uncertainties that could cause actual results to differ materially and inversely from expectations expressed in or indicated by the forward-looking statements. Assumptions, expectations, projections, intentions and beliefs about future events may, and often do, vary from actual results and these differences can be material. There are a variety of factors, many of which are beyond our control, which affect our operations, performance, business strategy and results and could cause actual reported results and performance to differ materially from the performance and expectations expressed in these forward-looking statements. These factors include, but are not limited to, supply and demand for crude oil carriers, product tankers and LNG carriers, charter rates and vessel values, supply and demand for crude oil and petroleum products and liquefied natural gas, accidents, collisions and spills, environmental and other government regulation, the availability of debt financing, fluctuation of currency exchange and interest rates and the other risks and uncertainties that are outlined in this Annual Report on Form 20-F. As a result, the forward-looking events discussed in this Annual Report on Form 20-F might not occur and our actual results may differ materially from those anticipated in the forward-looking statements. Accordingly, you should not unduly rely on any forward-looking statements.

We undertake no obligation to update or revise any forward-looking statements contained in this Annual Report on Form 20-F, whether as a result of new information, future events, a change in our views or expectations or otherwise. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

PART I

Tsakos Energy Navigation Limited is a Bermuda company that is referred to in this Annual Report on Form 20-F, together with its subsidiaries, as “Tsakos Energy Navigation,” “the Company,” “we,” “us,” or “our.” This report should be read in conjunction with our consolidated financial statements and the accompanying notes thereto, which are included in Item 18 to this report.

Not Applicable.

Not Applicable.

Selected Consolidated Financial Data and Other Data

The following table presents selected consolidated financial and other data of Tsakos Energy Navigation Limited for each of the five years in the five-year period ended December 31, 2017. The table should be read together with “Item 5. Operating and Financial Review and Prospects.” The selected consolidated financial data of Tsakos Energy Navigation Limited is a summary of, is derived from and is qualified by reference to, our consolidated financial statements and notes thereto which have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”).

Our audited consolidated statements of comprehensive income, other comprehensive income, stockholders’ equity and cash flows for the years ended December 31, 2017, 2016, and 2015, and the consolidated balance

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sheets at December 31, 2017 and 2016, together with the notes thereto, are included in “Item 18. Financial Statements” and should be read in their entirety.

Selected Consolidated Financial and Other Data

(In thousands of U.S. dollars, except for share and per share amounts and fleet data)

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Derivation of time charter equivalent per day (amounts in thousands of U.S. dollars except for days and per day amounts):

Ratio of Earnings to Fixed Charges and Preference Dividends

The following table sets forth our ratio of earnings to fixed charges and preference dividends for the periods presented:

Capitalization

The following table sets forth our (i) cash and cash equivalents, (ii) restricted cash and (iii) consolidated capitalization as of December 31, 2017 on:

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Other than these adjustments, there has been no material change in our capitalization from debt or equity issuances, re-capitalization or special dividends between December 31, 2017 and April 20, 2018.

This table should be read in conjunction with our consolidated financial statements and the notes thereto, and “Item 5. Operating and Financial Review and Prospects,” included elsewhere in this Annual Report.

Reasons For the Offer and Use of Proceeds

Not Applicable.

5

General Market Overview—World Oil Demand / Supply and the Tanker Market

All of the statistical data and other information presented in this section entitled “General Market Overview—World Oil Demand / Supply and the Tanker Market,” including the analysis of the various sectors of the oil tanker industry, has been provided by Howe Robinson Partners (UK) Ltd (“Howe Robinson”). Howe Robinson has advised that the statistical data and other information contained herein are drawn from its database and other sources. In connection therewith, Howe Robinson has advised that: (a) certain information in Howe Robinson’s database is derived from estimates or subjective judgments; (b) the information in the databases of other maritime data collection agencies may differ from the information in Howe Robinson’s database; and (c) while Howe Robinson has taken reasonable care in the compilation of the statistical and other information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures.

In 2017, OPEC’s market management agreement altered trade flows, increasing voyage distances as Atlantic crude oil became attractive to Asian buyers. U.S. crude exports increased substantially and large volumes were sent east. Due to recent U.S. infrastructure plans, we expect this trade to grow.

Involuntary over compliance with OPEC prescribed targets for reduced production by Venezuela and under compliance by some Middle East Gulf (MEG) producers all helped solidify tanker demand. Product demand exceeding domestic refinery capacity in South and Central America helped increase U.S. product exports to the region. Longer haul West-East naphtha movements grew, drawing more LRs into the Atlantic Basin. Chinese product export quotas increased, with exports to destinations primarily served by the MR market. However, except for occasional rallies, overall earnings remained subdued across all markets as the increase in demand for tonnage still did not match tonnage supply and the market remains in structural oversupply.

OPEC

Initially OPEC increased production during 2014-2016 in an attempt to defend their market share against an increasingly assertive shale market. The ever lowering breakeven of shale producers and their increased hedging activities ensured that oil production globally, exceeded demand. This led to two outcomes:

Within this environment, OPEC along with ten non-OPEC nations agreed in November 2017 to limit their production with the nominal target being a return of stocks to their five year average beginning in January 2018. OPEC agreed to a cut of 1.2mb/d with non-OPEC signatories cutting 558kb/d. As a result of the cut, stocks dropped by 216m bbl to 2,850m bbl. Nigeria and Libya, although OPEC members, were exempt from the cuts due to domestic instability.

If the deal works fully and OPEC achieves its stated objective of reducing stocks to their five-year average by June, then there will be extra pressure on the group’s ability to maintain the agreement. If the agreement subsides by June, then we may see old trade routes such as increased volumes MEG-East re-emerge at the risk of longer haul WAF-East stems.

OPEC Supply

Compliance by OPEC members as a group with OPEC prescribed targets for reduced production has been strong, average compliance was 103% during 2017. However this masks over compliance by some members and under compliance by others.

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Saudi Arabia

Saudi compliance with OPEC prescribed targets for reduced production averaged 119% during 2017, the highest voluntary decline and compliance of any OPEC/Non-OPEC member. We expect compliance to remain strong and supportive of the oil prices, at least until the Saudi Aramco IPO. After initially running down domestic stocks in order to maintain exports, production compliance translated into reduced exports. Saudi Arabia has concentrated the effects of the production cut on exports to the U.S.. Saudi exports to the U.S. decreased from a monthly average of 4,522kt/month in 2016 (17.3% market share) to 3,370kt/month in 2017 (Jan-Oct) (15% market share). Consequently, crude tonne-miles (TM) fell 27% year-over-year (YoY) to average 39.42bn TM in 2017. Increased Asian demand, coupled with stronger U.S. domestic production would, we expect, result in increased displacement of Saudi exports to the U.S. in favour of the Far East. The market share of exports to the Far East increased to 52% during 2017, however in terms of TM the rise was only marginal (+1% YoY to 85bn TM). Displaced Saudi-West trade has reduced fleet efficiency and we expect, with the ramping up of West Atlantic crude production, fleet efficiency would decrease further, creating a floor in West Atlantic/East rates. Saudi refinery capacity additions reflect Saudi intentions of capturing a greater share of the value addition chain.

Iran

Iran achieved an increase in the production deal, with the agreement to cap production 90kb/d higher at 3.8mb/d. National Iranian Tanker Company (NITC) vessels storing crude oil have been wound back. The expected post sanctions boost in production capacity has not occurred (although production has increased) largely resulting from the threat of a return of sanctions from the Trump administration. The U.S. has stated that further waivers to Iranian sanctions will not be granted unless the nuclear deal is renegotiated. This represents a

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major downside risk to supply, if sanctions are reimposed and assuming Europe supports the return of sanctions, Iranian supply could quickly return to 2015 levels. In addition, Iran’s low cost reserves appear to present an attractive investment opportunity for IOCs, however the new IPC (oil exploration contract) contract, although better than the previous buyback model, still causes consternation and may delay a ramp up of Iranian production capacity. Iranian exports to Europe increased during 2017 from 435kb/d in 2016 to an average of 664kb/d last year, primarily to Italy. Market share of European exports increased (from 21% in 2016 to 32% in 2017) primarily at the cost of decreased exports to India (467kb/d in 2016 to 4.9kb/d in 2017). Crude TM demand rose by 8% YoY from 43.8bn TM in 2016 to 47.1bn TM last year with TM to South Europe and the Black Sea surging by 47% YoY to 11.3bn TM at the expense of Indian TM demand that fell by 6% YoY to 1.8bn TM.

Iraq

Iraqi compliance with the OPEC agreement has been notable for its non-compliance. Average Iraqi compliance has been 45% during 2017, with January 2018 compliance at 33%. There is uncertainty around the status of exports via northern Iraq, which were halted in September 2017 after the Kurdish Regional Government (KRG) tabled and won referendum for independence from Iraq for Kurdistan. This suspended 650kb/d of production of which 600kb/d was historically exported, via Ceyhan into Europe. The Iraqi government has announced that it has reached a deal with KRG to restart Kirkuk pipeline deliveries, however this has not been confirmed by the KRG and no further details have been given.

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Southern Iraq export capacity (4.6mb/d) is running ahead of production (3.5mb/d in January 2018). The bottleneck in increasing exports appears to be the terms at which production contracts were issued and delays in installing field infrastructure. Delays in a field infrastructure development programme have seen forecast production from the southern fields decrease from 7.5mb/d to 5mb/d.

Iraq has been focusing on increasing exports to the U.S. instead of the eastern markets. Exports to the U.S. rose by an average of 745kt/month in 2017 over 2016. U.S. market share of Iraqi imports from the tracked countries increased from 12% to 16% over the same period, while TM demand rose by 26% YoY from 22.8bn TM in 2016 to 28.7bn TM.

As forecast production capacity is set to increase, and as there are no export infrastructure bottlenecks we expect exports to the U.S. to increase this year.

Venezuela

Venezuelan production collapsed in 2017 by 22% from 2.02mb/d at the start of 2017 to 1.61mb/d in January 2018. As a result, involuntary Venezuelan compliance increased from 22% in January 2017 to 484% in January 2018. Venezuela has been confronted with a number of problems, primarily oil backed debts, which are affecting field investment and export opportunities.

PDVSA has oil backed debts of USD 25bn, owed mainly to China and Russia. Loans have to be repaid with oil deliveries and are therefore non cash generating. The main cash generating businesses were exports to the

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U.S. and India. Exports to these two countries decreased in 2017 in favour of Russia and China. TM to India and the U.S. fell by 16% and 17% YoY to 12.6bn TM and 4bn TM, respectively, while TM to China rose by 15% YoY to 15.1bn TM. Although, after the purchase by Rosneft of the Essar refinery in Vadinar in the summer of last year, we expect an increase in the Venezuela-India trade which will still not be cash generative.

A decrease in sales to India and the U.S. has led to a lack of cash available to invest in field maintenance and has resulted in production deterioration. Production from Orinoco Heavy field, the main field remaining in substantial production requires spiking with naphtha to meet export specifications. With a decrease in cash generative oil sales, PDVSA is having difficulties purchasing naphtha, which in turn is creating volatility in its Orinoco Heavy specification. The volatility in specification made marketing more difficult creating a vicious circle.

Angola

After Venezuela, Angola is expected to post the biggest decline in production over the medium term. Angolan production has already decreased by 700kb/d during 2017. However, this year they may experience a bounce in production capacity with the 230kb/d Kaombo field expected to come online. However, of tracked countries, exports remained stable in 2017 versus 2016. West-East exports increased with exports to the Far East increasing in 2017 whilst in almost all other tracked destinations its market share decreased. However, crude TM demand rose marginally by 1% YoY to 54.3bn TM driven by a 12% YoY increase in the TM demand to China.

Nigeria

Nigerian liquids production increased during 2017 with reported crude production increasing from 1.43mb/d to 1.66mb/d in 2017. In November 2017, at OPEC’s extension meeting, Nigeria voluntarily agreed to extend its cap on crude production at 1.8mb/d, however, Nigerian liquids production was 2.09mb/d in January 2018.

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300-400k b/d of that is condensate production out of which 107kb/d is from the Akpo field alone and the Agbami field production is 220-250k b/d. There is no OPEC wide agreement on how to define condensate, the Nigerian Oil Minister insists some fields are condensate fields despite disagreement regarding their grade by outside analysts. Much of Nigerian condensate gets blended into the crude stream before export—making exact counting difficult. However, even after accounting for Nigerian condensate production, Nigeria managed to breach its production cap of 1.80m b/d in December. There is no reason to believe that this trend would not continue for the foreseeable future or at least until such time that OPEC agrees on an overall production cap for Nigeria whether by defining condensate or by imposing an overall liquids production cap. Increasing Nigerian production would provide support to the tanker market. Crude TM demand out of Nigeria rose by 7% YoY to 37.09bn TM.

Libya

Libya also agreed to keep its crude output below 1m b/d. Libyan production was 1m b/d in January, however, structural problems in Libya remain. The national oil company has had its budget slashed by 50%, which will impact field maintenance and, by extension, production reliability. Due to the similarity of Libyan and shale crudes, weaker Libyan production allows for increased U.S. exports. However, the opposite is also true, therefore Libya may feel less pressure to conform to the output agreement than others such as Nigeria. Additionally the pressure to conform may be less as the questions over sustainability of production are more profound. Field production or export capacity is consistently being attacked and brought offline. Most recently the Elephant field was brought offline after an attack by the parastatal Petroleum Facilities Guards (PFG), an indication of the insecurity in production sustainability.

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Non-OPEC supply

Russia

January 2018 Russian production was 11.33m b/d. Russia insisted and won approval for a mid-term review of the OPEC extension agreement in June 2018. Russia completed the second spur of the ESPO pipeline with first oil pumping through the pipeline at the start of 2018. The second ESPO spur adds an additional 300kb/d of export capacity. In order to fill the additional pipeline Russia has diverted its West Siberian sweet crude, which was previously blended into the Urals grade, to ESPO. The diversion of West Siberian crude to ESPO has led to Urals crude sulphur levels increasing, and in some cases hitting 1.8% (the maximum permitted levels) sulphur content. If this trend continues and sulphur levels increase we can expect traditional Urals destinations of Europe to decrease imports of this grade. Some buyers have already started looking for alternatives, which could increase exports from the U.S. A lack of new supply due to the OPEC/Non-OPEC deal capping production has prevented additional sweet barrels from coming onstream. The Far Eastern exports have increased by 6% while 2017 Black Sea exports have remained stable. Russian TM out of the Black Sea increased by 50% YoY while TM out of the Far Eastern Russian ports rose by 5% YoY last year following an 11% YoY fall in 2016.

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Mexico

Mexican production declined by 230kb/d in 2017 to 2.1mb/d today, more than double its allotted cut of 100kb/d and is set to decline by a further 180kb/d this year. Exports to all tracked destinations fell, however the market share of exports to the U.S. increased by 4%. Driven by a strong second half of 2017, Mexican crude TM demand rose by 12% YoY to average at 17.5bn TM in 2017 while TM to the U.S. edged 14% higher YoY to 1.6bn TM.

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USA

U.S. supply forecasts have consistently been beaten by the rise of shale. At the start of 2017 IEA predicted U.S. oil supply to be 12.84mb/d, average production in 2017 actually was 13.2mb/d-growth of 670kb/d. Currently, production in 2018 is expected to be 14.72mb/d, a further growth of 1.52mb/d during 2017. Growth is dominated by production increases in the Permian Basin.

Although breakeven prices have risen slightly and are forecast to rise this year, the main cap on Permian Basin growth is not WTI price vs breakeven, but takeaway capacity for exports. Drilled but uncompleted wells (DUCs) generally increase in times of low oil prices as producers wait for prices to rebound before increasing production. However, Permian Basin DUCs are increasing despite the above breakeven oil price. This again is due to takeaway capacity blocking a further rise in production. The IEA expects U.S. pipeline capacity to increase to 2.5mb/d this year. With the building of the Diamond pipeline (200kb/d), moving crude from Cushing, Oklahoma to Memphis, the Capline pipeline has become superfluous. The 1.2mb/d Capline pipeline currently runs south/north from St. James, Louisiana (near LOOP) to Memphis and has stated that it intends to reverse the pipeline and provide an export route for Canadian and North Dakota crude production. Although the provisional reversal date is 2022, with LOOP expected to begin bidirectional operations this year, the Capline reversal may be accelerated particularly as currently pipeline flows have fallen to 250kb/d.

Growth in production has driven growth in exports. Crude exports rose by 115% from 520kb/d in 2016 to 1.12mb/d in 2017. Exports appear to be driven by the Brent/WTI price spread, which once it reaches $4/bbl, exports spike as imports from the U.S. become cost effective when adjusted for freight. Exports increased to both China/Far East and Europe. However exports to China/Far East increased by 7.8x compared with European imports which were comparatively lower at 3.1x. As export infrastructure capacity develops in the U.S., we expect exports to move away from being solely arbitrage driven and towards a more structural trade. A number of Asian company leaders have indicated that they intend to import increasing volumes from the U.S.

The increase in exports last year led to a rally in TM demand as TM out of the U.S. surged by 340% YoY to 24.4bn TM in 2017 from 5.6bn TM in 2016. The rise was mainly driven by increased volumes to the Far East

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where TM rose to 11bn TM compared to slightly less than 1bn TM in 2016. VLCC TM demand rose to 14.1bn TM from 1.4bn TM in 2016 following the increased demand for long-haul voyages, while Suezmaxes rose to 6bn TM in 2017 compared to 1.5bn TM in 2016. Aframaxes saw the smallest YoY rise both in absolute (+1.8bn TM) and in percentage terms (+70%) as the trend of barrels heading east has substituted Aframax demand in favour of larger ships. The upcoming infrastructure developments in the U.S Gulf in order to accommodate the loading of larger ships might further reduce the Aframax market share in the U.S.

Demand

Global oil demand increased by 1.64mb/d against a forecast increase of 1.3mb/d in January 2017. 2018 global demand is set to increase further by 1.4mb/d. Low oil prices, and strong economic growth helped oil demand growth during 2017. Demand growth is focused in the East of Suez region which will make up 57% of global demand growth (0.8mb/d), of which China and India contribute 75% (0.6mb/d).

China

China remains the swing factor for the crude tanker demand. 2017 oil demand grew by 660 kb/d, 2018 demand is expected to increase by 360kb/d to 12.87mb/d. In 2017 China surpassed the U.S. to become the world’s largest crude importer with imports increasing to 8.48mb/d in 2017 compared to 7.68mb/d in 2016. Imports from West Africa increased as OPEC cuts took hold, due to:

Saudi Arabia continued to follow its commercial strategy of focusing on maintaining its market share in Asia and imports from Saudi Arabia increased last year over 2016.

Russia has grown to become the largest import partner for China with imports reaching 1.21mb/d compared to imports from Saudi Arabia of 1.05mb/d in 2017. Imports from Russia will increase this year as the second ESPO spur started flowing in January 2018.

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As discussed previously, U.S. crude exports were 150kb/d in 2017 up from virtually zero the year prior. We expect U.S. crude imports to increase this year. Consequently TM demand to China surged to 7.2bn TM from 1bn TM in 2016 with the majority of the increase benefiting the VLCC sector that rose to 6.7bn TM.

Against this, domestic production decreased by 110kb/d in 2017 and is expected to be 100k b/d less this year at 3.77mb/d. Chinese SPR fill rate for the whole year is not yet known, but SPR storage is expected to continue to provide support to the market. Imports increased last year from 7.68mb/d in 2016 to 8.48m b/d in 2017. 720kb/d of refinery capacity came on-stream in 2017 (560kb/d new capacity and 182kb/d upgraded). Refineries require 21 days of stock to ensure smooth operations, 560kb/d of new capacity installed last year would have resulted in 11.8 mb of additional import demand (over actual crude demand). 200kb/d of capacity is expected to come on-stream this year which would equal 4.2m b/d of additional stock holding requirement. The 400kb/d Myanmar pipeline from Ramree to the 260kb/d Anning refinery came onstream in the second quarter of 2017. The pipeline is expected to feed additional refineries to be established in Anning.

Teapots received a quota of 91.73m T for the whole 2017, while this year Beijing issued 55% higher quotas of 142.42mT. However there is a major downside risk that teapots may not be able to reach their quotas this year as the State Administration for Taxation (SAT) is intending to introduce new taxation laws and invoicing systems which will reduce teapot profits. Initially the new laws were announced to be implemented by January 2018, then were pushed to March 1, 2018 and are now targeted for May 1, 2018. If/when the new laws are implemented then we can expect crude demand from teapots to be reduced. This would primarily impact Brazilian crude grades which teapots prefer (56% of Brazilian imports in 2017 destined for teapots).

India

Indian oil demand is forecast to grow by 300 kb/d this year (2018 demand 4.98 mb/d) against 2017 growth of 120 kb/d (2017 demand 4.68 mb/d).

In late 2016, India decided to remove 500 and 1,000 rupee notes from circulation overnight in a bid to crack down on black money. This impacted first half of 2017 oil demand, which increased by 110kb/d over the first half of 2016, compared with growth of 635kb/d in the first half of 2015 over the first half of 2016. Oil demand growth started recovering in the second half of 2017, however a general sales tax (GST) was introduced. Prior to

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the introduction of the GST Indian states individually established their state tax regimes which would cause delays in inter-state trade and excess paperwork, increasing the cost of trade. The GST was intended to harmonise the taxation systems across the states, however confusion regarding its implementation and product categorisation caused confusion and interstate trade to slow and resultantly oil demand growth slowed.

However, the IEA expects demand growth to return with vigour this year. Instability in many OPEC countries and increasing U.S. production has prompted Indian refiners to seek to diversify their crude import sources. Indian refiners imported increasing volumes from both West Africa and the U.S. Additionally as the Dubai benchmarked crudes (e.g. Saudi crude) increased relative to Brent benchmarked crudes, Atlantic grades became more attractive. Starting at zero imports from the U.S., India began importing in earnest from August onwards at an average of 61kb/d (August 2017 to November 2017). Imports are expected to increase further as multiple Indian refineries’ management teams have indicated.

In 2017 India added two refineries of a total capacity of 164kb/d with a 120kb/d refinery built on the South Western coast and the second refinery built inland. This year no notable refinery additions are expected, rather the growth in demand is assumed to come from increasing utilisation rates.

Europe

European oil demand increased by 360kb/d in 2017 over 2016 and is expected to increase by 160kb/d this year. 2017 oil demand growth was attributable to lower oil prices, which have firmed recently, easing demand growth this year. In particular gasoil demand increased in 2017.

The increase in demand was fed by the MEG and North Africa. MEG exports were primarily from Iran, imports from Iran increased from 435kb/d in 2016 to 798kb/d in 2017. Iranian imports now make up 7% of imports, up from 3.9% in 2016. Russian imports decreased by 31kb/d in 2017 after increasing by 245kb/d in 2016. Over the near term, we expect the downside to Russian imports to increase due to the prevailing political environment.

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USA

U.S. crude demand increased by 130kb/d in 2017 over 2016 and is expected to increase further by 200kb/d this year to 20.02mb/d. Year on year imports remained stable at 7.8mb/d in 2017. Imports from West Africa and the MEG (excluding Saudi Arabia) increased whilst imports from the Caribbean and Saudi Arabia decreased. Almost all West African export partners increased their volumes in 2017. The main increase from the MEG was from Iraq, which increased by 192kb/d in 2017. Better Iraqi export infrastructure and a strategic decision to replace Saudi supplies has resulted in higher Iraqi exports to the U.S. Decreases from the Caribbean were from Venezuela and Colombia. Colombian exports are expected to decrease due to a falling investment in producing fields and a resurgence in guerrilla attacks.

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Products Market

China Product Market

Chinese refinery capacity increased by 560kb/d in 2017 with an additional 180kb/d of upgrading capacity installed. Chinese clean product demand was 8.2mb/d in 2017 and is expected to 8.47mb/d this year. Independent refinery quotas increased from 1.75mb/d in 2017 to 3.8mb/d this year.

Gasoline

Chinese gasoline demand increased in 2017 by 59kb/d over 2016 to 2.93mb/d and is expected to grow by 118kb/d in 2018 to 3.05mb/d. However exports concurrently rose from 81kt/month in 2016 (full year) to 88kt/month in 2017 (full year), the majority of the increase in exports were destined for Singapore and Malaysia, helping firm eastern MR demand. We expect gasoline exports to increase this year, primarily within the East – continuing to provide support to eastern MRs. Last year’s first six months gasoline export quota was 4.44kt compared with current year’s first six months export quota of 6.5kt. Additionally, the Chinese SAT has introduced a domestic consumption tax of ¥1.52/ltr for gasoline and an invoicing system which would accurately identify products. These factors would most likely push smaller refineries out of domestic markets to focus on exports.

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Gasoil

Gasoil demand increased by 86kb/d in 2017 over 2016 and is expected to increase by another 48kb/d this year to reach 3.5mb/d. Many of the factors affecting the gasoline trade also apply to the gasoil market. Similar to the gasoline market, despite rising domestic demand, gasoil exports have increased over the same time period. The largest increase in exports were to the short haul routes to South Korea, Hong Kong and Philippines. Again, similar to the gasoline market, the SAT has introduced a domestic gasoil consumption tax of ¥1.20/ltr, pushing out smaller refineries into the export market.

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Jet

Jet demand increased by 63kb/d in 2017 and is expected to increase by 35kb/d this year to 748kb/d. Jet exports to most major destinations either fell or were stable in 2017 over 2016. Total jet exports grew by 2% in 2017 compared to 9% in 2016 and 12% in 2015. As domestic Chinese jet demand increases and the U.S. continues on its path as the major product exporter, particularly in the West of Suez market, we expect Chinese jet exports growth to remain subdued.

India Products market

Indian refinery capacity increased by 164kb/d in 2017 and is expected to increase by 16kb/d this year. Major refinery capacity additions are expected to come on-stream post 2020. As the previously discussed twin shocks to the economy of GST and demonetisation dissipate, we expect Indian product demand growth to strengthen this year. Jet demand was not affected by the demonetisation shock as the majority of passenger ticket purchases are transacted through credit cards. Jet demand increased by 9% in 2017 over the previous year and is expected to continue to grow strongly this year due to increasing affordability and growing incomes.

Gasoline

Indian domestic demand increased by 7% in 2017 and by 12% in 2016, mainly due to an increase in passenger car sales. In addition, Indian gasoline fuel standards were tightened in 2017 to Bharat IV standard (the equivalent of Euro IV) nationwide. As a result imports increased last year by 9%, primarily from Iran which has become self-reliant in gasoline production after the start-up of the Persian Gulf Star refinery. Phase one of the refinery (120kb/d capacity) was completed in 2017 with Phase two (120kb/d) starting up in February this year. As gasoline demand is expected to continue to grow strongly this year, short haul imports could increase, helping support the MR market.

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Gasoil

Indian gasoil demand increased by 3.3% in 2017 compared by 5.5% on average for the two years preceding that. Previously discussed macro events affected diesel demand in 2017, second quarter diesel demand remained rangebound in 2017 as opposed to when diesel demand grew strongly over the same period. However, diesel demand is expected to return to stronger growth this year (164kb/d). In April 2017, India introduced regulations for heavy diesel trucks and buses fuel efficiency standards. Heavy truck and buses make up 60% of gasoil demand. Regulations will be implemented in two phases with phase one to be implemented beginning in April 2018 and presents some downside risk to diesel demand growth.

U.S. Product market

The U.S. has continued on its path of becoming a product exporter. U.S. refinery capacity utilisation has increased every year since 2008, reaching an average of 92% last year. The majority of exports originate from the U.S. Gulf region which has now become the largest product exporter in the world.

Gasoil and Gasoline

Little to no refinery capacity additions in South America (40kb/d addition in Argentina in 2017) coupled with rising demand helped push U.S. product exports to South & Central America to grow by 15% over 2016, albeit from a small base. Exports were driven by the fire and subsequent shutdown of the 330kb/d Salina Cruz refinery in Mexico. As a result, the average outage for South and Central America Atlantic increased from 4kb/d in 2016 to 314kb/d in 2017. However, current year outages are expected to decrease this year with Salina Cruz returning to production albeit at half capacity. As a result, current year gasoil export growth to South and Central America is not expected to be as strong as 2017. Exports to Europe have remained broadly rangebound.

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Gasoline exports grew by 9% in 2017 over the preceding year. Similar to gasoil export drivers, gasoline exports to South and Central America increased in 2017. U.S. TM demand (basis LRs) to South and Central America rose by 105.3m TM to 204.5m TM last year.

Europe

Similar to the U.S., European refinery utilisation rates also increased in 2017 to 88% as increased demand from Latin America and West Africa supported production.

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Gasoil and Gasoline

After year on year increases in gasoil imports since 2014, imports were stable in 2017. Gasoil demand is expected to increase slightly this year (34kb/d). European gasoline exports increased 3.8% in 2017 over 2016 with the market share of each destination remaining broadly stable. As exports from U.S. led to reduced European exports to West Africa, European exports to the destination declined by 14% from an average of 316kt/month to 272kt/month. Domestic gasoline demand is expected to remain stable this year and return to its long term declining trend next year.

West-East Naphtha Movements

Atlantic Basin availability of naphtha increased due to an increase in U.S. Shale production, and some European refineries switching to ethane, this led to an excess of naphtha which was exported east. As a result

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West/East naphtha exports increased by 11.5% in 2017 to 1.2MT/month. The trend is expected to continue, particularly as a heavy maintenance schedule is expected in the Middle East this year, tightening MEG naphtha supply.

World Tanker Fleet

VLCC fleet growth remained elevated in 2017 at 5.9%, however slightly lower compared to 2016 (6.6%) as, despite higher deliveries, we also experienced an uptick in scrapping. In total, fifty VLCCs came into the market, making 2017 the highest year VLCC delivery year since 2011. The delivery schedule was front loaded with 29 vessels delivered in the first half of the year (First Quarter of 2017 17 VLCCs and Second Quarter of 2017 12 VLCCs) and 21 in the second half (Third Quarter of 2017 11 VLCCs and Fourth Quarter of 2017 10 VLCCs). Nine vessels were removed from the fleet, with eight scrapped in the second half of the year. Only two vessels from the 52 originally scheduled to be delivered in 2017 slipped into 2018—slippage in 2017 was at historical low levels of 4%, significantly lower than the 2009-2016 slippage average of 27.8%. 61 VLCCs are currently scheduled to come in the market in 2018, of which five have been delivered. Slippage is expected to be high this year as the market remains weak in part due to the oversupply of tonnage. Weak spot earnings, rising steel prices and rising costs for shipowners for the installation of the ballast water treatment system are expected to lead to higher removals from the fleet this year. However, scrapping is expected to accelerate towards the end of the decade as over 30 VLCCs are turning over the age of 20 each year after 2020, which along with the uncertainty regarding the impact of sulphur regulations on bunker fuel expected to come into force in January 2020, might make the decision for the owners a bit easier.

2017 proved to be a heavy year in terms of deliveries for Suezmaxes, with 49 vessels coming into the market. The ten removed vessels were not enough to offset the heavy deliveries, bringing the year’s fleet growth to 8.5%—the highest since 2011. Excluding 19 cancellations, slippage for 2017 was at 26%, lower than the 2009-2016 slippage average of 38.4%. Deliveries are expected to remain elevated this year, with 50 Suezmaxes

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scheduled to be delivered, out of which twelve have already delivered in January and February. However, with an expected increase in removals for the reasons mentioned above, we expect fleet growth to ease off at 4.8%.

Aframax (including fully coated LR2s) fleet growth in 2017 fell to 3.9% from 4.9% in 2016, following higher removals compared to the past couple years. In the beginning of the year, there were 82 Aframaxes scheduled to be delivered, of which 61 were delivered during the year, equating to a slippage rate of 25%. 47 of the total deliveries were fully coated (LR2s). Following high LR2 deliveries and only four removals, LR2 fleet growth surged to 14.8% in 2017, the highest level since 2010. A total of 72 Aframaxes were scheduled to be delivered in 2018, eleven of which have already delivered. Of the Aframaxes scheduled to be delivered in 2018, 31 are coated. After accounting for slippage and accelerating removals, Aframax fleet growth is expected to be lower this year at 3.1%, while LR2 fleet growth is estimated at 5.1%. In 2017, we saw 24 LR2s switching to trading Dirty Petroleum Products (DPP) from trading Clean Petroleum Products (CPP), offsetting somewhat the fleet pressure on the clean trading side.

Panamax (including fully coated LR1s) fleet growth declined slightly to 3.8% in 2017 compared to 4% in 2016 with 21 deliveries, 20 of which were fully coated (LR1) and five removals. One of the Panamaxes removed was over 30 years old, the average age of the total five Panamaxes removed from the fleet last year was 23.8 years old—the average age of the fleet now stands at 10.4 years old. Slippage for 2017 stood at 57%, at the start of the year 49 Panamaxes were scheduled to hit the water and 21 were delivered. A total of 23 Panamaxes, all of which are coated LR1s, are scheduled to come in the market in 2018, five of which have delivered in the first two months of this year. Slippage is expected to ease off this year with LR1 fleet growth estimated at 3.2% and Panamax fleet growth at 4.5%. Switching of fully coated trading capacity between CPP and DPP was not as pronounced as on the LR2s, with net dirtying-up to five vessels.

In 2017, MR fleet (45k-55k dwt) growth eased off to 3.2% compared to 6.3% in 2016, as only 55 MRs were added to the fleet, while 11 vessels with an average age of 26.4 years were removed from the fleet. The 2017 slippage rate for MR deliveries was slightly lower at 22% compared with the period 2009-2016, which had an average of 29.2%. MR fleet growth is expected to rise slightly this year to 3.6% as 67 MRs are scheduled to come to the market, eight MRs have already delivered in January and February this year. Five MRs of an average age of 23.2 years have been removed from the fleet this year with ten additional expected to be removed by the end of 2018.

A total of 26 Handymaxes (27k-45k dwt) delivered in 2017 from the originally 35 scheduled to be delivered, bringing the slippage rate to 25%—slightly lower than the 2009-2016 average of 29%. 17 vessels were scrapped in 2017 with an average age of 26.8 years, hence fleet growth stood at 1.2%. 2018 deliveries are standing even lower with 20 Handys scheduled to come into the market, including four already delivered. With nine Handys already removed from the fleet since the beginning of this year, scrapping is expected to be high this year as 57 vessels (6% of the total fleet) are currently over 25 years old.

Newbuildings

Conditions that kept ordering activity muted during 2016 persisted in 2017. Lower earnings, limited finance availability and uncertainty over the upcoming regulations (BWM, IMO2020) could have all weighted on ordering activity. However, historically low asset values led to an increase in orders, especially for VLCCs, Aframaxes and MRs leading to an uptick in newbuilding prices after the Second Quarter of 2017. VLCC newbuilding prices in South Korea fell marginally by $200,000 to $82.8m, although prices reached levels as low

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as $79.25m in April. Attractive newbuilding prices led to a surge in ordering activity with 59 VLCC orders being placed in 2017. 69% of the total orders were placed in the first half of the year, persistently low earnings and slightly higher asset values slowed demand for new tonnage. Of the 59 orders, 46 were placed in South Korea, followed by Japan (7 orders) and China (6 orders). Six VLCCs have already been ordered in the first two months of this year by three different owners.

Despite a $2m decline in Suezmax newbuilding price to $53m, Suezmax orders remained relatively unchanged compared to 2016 with 23 orders placed by the end 2017. 14 orders were placed in the first half of 2017, with no orders placed in the Third Quarter of 2017. Similarly to VLCCs, the majority of the new tonnage was ordered in South Korean yards (14 orders), followed by Chinese (5 orders) and Japanese (4 orders). So far this year there have been no Suezmax orders.

Aframax newbuilding prices in South Korea rose by $2m in 2017 to $44m by the end of 2017. Total Aframax (coated and uncoated) orders were 54 in 2017 compared to only 17 in 2016. 14 of the total Aframaxes orders last year are known to be coated (LR2s), however coated orders might end up being higher as we approach the delivery date and more information is revealed in terms of the vessels’ coating. In 2016, eight Panamax (coated and uncoated) orders were placed, with one of them being confirmed as coated (LR1). LR1 newbuilding prices in South Korea were unchanged YoY in January 2018 at $39m. The majority of both Aframaxes and Panamaxes have been ordered in China (21 Aframaxes and 5 Panamaxes). Between January and February 2018, two Aframax orders have been placed in South Korea.

MR newbuilding prices in South Korea also increased by $2m during 2017 to $34m by the end of 2017. Total MR orders rose to 62 compared to only 25 in 2016, however MRs have long passed their peak ordering activity when over 100 MRs were ordered each year during 2012 and 2013 as part of their eco-fleet renewal. The majority of MR orders were placed in South Korea (24 orders) followed by Vietnam (21 orders). For the first two months of 2018, 11 MR orders have been placed as MRs have started the year on a positive note in terms of earnings. Handymax ordering activity continued the downward trajectory of the past four years with only four vessels ordered, all of them at Chinese yards.

Expectations are that this year will prove to be the bottom of the market in terms of earnings, some support might be provided at the end of this year and in 2019 owners might start ordering in volume again as scrapping, especially of the older tonnage, is expected to take off by the end of the decade as the fleet starts to age. Moreover, high steel prices, along with the difficulty for the older tonnage to find employment in an oversupplied market, and the cost of ballast water treatment installation that is also hovering on owners’ balance sheets may create an environment of increased scrappings followed by increased orders for replacement of the fleet.

Second-hand Prices

VLCC second-hand prices rose by 10% YoY to $61m, Aframax prices increased by 11% to $30m, MR prices grew by 15% to $23m while LR1 prices remained unchanged at the $25m levels. Suezmaxes fell marginally by 1% YoY to $40m.

Vessel Earnings

The tanker markets continued to be bearish in 2017 across all sectors. Oversupply of tonnage, especially for the crude sector, where four VLCCs and four Suezmaxes were delivered each month, and higher oil prices that

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led to higher bunker costs which ate into owners’ earnings led to crude tanker rates revisiting the low levels of 2013, while product tanker rates also remained subdued. VLCC (basis TD3 round voyage) earnings fell 41% YoY to average $24,000/day in 2017 with earnings reaching levels as low as $8,000/day in September. Suezmax (basis TD20 round voyage) earnings declined by 48% YoY to $13,000/day while the Aframax Composite (basis an average of TD7, TD8, TD9, TD19 & TD17 round voyages) fell by 43% YoY to $12,000/day. Freight cost hit record low levels in 2017, reflecting the oversupply of vessels. In the products market, LR2 (basis TC1 round voyage) earnings fell by 31% YoY to $11,000/day, LR1 (basis TC5 round voyage) dropped by 41% YoY to $7,000/day while the MR Composite (basis an average of TC2/14, TC6, TC7, TC10 & TC11/4) declined by 14% YoY to $12,000/day. Freight cost for the LR routes was also at record low levels with TC1 averaging $15.75/tonne and TC5 at $17.71/tonne.

Oil prices and, as a result bunker prices, recovered last year, eating into owners’ earnings. Rotterdam IFO380 averaged at $302/tonne in 2017, $91/tonne higher YoY. Based on the latest EIA forecast Brent is expected to average $62.13/bbl and WTI at $58.17/bbl, maintaining support for firmer bunkers this year. With the oil market currently in backwardation, floating storage has almost evaporated as a vessel employment option, leading to an increase in the tonnage supply as more vessels become available for trading. However, as we come closer to 2020 when the new lower sulphur regulations for bunkers will come into force, high sulphur fuel oil (HSFO) demand is expected to fall significantly, leading to an increase in demand for storage.

VLCC Time Charter Equivalent Spot Market Earnings

VLCC

Despite a strong start to the year, VLCC earnings started falling after February 2017 to average the year at approximately $23,000/day (basis TD3 MEG/Japan round voyage). The heavy delivery schedule started to take

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its toll on earnings that, combined with higher bunker prices, hit levels last seen in 2013. VLCC earnings averaged approximately $32,000/day in First Quarter of 2017, marking the lowest First Quarter since 2013. Earnings eased off further as the year progressed with Second Quarter of 2017 averaging at $23,000/day and Third Quarter of 2017 at $14,000/day. The much-anticipated winter market fell short of owners’ expectations as the traditionally stronger Fourth Quarter provided some support to earnings that rose to $24,000/day. Fifty VLCCs coming into the market along with the extension of the production cut deal distorted the demand/supply balance in the VLCC market leading to the lowest $/tonne paid since 2002 as freight cost averaged approximately $8.90/tonne. VLCC earnings had a disappointing start to this year with earnings well below OPEX levels at currently approximately $5,000/day (basis TD3C MEG/China round voyage). With OPEC extending its production cuts through the end of the year and fleet growth remaining resilient, we are unlikely to see any significant recovery in rates in the near-term. However, expectations on higher scrapping, increased U.S. production, rising Chinese import requirements amid higher crude import quotas granted by the government this year might help the market recover by the end of this year or the beginning of 2019.

Suezmax Time Charter Equivalent Spot Market Earnings

Suezmax

Suezmax earnings in 2017 were similar to VLCCs, with TD6 (Black Sea/Med) averaging 47% lower YoY at approximately $13,500/day and TD20 (WAF/UKC) 46% lower YoY at $13,000/day. Following the OPEC/non-OPEC market management deal, higher Dubai prices increased demand for (Brent priced) West African crudes last year, with WAF crude exports to Asia-Pacific rising by 20% YoY to 1.48m bpd. Nigerian production returned last year, with output rising by 220k bpd YoY to 1.61m bpd in December, while Angolan output fell by 50k bpd YoY to 1.59m bpd as part of the OPEC cut deal. However, Suezmaxes in West Africa did not manage to

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benefit from the increased eastbound volumes as the majority ended up in VLCCs that increased their WAF market share to 49% from 42% in 2016. With 13 vessels coming into the market in the First Quarter of 2017, earnings averaged at $19,000/day for TD6 and $18,000/day for TD20. Despite the return of Forcados in May, earnings edged further down in the Second Quarter to $12,500/day to sink at $7,750/day (TD6) and $8,750/day (TD20) in the Third Quarter. Pipeline leakages in July affected loadings of Bonny Light, however production remained unaffected with August output at 1.66m bpd, the highest level since March 2016. Earnings recovered somewhat in the Fourth Quarter of 2017, driven by the seasonally stronger winter market and an ease in deliveries, with TD6 averaging $14,250/day and TD20 $13,500/day. In terms of $/tonne, both routes hit the lowest levels on record, with TD6 averaging $5.66/tonne and TD20 $9.12/tonne. 2018 to date, TD6 averaged $4,000/day and T20 $5,750/day. Despite some recovery in rates during March, fundamentals remain bearish.

Aframax Time Charter Equivalent Spot Market Earnings

Aframax

The Aframax Composite earnings (basis an average of TD7, TD8, TD9, TD11, TD14 and TD17) were subdued in 2017 with average composite earnings 42% lower YoY at $12,000/day. The Aframax market was affected by the weakness in the VLCC and Suezmax markets as well as the clean LR2 market that remained subdued throughout the year, which led to 24 LR2s dirtying up in 2017. The Aframax composite fell by 43% YoY in the First Quarter of 2017 to average $16,000/day with TD17 (Baltic/UKC) only providing some support with average First Quarter of 2017 earnings at $23,750/day. The Aframax Composite dropped further in the Second Quarter of 2017 to $11,250/day with TD14 (SE Asia/EC Australia) the only Aframax route earning over $10,000/day in June. Following the weakness in the larger crude tanker sectors in the Third Quarter of 2017, the Aframax Composite edged lower to $7,500/day with the Med market (TD19) earning approximately $2,000/day

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in August. Driven by a stronger October, the Aframax Composite rose slightly in the Fourth Quarter of 2017 to $11,750/day, however December’s weakness in most of the routes weighed down the sector. The return of Libya to the market has not translated into higher earnings so far due to its unsustainability while Aframaxes have been increasingly feeling the pressure from Suezmaxes in certain regions, such as the Black Sea. The Aframax Composite remains subdued so far this year, with the majority of the routes trading below $10,000/day. On the other hand, the clean LR2 market has started the year on a positive note with TC1 currently trading at $16,500/day.

MR Time Charter Equivalent Spot Market Earnings

MR

The MR Composite (basis an average of TC6, TC7, TC10, TC11/4 and TC2/14) posted losses of approximately $2,000/day YoY to average $12,000/day, however earnings were at their historical averages since 2009. MRs in the Far East had a better second half of 2017 ($13,750/day) compared to the first half of 2017 ($11,500/day) and managed to outperform the Atlantic markets on average. In January 2017, the Chinese government decided to keep product export quotas equal to the actual volumes exported in 2016 (38.2m tonnes). Most refineries reached their quota by the end of the Third Quarter of 2017/beginning of the Fourth Quarter of 2017, which caused a 15% YoY fall in product exports over the September to October period. However, in November, Beijing issued 5m tonnes of additional quotas in a fifth round, pushing the total quotas for the year to 43m tonnes, 12.6% higher than 2016. The additional quotas along with strong margins in the region led to higher refinery runs and consequently higher product exports. In addition, China’s ban on the use of >10ppm diesel aided stockdrawing and pushed up exports of higher sulphur grades. The West of Suez MR market (basis TC2/14) performed better in the first half of 2017 ($13,000/day) compared to the second half of 2017 ($9,750/day). Hurricane Harvey shutdown 2.4m bpd of refining capacity, in addition to which port infrastructure

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and pipelines remained offline in the USG for a prolong period of time between August and September, pushing TC2 to record high levels of $24,000/day amid increased demand for gasoline and gasoil in the U.S. However rates eased off quickly due to oversupply of tonnage in the region followed the spike in the UKC/USG trade. Following refinery shutdowns in the USG, U.S. distillates exports to Europe fell to 136k bpd in September with TC14 generating negative TCEs between September and October. The long-awaited products market recovery appears to be underway, with stocks in most major consuming regions at or below their 5-year averages and the fleet set to slow this year (2.8%). Following stronger earnings in late 2017, the MR Composite started the year on a positive note. Since then the market has come off slightly, however it remains at relatively healthy levels of approximately $13,000/day.

Risk Factors

Risks Related To Our Industry

The tanker industry is cyclical, resulting in charter rates that can be volatile. Poor charter markets for crude oil carriers and product tankers may adversely affect our future revenues and earnings.

The volatility in charter rates, and in turn our revenue and earnings, is due to the historically cyclical nature of the tanker industry. The typical cycle is partly created by material changes in the number of tankers available in the market resulting primarily from new deliveries to the market less vessels demolished or converted due to technical obsolescence and the number of vessels occupied on long-distance travel or delayed by geopolitical events. The cycle is also impacted by material changes to the supply of and demand for oil due primarily to corrections in the price of oil and to geopolitical factors. As of April 20, 2018, about half of the vessels owned by our subsidiary companies were employed under charters based upon prevailing market rates (including time charters with a profit share component), and the remaining vessels were employed on time charters which, if not extended, are scheduled to expire on various dates between April 2018 and June 2028. Tanker charter rates declined significantly in 2016 and further declined in 2017, which had an adverse effect on our revenues, profitability and cash flows. If rates continue to be low in the charter market for any significant period in 2018, it will have a further adverse effect on our revenues, profitability and cash flows. Declines in prevailing charter rates also affect the value of our vessels, which are correlated to the trends of charter rates, and could affect our ability to comply with our loan covenants.

Disruptions in world financial markets and the resulting governmental action in the United States and in other parts of the world could have a material adverse impact on our results of operations, financial condition, cash flows and share price.

Global financial markets and economic conditions have been disrupted and volatile in recent years and remain subject to significant vulnerabilities, such as the deterioration of fiscal balances and the rapid accumulation of public debt, continued deleveraging in the banking sector and a limited supply of credit. While the global economy may be improving, it remains subject to downside risk. There can be no assurance that global economic weakness or a recession will not return and that tight credit markets will not continue or become more severe.

In addition, the process of the UK to exit the European Union, as well as continued turmoil and hostilities in the Middle East or potential hostilities elsewhere in the world, could contribute to volatility in the global financial markets. These circumstances, along with the re-pricing of credit risk and the reduced participation of certain financial institutions from financing of the shipping industry, will likely continue to affect the availability, cost and terms of vessel financing. If financing is not available to us when it is needed, or is available only on unfavorable terms, our business may be adversely affected, with corresponding effects on our profitability, cash flows and ability to pay dividends.

Moreover, as a result of the continuing economic crisis in Greece and the related austerity measures implemented by the Greek government, as well as the capital controls in effect in Greece since mid-2015, our

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operations may be subjected to new regulations that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Greek government new taxes or other fees or that dividends we pay be subject to withholding taxes. Furthermore, the commitments by the Greek government to the nations’ creditors and potential shift in its policies may potentially lead to Greece’s exit from the Eurozone, if not satisfied, which could affect our technical and commercial managers’ operations located in Greece.

The implementation by the U.S. or other governments of protectionist trade measures, including tariffs or other trade restrictions, could also adversely affect the world oil and petroleum markets.

The tanker industry is highly dependent upon the crude oil and petroleum products industries.

The employment of our subsidiaries’ vessels is driven by the availability of and demand for crude oil and petroleum products, the availability of modern tanker capacity and the scrapping, conversion or loss of older vessels. Historically, the world oil and petroleum markets have been volatile and cyclical as a result of the many conditions and events that affect the supply, price, production and transport of oil, including:

Despite turbulence in the world economy in recent years, worldwide demand for oil and oil products continues to rise. In the event that this trend falters, the production of and demand for crude oil and petroleum products will again encounter pressure which could lead to a decrease in shipments of these products and consequently this would have an adverse impact on the employment of our vessels and the charter rates that they command. Also, if oil prices remain at uneconomic levels for producers, it may lead to declining output. As a result of any reduction in demand or output, the charter rates that we earn from our vessels employed on charters related to market rates may decline and possibly remain at low levels for a prolonged period of time.

Our operating results are subject to seasonal fluctuations.

The tankers owned by our subsidiary companies operate in markets that have historically exhibited seasonal variations in tanker demand, which may result in variability in our results of operations on a quarter-by-quarter basis. Tanker markets are typically stronger in the winter months as a result of increased oil consumption in the northern hemisphere, but weaker in the summer months as a result of lower oil consumption in the northern

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hemisphere and refinery maintenance. As a result, revenues generated by the tankers in our fleet have historically been weaker during the fiscal quarters ended June 30 and September 30. However, there may be periods in the northern hemisphere when the expected seasonal strength does not materialize to the extent required to support sustainable profitable rates due to tanker overcapacity.

An increase in the supply of vessels without an increase in demand for such vessels could cause charter rates to decline, which could have a material adverse effect on our revenues and profitability.

Historically, the marine transportation industry has been cyclical. The profitability and asset values of companies in the industry have fluctuated based on certain factors, including changes in the supply and demand of vessels. The supply of vessels generally increases with deliveries of new vessels and decreases with the scrapping of older vessels and/or the removal of vessels from the competitive fleet either for storage purposes or for utilization in offshore projects. The newbuilding order book equaled approximately 10% of the existing world tanker fleet at February 1, 2018, by number of vessels, with a significant amount of these newbuilding vessels scheduled to be delivered in 2018. No assurance can be given that the order book will not increase further in proportion to the existing fleet. If supply increases, and demand does not match that increase, the charter rates for our vessels could decline significantly. In addition, any decline of trade on specific long-haul trade routes will effectively increase available capacity with a detrimental impact on rates. A decline in, or prolonged period of, already weak charter rates could have a material adverse effect on our revenues and profitability.

The global tanker industry is highly competitive.

We operate our fleet in a highly competitive market. Our competitors include owners of VLCC, suezmax, aframax, panamax, handymax and handysize tankers, as well as owners in the shuttle tanker and LNG markets, which are other independent tanker companies, as well as national and independent oil companies, some of which have greater financial strength and capital resources than we do. Competition in the tanker industry is intense and depends on price, location, size, age, condition, and the acceptability of the available tankers and their operators to potential charterers.

Acts of piracy on ocean-going vessels, although recently declining in frequency, could still adversely affect our business.

Despite a decline in the frequency of pirate attacks on seagoing vessels in the western part of the Indian Ocean, such attacks remain prevalent off the west coast of Africa and between Malaysia and Indonesia. If piracy attacks result in regions in which our vessels are deployed being characterized by insurers as “war risk” zones, as the Gulf of Aden has been, or Joint War Committee (JWC) “war and strikes” listed areas, premiums payable for such insurance coverage could increase significantly and such insurance coverage may be more difficult to obtain. Crew costs, including those due to employing onboard security guards, could increase in such circumstances. In addition, while we believe the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released. A charterer may also claim that a vessel seized by pirates was not “on-hire” for a certain number of days and it is therefore entitled to cancel the charter party, a claim that we would dispute. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition, results of operations and cash flows.

Terrorist attacks, international hostilities, economic and trade sanctions and the economic situation in the Eurozone can affect the tanker industry, which could adversely affect our business.

Major oil and gas producing countries in the Middle East have become involved militarily in the widening conflicts in Iraq, Syria and Yemen. Armed conflicts with insurgents and others continue, as well, in Libya, another major oil exporting country. Any of these hostilities could seriously disrupt the production of oil or LNG

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and endanger their export by vessel or pipeline, which could put our vessels at serious risk and impact our operations and our revenues, expenses, profitability and cash flows in varying ways that we cannot now project with any certainty.

The increasing number of terrorist attacks throughout the world, longer-lasting wars, international incidents or international hostilities, such as in the Ukraine, Afghanistan, Iraq, Syria, Libya, Yemen and the Korean peninsula, could damage the world economy and adversely affect the availability of and demand for crude oil and petroleum products and negatively affect our investment and our customers’ investment decisions over an extended period of time. In addition, sanctions against oil exporting countries such as Iran, Sudan, Syria and Russia may also impact the availability of crude oil which would increase the availability of tankers, thereby negatively impacting charter rates. We conduct our vessel operations internationally and despite undertaking various security measures, our vessels may become subject to terrorist acts and other acts of hostility like piracy, either at port or at sea. Such actions could adversely impact our overall business, financial condition and results of operations. In addition, terrorist acts and regional hostilities around the world in recent years have led to increases in our insurance premium rates and the implementation of special “war risk” premiums for certain trading routes.

Our charterers may direct one of our vessels to call on ports located in countries that are subject to restrictions imposed by the U.S. government, the UN or the EU, which could negatively affect the trading price of our common shares.

On charterers’ instructions, our subsidiaries’ vessels may be requested to call on ports located in countries subject to sanctions and embargoes imposed by the U.S. government, the UN or the EU and countries identified by the U.S. government, the UN or the EU as state sponsors of terrorism. The U.S., UN- and EU- sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time.

On January 16, 2016, “Implementation Day” for the Iran Joint Comprehensive Plan of Action (JCPOA), the United States lifted its secondary sanctions against Iran which prohibited certain conduct by non-U.S. companies and individuals that occurred entirely outside of U.S. jurisdiction involving specified industry sectors in Iran, including the energy, petrochemical, automotive, financial, banking, mining, shipbuilding and shipping sectors. By lifting the secondary sanctions against Iran, the U.S. government effectively removed U.S. imposed restraints on dealings by non-U.S. companies, such as our Company, and individuals with these formerly targeted Iranian business sectors. Non-U.S. companies continue to be prohibited under U.S. sanctions from (i) knowingly engaging in conduct that seeks to evade U.S. restrictions on transactions or dealings with Iran or that causes the export of goods or services from the United States to Iran, (ii) exporting, reexporting or transferring to Iran any goods, technology, or services originally exported from the U.S. and / or subject to U.S. export jurisdiction and (iii) conducting transactions with the Iranian or Iran-related individuals and entities that remain or are placed in the future on OFAC’s list of Specially Designated Nationals and Blocked Persons (SDN List), notwithstanding the lifting of secondary sanctions.

However, there is significant uncertainty regarding the future of the JCPOA. The U.S. has the ability to reimpose sanctions against Iran if, in the future, Iran does not comply with its obligations under the nuclear agreement. In January 2018, President Trump executed necessary waivers with respect to the JCPOA required by the Iran Nuclear Agreement Review Act in order to continue the United States’ nuclear sanctions relief to Iran provided by the JCPOA, but in a statement he indicated that he will not again waive sanctions unless the JCPOA is amended.

The U.S. government’s primary Iran sanctions remain largely unchanged after Implementation Day and, as a consequence, U.S. persons continue to be broadly prohibited from engaging in transactions or dealings in or with Iran or its government. These sanctions broadly restrict U.S. persons from engaging in transactions or dealings

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with the Government of Iran and Iranian financial institutions, which effectively impacts the transfer of funds to, from, or through the U.S. financial system whether denominated in US dollars or any other currency.

As a result of the lifting of the U.S. secondary sanctions (and relevant EU sanctions) relating to Iran, it is possible that one of our charterers may attempt to direct one of our vessels to carry cargoes to or from Iran, without our approval. If the charterer succeeded in avoiding our controls to prevent such action, this could have various effects on us, such as affecting our reputation and our relationships with our investors and financing sources, affecting the cost of our insurance with respect to such voyages, and potentially increase our exposure to foreign currency fluctuations. Investor perception of the value of our shares may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

The U.S. also maintains embargoes on Cuba, North Korea and Syria. We can anticipate that some of our charterers may request our vessels to call on ports located in these countries. Although we believe that we are in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines or other penalties and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. Additionally, some investors may decide to divest their interest, or not to invest, in us simply because we do business with companies that do lawful business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation.

Failure to comply with the U.S. Foreign Corrupt Practices Act and other anti-bribery legislation in other jurisdictions could result in fines, criminal penalties, contract terminations and an adverse effect on our business.

We may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the “FCPA”. We are subject, however, to the risk that persons and entities whom we engage or their agents may take actions that are determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, or curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

Efforts to take advantage of opportunities in pursuit of our growth strategy may result in financial or commercial difficulties.

A key strategy of management is to continue to renew and grow the fleet by pursuing the acquisition of additional vessels or fleets or companies that are complementary to our existing operations. If we seek to expand through acquisitions, we face numerous challenges, including:

We cannot assure you that we will be able to integrate successfully the operations, personnel, services or vessels that we might acquire in the future, and our failure to do so could adversely affect our profitability.

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We are subject to regulation and liability under environmental, health and safety laws that could require significant expenditures and affect our cash flows and net income.

Our business and the operation of our subsidiaries’ vessels are subject to extensive international, national and local environmental and health and safety laws and regulations in the jurisdictions in which our vessels operate, as well as in the country or countries of their registration. In addition, major oil companies chartering our vessels impose, from time to time, their own environmental and health and safety requirements. To comply with these requirements and regulations, including the new MARPOL Annex VI sulfur emission requirements instituting a global 0.5% sulfur cap on marine fuels from January 1, 2020 and the IMO ballast water management (“BWM”) convention, which requires vessels to install expensive ballast water treatment systems (“BWTS”) before the first MARPOL renewal survey conducted after September 8, 2019, for newly constructed vessels after September 8, 2017 to have a BWTS installed by delivery and for all vessels to be certified in accordance with the BWM convention by September 8, 2024, we may be required to incur additional costs to meet new maintenance and inspection requirements, develop contingency plans for potential spills, and obtain insurance coverage.

These and future environmental regulations, which may become stricter, may limit our ability to do business, increase our operating costs and/or force the early retirement of our vessels, all of which could have a material adverse effect on our financial condition and results of operations.

International, national and local laws imposing liability for oil spills are also becoming increasingly stringent. Some impose joint, several, and in some cases, unlimited liability on owners, operators and charterers regardless of fault. We could be held liable as an owner, operator or charterer under these laws. In addition, under certain circumstances, we could also be held accountable under these laws for the acts or omissions of Tsakos Shipping & Trading S.A. (“Tsakos Shipping”), Tsakos Columbia Shipmanagement Ltd. (“TCM”) or Tsakos Energy Management Limited (“Tsakos Energy Management”), companies that provide technical and commercial management services for our subsidiaries’ vessels and us, or others in the management or operation of our subsidiaries’ vessels. Although we currently maintain, and plan to continue to maintain, for each of our subsidiaries’ vessels’ pollution liability coverage in the amount of $1 billion per incident (the maximum amount available), liability for a catastrophic spill could exceed the insurance coverage we have available and result in our having to liquidate assets to pay claims. In addition, we may be required to contribute to funds established by regulatory authorities for the compensation of oil pollution damage or provide financial assurances for oil spill liability to regulatory authorities.

Maritime disasters and other operational risks may adversely impact our reputation, financial condition and results of operations.

The operation of ocean-going vessels has an inherent risk of maritime disaster and/or accident, environmental mishaps, cargo and property losses or damage and business interruptions caused by, among others:

Any of these circumstances could adversely affect our operations, result in loss of revenues or increased costs and adversely affect our profitability and our ability to perform our charters.

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Our subsidiaries’ vessels could be arrested at the request of third parties.

Under general maritime law in many jurisdictions, crew members, tort claimants, vessel mortgagees, suppliers of goods and services and other claimants may lien a vessel for unsatisfied debts, claims or damages. In many jurisdictions a maritime lien holder may enforce its lien by arresting a vessel through court process. In some jurisdictions, under the extended sister ship theory of liability, a claimant may arrest not only the vessel with respect to which the claimant’s maritime lien has arisen, but also any associated vessel under common ownership or control. While in some jurisdictions which have adopted this doctrine, liability for damages is limited in scope and would only extend to a company and its ship-owning subsidiaries, we cannot assure you that liability for damages caused by some other vessel determined to be under common ownership or control with our subsidiaries’ vessels would not be asserted against us.

Risks Related To Our Business

Any significant future declines in the values of our vessels could affect our ability to comply with various covenants in our credit facilities unless waived or modified by our lenders.

Our credit facilities, which are secured by mortgages on our subsidiaries’ vessels, require us to maintain specified collateral coverage ratios and satisfy financial covenants, including requirements based on the market value of our vessels, such as maximum corporate leverage levels. The appraised value of a ship fluctuates depending on a variety of factors including the age of the ship, its hull configuration, prevailing charter market conditions, supply and demand balance for ships and new and pending legislation. The oversupply of tankers and depressed tanker charter market adversely affected tanker values from the middle of 2008 to late 2013, and despite the young age of our subsidiaries’ fleet and extensive long-term charter employment on many of the vessels, resulted in a significant decline in the charter-free values of our vessels. Vessel values recovered from the end of 2013, but again declined during 2016 and 2017 due primarily to global fleet overcapacity and lack of financing for potential buyers to acquire second-hand, charter free vessels. Values may remain at current levels for a prolonged period, further decline or rise. Low values may result in our inability to comply with the financial covenants under our credit facilities which relate to our consolidated leverage and loan-to-asset value collateral requirements. If we were unable to obtain waivers in case of non-compliance or post additional collateral or prepay principal in the case of loan-to-asset value requirements, our lenders could accelerate our indebtedness. We have paid all of our scheduled loan installments and related loan interest consistently without delay or omission and none of our lenders under our credit facilities has requested such prepayment or additional cash collateral where non-compliance has occurred.

Charters at attractive rates may not be available when our current time charters expire.

During 2017, we derived approximately 63% of our revenues from time charters, as compared to 52% in 2016. As our current period charters on fourteen of the vessels owned by our subsidiary companies expire in the remainder of 2018, it may not be possible to re-charter these vessels on a period basis at attractive rates if the current softness in the tanker charter market continues. If attractive period charter opportunities are not available, we may seek to charter the vessels owned by our subsidiary companies on the spot market, which is subject to significant fluctuations. In the event a vessel owned by one of our subsidiary companies may not find employment at economically viable rates, management may opt to lay up the vessel until such time that rates become attractive again (an action which our subsidiary companies have never undertaken). During the period of any layup, the vessel would continue to incur expenditures such as debt service, insurance, reduced crew wages and maintenance costs.

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We are dependent on the ability and willingness of our charterers to honor their commitments to us for substantially all of our revenues and the failure of our counterparties to meet their obligations under our charter agreements could cause us to suffer losses or otherwise adversely affect our business.

We derive substantially all of our revenues from the payment of charter hire by our charterers. 46 of our 64 vessels are currently employed under time charters including time charters with profit share. We could lose a charterer or the benefits of a time charter if:

If we lose a time charter, we may be unable to re-deploy the related vessel on terms as favorable to us or at all. We would not receive any revenues from such a vessel while it remained unchartered, but we may be required to pay expenses necessary to maintain the vessel in proper operating condition, insure it and service any indebtedness secured by such vessel.

If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, as part of a court-led restructuring or otherwise, we could sustain significant reductions in revenue and earnings which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as our ability to pay dividends, if any, in the future, and comply with the covenants in our credit facilities.

If our exposure to the spot market increases, our revenues could suffer and our expenses could increase.

The spot market for crude oil and petroleum product tankers is highly competitive. Beginning in 2016, we modified our chartering strategy to place more of our subsidiaries’ vessels on time-charter. As of April 20, 2018, 18 of the vessels owned by our subsidiary companies were employed under spot charters. If we were to increase participation in the spot market, we may experience a lower overall utilization of our fleet through waiting time or ballast voyages, leading to a decline in operating revenue. Moreover, to the extent our vessels are employed in the spot market, both our revenue from vessels and our operating costs, specifically our voyage expenses, will be significantly impacted by adverse movements in the cost of bunkers (fuel). See “—Fuel prices may adversely affect our profits.” Unlike time charters in which the charterer bears all of the bunker costs, in spot market voyages we bear the bunker charges as part of our voyage costs. As a result, while historical movements in bunker charges are factored into the prospective freight rates for spot market voyages periodically announced by World Scale Association (London) Limited and similar organizations, increases in bunker charges in any given period could have a material adverse effect on our cash flow and results of operations for the period in which the increase occurs. In addition, to the extent we employ our vessels pursuant to contracts of affreightment or under pooling arrangements, the rates that we earn from the charterers under those contracts may be subject to reduction based on market conditions, which could lead to a decline in our operating revenue.

We depend on Tsakos Energy Management, Tsakos Shipping and TCM to manage our business.

We do not have the employee infrastructure to manage our operations and have no physical assets. In common with industry practice, our subsidiaries own the vessels in the fleet and any contracts to construct newbuildings. We have engaged Tsakos Energy Management to perform all of our executive and management functions. Tsakos Energy Management employees directly provide us with financial, accounting and other back-office services, including acting as our liaison with the New York Stock Exchange and the Bermuda Monetary

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Authority. Tsakos Energy Management, in turn, oversees and subcontracts part of commercial management (including treasury, chartering and vessel purchase and sale functions) to Tsakos Shipping, and day-to-day fleet technical management, such as vessel operations, repairs, supplies and crewing, to TCM. As a result, we depend upon the continued services provided by Tsakos Energy Management and Tsakos Energy Management depends on the continued services provided by Tsakos Shipping and TCM.

We derive significant benefits from our relationship with Tsakos Energy Management and its affiliated companies, including purchasing discounts to which we otherwise would not have access. We would be materially adversely affected if any of Tsakos Energy Management, Tsakos Shipping or TCM becomes unable or unwilling to continue providing services for our benefit at the level of quality they have provided such services in the past and at comparable costs as they have charged in the past. If we were required to employ a ship management company other than Tsakos Energy Management, Tsakos Shipping or TCM, we cannot offer any assurances that the terms of such management agreements would be on terms as favorable to the Company in the long term.

Tsakos Energy Management, Tsakos Shipping and TCM are privately held companies and there is little or no publicly available information about them.

The ability of Tsakos Energy Management, Tsakos Shipping and TCM to continue providing services for our and our subsidiaries’ benefit will depend in part on their own financial strength. Circumstances beyond our control could impair their financial strength and, because each of these companies is privately held, it is unlikely that information about their financial strength would become public. Any such problems affecting these organizations could have a material adverse effect on us.

Tsakos Energy Management has the right to terminate its management agreement with us and Tsakos Shipping and TCM have the right to terminate their respective contracts with Tsakos Energy Management.

Tsakos Energy Management may terminate its management agreement with us at any time upon one year’s notice. In addition, if even one director were to be elected to our board without having been recommended by our existing board, Tsakos Energy Management would have the right to terminate the management agreement on 10 days’ notice. If Tsakos Energy Management terminates the agreement for this reason, we would be obligated to pay Tsakos Energy Management the present discounted value of all payments that would have otherwise become due under the management agreement until June 30 in the tenth year following the date of the termination plus the average of the incentive awards previously paid to Tsakos Energy Management multiplied by 10. A termination as of December 31, 2017 would have resulted in a payment of approximately $160.7 million. Tsakos Energy Management’s contracts with Tsakos Shipping and with TCM may be terminated by either party upon six months’ notice and would terminate automatically upon termination of our management agreement with Tsakos Energy Management.

Our ability to pursue legal remedies against Tsakos Energy Management, Tsakos Shipping and TCM is very limited.

In the event Tsakos Energy Management breaches its management agreement with us, we or our subsidiaries could bring a lawsuit against it. However, because neither we nor they are ourselves party to a contract with Tsakos Shipping or TCM, it may be difficult to sue Tsakos Shipping and TCM for breach of their obligations under their contracts with Tsakos Energy Management, and Tsakos Energy Management may have no incentive to sue Tsakos Shipping and TCM. Tsakos Energy Management is a company with no substantial assets and no income other than the income it derives under the management agreement with us. Therefore, it is unlikely that we or our subsidiaries would be able to obtain any meaningful recovery if we or they were to sue Tsakos Energy Management, Tsakos Shipping or TCM on contractual grounds.

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Tsakos Shipping provides chartering services to other tankers and TCM manages other tankers and could experience conflicts of interests in performing obligations owed to us and the operators of other tankers.

In addition to the vessels that it manages for our fleet, TCM technically manages a fleet of privately owned vessels and wishes to acquire third-party clients. These vessels are operated by the same group of TCM employees that manage our vessels, and we are advised that its employees manage these vessels on an “ownership neutral” basis; that is, without regard to who owns them. It is not impossible that Tsakos Shipping, which provides chartering services for nearly all vessels technically managed by TCM, might allocate charter or spot opportunities to other TCM managed vessels when our subsidiaries’ vessels are unemployed. It is also possible that TCM could in the future agree to manage more tankers that might directly compete with the fleet.

Clients of Tsakos Shipping have acquired and may acquire additional vessels that may compete with our fleet.

Tsakos Shipping and we have an arrangement whereby it affords us a right of first refusal on any opportunity to purchase a tanker which is 10 years of age or younger or contract to construct a tanker that is referred to or developed by Tsakos Shipping. Were we to decline any opportunity offered to us, or if we do not have the resources or desire to accept it, other clients of Tsakos Shipping might decide to accept the opportunity. In this context, Tsakos Shipping clients have in the past acquired modern tankers and have ordered the construction of vessels. They may acquire or order tankers in the future, which, if we decline to buy from them, could be entered into charters in competition with our vessels. These charters and future charters of tankers by Tsakos Shipping could result in conflicts of interest between their own interests and their obligations to us.

Our chief executive officer has affiliations with Tsakos Energy Management, Tsakos Shipping and TCM which could create conflicts of interest.

Nikolas Tsakos is the president, chief executive officer and a director of our company and the director and sole shareholder of Tsakos Energy Management. Nikolas Tsakos is also the son of the founder of Tsakos Shipping. These responsibilities and relationships could create conflicts of interest that could result in our losing revenue or business opportunities or increase our expenses.

Our commercial arrangements with Tsakos Energy Management and Argosy may not always remain on a competitive basis.

We pay Tsakos Energy Management a management fee for its services pursuant to our management agreement. We also place our hull and machinery insurance, increased value insurance and loss of hire insurance through Argosy Insurance Company, Guernsey, a captive insurance company affiliated with Tsakos interests. We believe that the management fees that we pay Tsakos Energy Management compare favorably with management compensation and related costs reported by other publicly traded shipping companies and that our arrangements with Argosy are structured at arm’s-length market rates. Our board reviews publicly available data periodically in order to confirm this. However, we cannot assure you that the fees charged to us are or will continue to be as favorable to us as those we could negotiate with third parties and our board could determine to continue transacting business with Tsakos Energy Management and Argosy even if less expensive alternatives were available from third parties.

We depend on our key personnel.

Our future success depends particularly on the continued service of Nikolas Tsakos, our president and chief executive officer and the sole shareholder of Tsakos Energy Management. The loss of Mr. Tsakos’s services or the services of any of our key personnel could have a material adverse effect on our business. We do not maintain key man life insurance on any of our executive officers.

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Because the market value of our vessels may fluctuate significantly, we may incur impairment charges or losses when we sell vessels which may adversely affect our earnings.

The fair market value of tankers may increase or decrease depending on any of the following:

The global economic downturn that commenced in 2008 resulted in a decrease in vessel values. Since then valuations have fluctuated, falling whenever there was excess fleet capacity and falling freight rates, as in 2013, and recovering when tanker market conditions improved as in 2015. Valuations declined again in 2016 and remained low through 2017 and going into 2018. In addition, although our subsidiaries currently own a modern fleet, with an average age of 7.5 years as of April 20, 2018, as vessels grow older, they generally decline in value.

We have a policy of considering the disposal of tankers periodically. If our subsidiaries’ tankers are sold at a time when tanker prices have fallen, the sale may be at less than the vessel’s carrying value on our financial statements, with the result that we will incur a loss, such as we did in the fourth quarter of 2017 with respect to two of our older tankers.

In addition, accounting pronouncements require that we periodically review long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment charge for an asset held for use should be recognized when the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount. Measurement of the impairment charge is based on the fair value of the asset as provided by third parties. Such reviews may from time to time result in asset write-downs, which could adversely affect our results of operations.

If TCM is unable to attract and retain skilled crew members, our reputation and ability to operate safely and efficiently may be harmed.

Our continued success depends in significant part on the continued services of the officers and seamen whom TCM provides to crew the vessels owned by our subsidiary companies. The market for qualified, experienced officers and seamen is extremely competitive and has grown more so in recent periods as a result of the growth in world economies and other employment opportunities. Although TCM has a contract with a number of manning agencies and sponsors various marine academies in the Philippines, Greece and Russia, we cannot assure you that TCM will be successful in its efforts to recruit and retain properly skilled personnel at commercially reasonable salaries. Any failure to do so could adversely affect our ability to operate cost-effectively and our ability to increase the size of the fleet.

Labor interruptions could disrupt our operations.

Substantially all of the seafarers and land based employees of TCM are covered by industry-wide collective bargaining agreements that set basic standards. We cannot assure you that these agreements will prevent labor

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interruptions. In addition, like many other vessels internationally, some of our subsidiaries’ vessels operate under so-called “flags of convenience” and may be vulnerable to unionization efforts by the International Transport Federation and other similar seafarer organizations which could be disruptive to our operations. Any labor interruption or unionization effort which is disruptive to our operations could harm our financial performance.

Contracts for any newbuildings we may order present certain economic and other risks.

As of April 20, 2018, the delivery of the last newbuilding we had on order was made in October 2017. However, our subsidiaries may order additional newbuildings. During the course of construction of a vessel, we are typically required to make progress payments. While we typically have refund guarantees from banks to cover defaults by the shipyards and our construction contracts would be saleable in the event of our payment default, we can still incur economic losses in the event that we or the shipyards are unable to perform our respective obligations. Shipyards may periodically experience financial difficulties.

Delays in the delivery of any newbuilding or secondhand vessels our subsidiaries may agree to acquire, could delay our receipt of revenues generated by these vessels and, to the extent we have arranged charter employment for these vessels, could possibly result in the cancellation of those charters, and therefore adversely affect our anticipated results of operations. The delivery of newbuilding vessels could be delayed because of, among other things: work stoppages or other labor disturbances; bankruptcy or other financial crisis of the shipyard building the vessel; hostilities or political or economic disturbances in the countries where the vessels are being built, including any escalation of tensions involving North Korea; weather interference or catastrophic events, such as a major earthquake, tsunami or fire; our requests for changes to the original vessel specifications; requests from our customers, with whom our commercial managers arrange charters for such vessels, to delay construction and delivery of such vessels due to weak economic conditions and shipping demand or a dispute with the shipyard building the vessel.

Credit conditions internationally might impact our ability to raise debt financing.

Global financial markets and economic conditions have been disrupted and volatile in recent years. At times, the credit markets as well as the debt and equity capital markets were distressed and it was difficult for many shipping companies to obtain adequate financing. The cost of available financing also increased significantly, but for leading shipping companies has since declined. The global financial markets and economic conditions could again experience volatility and disruption in the future.

We have traditionally financed our vessel acquisitions or constructions with our own cash (equity) and bank debt from various reputable national and international commercial banks. In relation to newbuilding contracts, the equity portion usually covers all or part of the pre-delivery obligations while the debt portion covers the outstanding amount due to the shipyard on delivery. More recently, however, we have arranged pre-delivery bank financing to cover much of the installments due before delivery, and, therefore, we would be required to provide the remainder of our equity investment at delivery. In addition, several of our existing loans will mature over the next few years, including the current year. In the event that the related vessels are not sold, or we do not wish to use existing cash for paying the final balloon payments, then re-financing of the loans for an extended period beyond the maturity date will be necessary. Current and future terms and conditions of available debt financing, especially for older vessels without time charter could be different from terms obtained in the past and could result in a higher cost of capital, if available at all. Any adverse development in the credit markets could materially alter our current and future financial and corporate planning and growth and have a negative impact on our balance sheet.

The future performance of our subsidiaries’ LNG carriers depends on continued growth in LNG production and demand for LNG and LNG shipping.

The future performance of our subsidiaries’ LNG carriers will depend on continued growth in LNG production and the demand for LNG and LNG shipping. A complete LNG project includes production,

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liquefaction, storage, re-gasification and distribution facilities, in addition to the marine transportation of LNG. Increased infrastructure investment has led to an expansion of LNG production capacity in recent years, but material delays in the construction of new liquefaction facilities could constrain the amount of LNG available for shipping, reducing ship utilization. The rate of growth in global LNG demand has fluctuated due to several factors, including global economic conditions and economic uncertainty, fluctuations in the price of natural gas and other sources of energy, growth in natural gas production from unconventional sources in regions such as North America and the highly complex and capital intensive nature of new or expanded LNG projects, including liquefaction projects. Growth in LNG production and demand for LNG and LNG shipping could be negatively affected by a number of factors, including:

Reduced demand for LNG or LNG shipping, or any reduction or limitation in LNG production capacity, could have a material adverse effect on our ability to secure future multi-year time charters for the LNG carriers, or for any new LNG carriers our subsidiaries may acquire, which could harm our business, financial condition, results of operations and cash flows, including cash available for dividends to our shareholders.

Demand for LNG shipping could be significantly affected by volatile natural gas prices and the overall demand for natural gas.

Gas prices are volatile and are affected by numerous factors beyond our control, including but not limited to the following:

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In recent years, global crude oil prices were very volatile. Any decline in oil prices can depress natural gas prices and lead to a narrowing of the gap in pricing in different geographic regions, which can adversely affect the length of voyages in the spot LNG shipping market and the spot rates and medium term charter rates for charters which commence in the near future. Any continued period of low oil prices could adversely affect both the competitiveness of gas as a fuel for power generation and the market price of gas, to the extent that gas prices are benchmarked to the price of crude oil. Some production companies have announced delays or cancellations of certain previously announced LNG projects, which, unless offset by new projects coming on stream, could adversely affect demand for LNG charters over the next few years, while the amount of tonnage available for charter is expected to increase.

An oversupply of LNG carriers may lead to a reduction in the charter hire rates we are able to obtain when seeking charters in the future.

Driven in part by an increase in LNG production capacity and the expectation of further future capacity, the construction and delivery of new LNG carriers has been increasing. Any future expansion of the global LNG carrier fleet that cannot be absorbed by existing or future LNG projects may have a negative impact on charter rates, ship utilization and ship values. Such impact could be amplified if the expansion of LNG production capacity does not keep pace with fleet growth.

Hire rates for LNG carriers may fluctuate substantially and declined significantly in 2016 and 2017. If rates remain low when we are seeking a new charter, our revenues and cash flows may decline.

The significant fall in oil prices that began in the second half of 2014 has contributed to substantial declines in the price of LNG, which coupled with delays in the completion of liquefaction and regasification facilities around the world and a high order book, particularly with vessels ordered on speculation, has led to declines in average rates for new spot and shorter-term LNG charters. Rates have started to recover more recently and are expected to improve in the future. However, if LNG charter market conditions fail to improve over the next eighteen months, we may have difficulty in securing new charters at attractive rates and durations for our two LNG carriers when their current charters expire.

We depend upon Hyundai Ocean Services to manage our subsidiaries’ LNG carriers.

Tsakos Energy Management has subcontracted all technical management of our LNG operations to Hyundai Ocean Services Co., Ltd (“HOS”) for a fee. Neither Tsakos Energy Management nor TCM has the dedicated personnel for running LNG operations nor can we guarantee that they will employ an adequate number of employees to conduct LNG operations in the future. As such, we are currently dependent on the reliability and effectiveness of third-party managers for whom we cannot guarantee that their employees, both onshore and at-sea are sufficient in number or capability for their assigned role. We also cannot assure you that we will be able to continue to receive such services from HOS on a long-term basis on acceptable terms or at all.

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Our growth in shuttle tankers depends partly on continued growth in demand for offshore oil transportation, processing and storage services.

Our growth strategy includes expansion in the shuttle tanker sector. Growth in this sector depends on continued growth in world and regional demand for these offshore services, which could be negatively affected by a number of factors, such as:

Oil prices have declined substantially in beginning in the second half of 2014, which has resulted in oil companies announcing reductions in oil production and exploration activities, including in offshore fields.

Fuel prices may adversely affect our profits.

While we do not bear the cost of fuel (bunkers) under time and bareboat charters, fuel is the largest, expense in our shipping operations when vessels are under spot charters. Increases in the price of fuel may, as a result, adversely affect our profitability. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments.

If our counterparties were to fail to meet their obligations under a charter agreement we could suffer losses or our business could be otherwise adversely affected.

As of April 20, 2018, 46 of our subsidiaries’ vessels were employed under time charters and time charters with profit share. The ability and willingness of each of the counterparties to perform their obligations under their charters will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the oil and energy industries and of the oil and oil products shipping industry as well as the overall financial condition of the counterparties and prevailing charter rates. There can be no assurance that some of our subsidiaries’ customers would not fail to pay charter hire or attempt to renegotiate charter rates and, if the charterers fail to meet their obligations or attempt to renegotiate charter agreements, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as our ability to pay dividends in the future.

The shipping industry has inherent operational risks that may not be adequately covered by our insurance.

We believe that we maintain as much insurance on the vessels in the fleet, through insurance companies, including Argosy, a related party company, and P&I clubs, as is appropriate and consistent with industry practice. While we endeavor to be adequately insured against all known risks related to the operation of our subsidiaries’ ships, there remains the possibility that a liability may not be adequately covered and we may not be

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able to obtain adequate insurance coverage for the fleet in the future. The insurers may also not pay particular claims. Even if our insurance coverage is adequate, we may not be able to obtain a replacement vessel in a timely manner in the event of a loss. Our insurance policies contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs or lower our revenue. In addition, some of our insurance coverage is maintained through mutual protection and indemnity associations, and as a member of such associations we may be required to make additional payments over and above budgeted premiums if member claims make an excessive impact on association reserves.

Failure to protect our information systems against security breaches could adversely affect our business and financial results. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.

The efficient operation of our business is dependent on computer hardware and software systems. Information systems are vulnerable to security breaches by computer hackers and cyber terrorists. We rely on industry-accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems. However, these measures and technology may not adequately prevent cybersecurity breaches, the access, capture or alteration of information by criminals, the exposure or exploitation of potential security vulnerabilities, the installation of malware or ransomware, acts of vandalism, computer viruses, misplaced data or data loss. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating costs, causing our business and results of operations to suffer. Any significant interruption or failure of our information systems or any significant breach of security could adversely affect our business and financial results, as well as our cash flows available for distribution to our shareholders

Our degree of leverage and certain restrictions in our financing agreements impose constraints on us.

We incur substantial debt to finance the acquisition of our vessels. At December 31, 2017, our debt to capital ratio was 53.9% (debt / debt plus equity), with $1.8 billion in debt outstanding. We are required to apply a substantial portion of our cash flow from operations to the payment of principal and interest on this debt. In 2017, all of our cash flow derived from operations was dedicated to debt service, excluding any debt prepayment upon the sale of vessels, voluntary early debt prepayments and balloon payments to be refinanced. This limits the funds available for working capital, capital expenditures, dividends and other purposes. Our degree of leverage could have important consequences for us, including the following:

In addition, our financing arrangements, which we secured by mortgages on our ships, impose operating and financial restrictions on us that restrict our ability to:

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We have a holding company structure which depends on dividends from our subsidiaries and interest income to pay our overhead expenses and otherwise fund expenditures. As a result, restrictions contained in our financing arrangements and those of our subsidiaries on the payment of dividends may restrict our ability to fund our various activities.

We are exposed to volatility in LIBOR and selectively enter into derivative contracts, which can result in higher than market interest rates and charges against our income.

Over the past fourteen years we have selectively entered into derivative contracts both for investment purposes and to hedge our overall interest expense and, more recently, our bunker expenses. Our board of directors monitors the status of our derivatives in order to assess whether such derivatives are within reasonable limits and reasonable in light of our particular investment strategy at the time we entered into the derivative contracts.

Loans advanced under our secured credit facilities are, generally, advanced at a floating rate based on LIBOR, which has been stable and at historically low levels in recent years, but was volatile in prior years and has started to increase again this year, which can affect the amount of interest payable on our debt, and which, in turn, could have an adverse effect on our earnings and cash flow. Our financial condition could be materially adversely affected at any time that we have not entered into interest rate hedging arrangements to hedge our interest rate exposure and the interest rates applicable to our credit facilities and any other financing arrangements we may enter into in the future, including those we enter into to finance a portion of the amounts payable with respect to newbuildings, increase. Moreover, even if we have entered into interest rate swaps or other derivative instruments for purposes of managing our interest rate or bunker cost exposure, our hedging strategies may not be effective and we may incur substantial loss.

We have a risk management policy and the Audit Committee oversees all our derivative transactions. It is our policy to monitor our exposure to business risk, and to manage the impact of changes in interest rates, foreign exchange rate movements and bunker prices on earnings and cash flows through derivatives. Derivative contracts are executed when management believes that the action is not likely to significantly increase overall risk. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. The derivatives strategies that we employ in the future may not be successful or effective, and we could, as a result, incur substantial additional interest costs. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk” for a description of our current interest rate swap arrangements.

Our subsidiaries’ vessels may suffer damage and we may face unexpected dry-docking costs which could affect our cash flow and financial condition.

If our vessels suffer damage, they may need to be repaired at a dry-docking facility. The costs of dry-dock repairs can be both substantial and unpredictable. We may have to pay dry-docking costs that our insurance does not cover. This would result in decreased earnings.

If we were to be subject to corporate income tax in jurisdictions in which we operate, our financial results would be adversely affected.

Under current Bermuda law, there is no income, corporate or profits tax or withholding tax, capital gains tax or capital transfer tax, estate or inheritance tax payable by us or our shareholders, other than shareholders ordinarily resident in Bermuda, if any. We have received from the Minister of Finance under The Exempted

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Undertaking Tax Protection Act 1966, as amended of Bermuda, an assurance that, in the event that Bermuda enacts legislation imposing tax computed on profits, income, any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance, then the imposition of any such tax shall not be applicable to us or to any of our operations or shares, debentures or other obligations, until March 23, 2035. We believe that we should not be subject to tax under the laws of various countries, other than the United States, in which our subsidiaries’ vessels conduct activities or in which our subsidiaries’ customers are located. However, our belief is based on our understanding of the tax laws of those countries, and our tax position is subject to review and possible challenge by taxing authorities and to possible changes in law or interpretation. We cannot determine in advance the extent to which certain jurisdictions may require us to pay corporate income tax or to make payments in lieu of such tax. In addition, payments due to us from our subsidiaries’ customers may be subject to tax claims. As a result of the continuing economic crisis in Greece, our operations in Greece may be subjected to new regulations that may require us to incur new or additional compliance or other administrative costs, which may include requirements that we pay to the Greek government new taxes or other fees. In addition, China has enacted a new tax for non-resident international transportation enterprises engaged in the provision of services of passengers or cargo, among other items, in and out of China using their own, chartered or leased vessels, including any stevedore, warehousing and other services connected with the transportation. The new regulation broadens the range of international transportation companies which may find themselves liable for Chinese enterprise income tax on profits generated from international transportation services passing through Chinese ports.

If we or our subsidiaries are not entitled to exemption under Section 883 of the United States Internal Revenue Code of 1986, as amended, for any taxable year, we or our subsidiaries would be subject for those years to a 4% United States federal income tax on our gross U.S.-source shipping revenue, without allowance for deductions, under Section 887 of the Internal Revenue Code. The imposition of such tax could have a negative effect on our business and would result in decreased earnings and cash flows available for distribution to our shareholders.

See “Item 10. Additional Information—Tax Considerations—United States federal income tax considerations” for additional information about the requirements of this exemption.

If we were treated as a passive foreign investment company, a U.S. investor in our shares would be subject to disadvantageous rules under the U.S. tax laws.

If we were treated as a passive foreign investment company (a “PFIC”) in any year, our U.S. shareholders would be subject to unfavorable U.S. federal income tax treatment. We do not believe that we will be a PFIC in 2018 or in any future year. However, PFIC classification is a factual determination made annually and we could become a PFIC if the portion of our income derived from bareboat charters or other passive sources were to increase substantially or if the portion of our assets that produce or are held for the production of passive income were to increase substantially. Moreover, the IRS may disagree with our position that time and voyage charters do not give rise to passive income for purposes of the PFIC rules. Accordingly, we can provide no assurance that we will not be treated as a PFIC for 2018 or for any future year. Please see “Tax Considerations—United States federal income tax considerations—Passive Foreign Investment Company Considerations” herein for a description of the PFIC rules.

Distributions on shares of non-U.S. companies that are treated as dividends for U.S. federal income tax purposes and are received by individuals generally will be eligible for taxation at capital gain rates if the shares with respect to which the dividends are paid are readily tradable on an established securities market in the United States. This treatment will not be available to dividends we pay, however, if we qualify as a PFIC for the taxable year of the dividend or the preceding taxable year, or to the extent that (i) the shareholder does not satisfy a holding period requirement that generally requires that the shareholder hold the shares on which the dividend is paid for more than 60 days during the 121-day period that begins 60 days before the date on which the shares become ex-dividend with respect to such dividend, (ii) the shareholder is under an obligation to make related payments with respect to substantially similar or related property or (iii) such dividend is taken into account as

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investment income under Section 163(d)(4)(B) of the Internal Revenue Code. We do not believe that we qualified as a PFIC for our last taxable year and, as described above, we do not expect to qualify as a PFIC for our current or future taxable years.

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

The charterers of the vessels owned by our subsidiary companies pay in U.S. dollars. While most of the expenses incurred by our managers or by us on our subsidiaries’ behalf are paid in U.S. dollars, certain of these expenses are in other currencies, most notably the Euro. In 2017, Euro expenses accounted for approximately 32% of our total operating expenses, including dry-dockings. Declines in the value of the U.S. dollar relative to the Euro, 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.

The Tsakos Holdings Foundation and the Tsakos family can exert considerable control over us, which may limit your ability to influence our actions.

As of April 2, 2018, companies controlled by the Tsakos Holdings Foundation or affiliated with the Tsakos Group own approximately 34.7% of our outstanding common shares. The Tsakos Holdings Foundation is a Liechtenstein foundation whose beneficiaries include persons and entities affiliated with the Tsakos family, charitable institutions and other unaffiliated persons and entities. The council which controls the Tsakos Holdings Foundation consists of five members, two of whom are members of the Tsakos family. As long as the Tsakos Holdings Foundation and the Tsakos family beneficially own a significant percentage of our common shares, each will have the power to influence the election of the members of our board of directors and the vote on substantially all other matters, including significant corporate actions.

Risks Related To Our Common and Preferred Shares

Future sales of our common shares could cause the market price of our common shares to decline.

Sales of a substantial number of our common shares in the public market, or the perception that these sales could occur, may depress the market price for our common shares. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future. We may issue additional common shares in the future and our shareholders may elect to sell large numbers of shares held by them from time to time.

The market price of our common shares and preferred shares may be unpredictable and volatile.

The market price of our common shares and Series B Preferred Shares, Series C Preferred Shares, Series D Preferred Shares and Series E Preferred Shares may fluctuate due to factors such as actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry, mergers and strategic alliances in the tanker industry, market conditions in the tanker industry, changes in government regulation, shortfalls in our operating results from levels forecast by securities analysts, announcements concerning us or our competitors, our sales of our common shares or of additional preferred shares, changes in prevailing interest rates and the general state of the securities market. The tanker industry has been highly unpredictable and volatile. The market for common stock and preferred stock in this industry may be equally volatile. Therefore, we cannot assure you that you will be able to sell any of our common shares and preferred shares you may have purchased, or will purchase in the future, at a price greater than or equal to the original purchase price.

If the market price of our common shares remains below $5.00 per share, under stock exchange rules, our shareholders will not be able to use such shares as collateral for borrowing in margin accounts. This inability to

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use common shares as collateral may depress demand and certain institutional investors are restricted from investing in or holding shares priced below $5.00, which could lead to sales of such shares creating further downward pressure on and increased volatility in the market price of our common shares.

We may not be able to pay cash dividends on our common shares or preferred shares as intended if market conditions change.

During 2017, we paid dividends on our common shares totaling $0.20 per common share, or $17.1 million. On March 12, 2018, the Company announced a common share dividend of $0.05 per common share to be paid on May 10, 2018 to holders of record as of May 3, 2018. In addition, during 2017 we paid dividends on our preferred shares totaling $22.8 million. In 2018 we have paid $6.6 million, between January 1 and April 20. A further $2.1 million has been declared for payment on April 30, 2018. Subject to the limitations discussed below, we currently intend to continue to pay cash dividends on our common shares and preferred shares. However, there can be no assurance that we will pay dividends or as to the amount of any dividend. The payment and the amount will be subject to the discretion of our board of directors and will depend, among other things, on restrictions in the Companies Act of 1981 of Bermuda, as amended, or the Companies Act, on our available cash balances, anticipated cash needs, our results of operations, our financial condition, and any loan agreement restrictions binding us or our subsidiaries, including a limit on dividends exceeding 50% of our net income for any particular year, plus certain additional amounts permitted to the extent 50% of our aggregate net income in prior years exceeded dividends paid during such years, as well as other relevant factors. Net losses that we incurred in certain of our historical periods as well as dividends that we historically paid reduce the amount of the accumulated consolidated net income from which we are permitted to pay dividends under our loan agreements while net income in other periods increases the amount. In addition, dividends on our common shares are subject to the priority of our dividend obligations relating to our Series B, Series C, Series D and Series E Preferred Shares. We may have insufficient cash to pay dividends on or redeem our Series B, Series C, Series D and Series E Preferred Shares, or pay dividends on our common shares. Depending on our operating performance for a particular year, this could result in no dividend at all despite the existence of net income, or a dividend that represents a lower percentage of our net income.

Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to pay us dividends. In addition, the financing arrangements for indebtedness we incur in connection with our newbuilding program may further restrict our ability to pay dividends. In the event of any insolvency, bankruptcy or similar proceedings of a subsidiary, creditors of such subsidiary would generally be entitled to priority over us with respect to assets of the affected subsidiary. Investors in our common shares, Series B Preferred Shares, Series C Preferred Shares, Series D Preferred Shares or Series E Preferred Shares may be adversely affected if we are unable to or do not pay dividends as intended.

Market interest rates may adversely affect the value of our Series B Preferred Shares, Series C Preferred Shares, Series D Preferred Shares and Series E Preferred Shares.

One of the factors that influences the price of our Series B Preferred Shares, Series C Preferred Shares, Series D Preferred Shares and Series E Preferred Shares is the dividend yield on these preferred shares (as a percentage of the price thereof) relative to market interest rates. An increase in market interest rates, which are currently at low levels relative to historical rates and have recently been increasing, may lead to lower prices for our shares when valued using their dividend yields. Higher interest rates would likely increase our borrowing costs and potentially decrease funds available for dividends. Accordingly, higher interest rates could cause the market prices of our preferred shares to decrease.

Holders of our Preferred Shares have extremely limited voting rights.

The voting rights of holders of Series B Preferred Shares, Series C Preferred Shares, Series D Preferred Shares and Series E Preferred Shares are extremely limited. Our common shares are the only class or series of

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our shares carrying full voting rights. The voting rights of holders of these preferred shares are limited to the ability, subject to certain exceptions, to elect, voting together as a class with all other classes or series of parity securities upon which like voting rights have been conferred and are exercisable, one director if dividends for six quarterly dividend periods (whether or not consecutive) payable thereon are in arrears and certain other limited protective voting rights described in “Item 10. Additional Information—Description of Share Capital—Preferred Shares.”

Provisions in our Bye-laws and our management agreement with Tsakos Energy Management would make it difficult for a third party to acquire us, even if such a transaction is beneficial to our shareholders.

Our Bye-laws provide for a staggered board of directors, blank check preferred stock, super majority voting requirements and other anti-takeover provisions, including restrictions on business combinations with interested persons and limitations on the voting rights of shareholders who acquire more than 15% of our common shares. In addition, Tsakos Energy Management would have the right to terminate our management agreement and seek liquidated damages if a board member were elected without having been approved by the current board. These provisions could deter a third party from tendering for the purchase of some or all of our shares. These provisions may have the effect of delaying or preventing changes of control of the ownership and management of our company.

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

We are a Bermuda company. Our Memorandum of Association and Bye-laws and the Companies Act govern our affairs. While many provisions of the Companies Act resemble provisions of the corporation laws of a number of states in the United States, Bermuda law may not as clearly establish your rights and the fiduciary responsibilities of our directors as do statutes and judicial precedent in some U.S. jurisdictions. In addition, apart from three non-executive directors, our directors and officers are not resident in the United States and all or substantially all of our assets are located outside of the United States. As a result, investors may have more difficulty in protecting their interests and enforcing judgments in the face of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction.

In addition, you should not assume that courts in the country in which we are incorporated or where our assets are located would enforce judgments of U.S. courts obtained in actions against us based upon the civil liability provisions of applicable U.S. federal and state securities laws or would enforce, in original actions, liabilities against us based on those laws.

We are a “foreign private issuer” under NYSE rules, and as such we are entitled to exemption from certain NYSE corporate governance standards, and you may not have the same protections afforded to shareholders of companies that are subject to all of the NYSE corporate governance requirements.

We are a “foreign private issuer” under the securities laws of the United States and the rules of the NYSE. Under the securities laws of the United States, “foreign private issuers” are subject to different disclosure requirements than U.S. domiciled registrants, as well as different financial reporting requirements. Under the NYSE rules, a “foreign private issuer” is subject to less stringent corporate governance requirements. Subject to certain exceptions, the rules of the NYSE permit a “foreign private issuer” to follow its home country practice in lieu of the listing requirements of the NYSE, including (i) the requirement that a majority of the board of directors consist of independent directors, (ii) the requirement that the nominating/corporate governance committees be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities, (iii) the requirement that the compensation committee be composed entirely of independent directors and have a written charter addressing the committee’s purpose and responsibilities, and (iv) the requirement of an annual performance evaluation of the nominating/corporate governance and compensation committees.

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Nonetheless, a majority of our directors are independent, all of the members of our compensation, nominating and corporate governance committee are independent directors, and all of our board committees have written charters addressing their respective purposes and responsibilities.

Tsakos Energy Navigation Limited is a leading provider of international seaborne crude oil and petroleum product transportation services. In 2007, it also started to transport liquefied natural gas. It was incorporated in 1993 as an exempted company under the laws of Bermuda under the name Maritime Investment Fund Limited and in, 1996, was renamed MIF Limited. Our common shares were listed in 1993 on the Oslo Stock Exchange (OSE) and the Bermuda Stock Exchange, although we de-listed from the OSE in March 2005 due to limited trading. The Company’s shares are no longer actively traded on the Bermuda exchange. In July 2001, the Company’s name was changed to Tsakos Energy Navigation Limited to enhance our brand recognition in the tanker industry, particularly among charterers. In March 2002, we completed an initial public offering of our common shares in the United States and our common shares began trading on the New York Stock Exchange under the ticker symbol “TNP.” Since incorporation, the Company has owned and operated 96 vessels and has sold 35 vessels (of which five had been chartered back and three of these eventually repurchased at the end of their charters; all three have since been sold again).

Our principal offices are located at 367 Syngrou Avenue, 175 64 P. Faliro, Athens, Greece. Our telephone number at this address is 011 30 210 9407710. Our website address is http://www.tenn.gr.

For additional information on the Company, see “Item 5. Operating and Financial Review and Prospects.”

Business Overview

As of April 20, 2018 we operated a fleet of 59 modern crude oil and petroleum product tankers (including two vessels chartered-in) that provide world-wide marine transportation services for national, major and other independent oil companies and refiners under long, medium and short-term charters. Our fleet also includes two LNG carriers and three suezmax shuttle tankers with advanced dynamic positioning technology (DP2), bringing our total operating fleet to 64 vessels. The resulting fleet (assuming no further chartered-in vessels and no sales or acquisitions) comprises 64 vessels representing approximately 6.9 million dwt.

We believe that we have established a reputation as a safe, high quality, cost efficient operator of modern and well-maintained tankers. We also believe that these attributes, together with our strategy of proactively working towards meeting our customers’ chartering needs, has contributed to our ability to attract world-class energy producers as customers and to our success in obtaining charter renewals generating strong fleet utilization.

Our fleet is managed by Tsakos Energy Management, a company owned by our chief executive officer. Tsakos Energy Management provides us with strategic advisory, financial, accounting and administrative services, while subcontracting the commercial management of our business to Tsakos Shipping. In its capacity as commercial manager, Tsakos Shipping provides various services for our vessels, including charterer relations, obtaining insurance and vessel sale and purchase, supervising newbuilding construction and vessel financing. Until June 30, 2010, Tsakos Shipping had also provided technical and operational management for the majority of our vessels.

Tsakos Energy Management subcontracts the technical and operational management of our fleet to TCM. TCM was formed in February 2010 by Tsakos family interests and a German private company, the owner of the ship management company Columbia Shipmanagement Ltd., or CSM, as a joint-venture ship management company on an equal partnership basis to provide technical and operational management services to owners of vessels, primarily within the Greece-based market. TCM, which formally commenced operations on July 1, 2010,

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now manages the technical and operational activities of all of our operating vessels apart from the LNG carriers Neo Energy and Maria Energy, the VLCCs Ulysses and Hercules I, the suezmax tanker Eurochampion 2004 and the aframax tankers Maria Princess and Sapporo Princess which are technically managed by a non-affiliated ship manager. TCM is based in Athens, Greece. TCM and CSM cooperate in the purchase of certain supplies and services on a combined basis. By leveraging the purchasing power of CSM, which currently provides full technical management services for 294 vessels and crewing services for an additional 52 vessels, we believe TCM is able to procure services and supplies at lower prices than Tsakos Shipping could alone, thereby reducing overall operating expenses for us. In its capacity as technical manager, TCM manages our day-to-day vessel operations, including provision of supplies, maintenance and repair, and crewing. Members of the Tsakos family are involved in the decision-making processes of Tsakos Energy Management, Tsakos Shipping and TCM.

As of April 20, 2018, our operational fleet consisted of the following 64 vessels:

Twenty-five of the operating vessels are of ice-class specification. This fleet diversity, which includes a number of sister ships, provides us with the capability to be one of the more versatile operators in the market. The current operating fleet totals approximately 6.9 million dwt, all of which is double-hulled. As of April 20, 2018, the average age of the tankers in our current operating fleet was 7.5 years, compared with the industry average of 10.4 years.

We believe the following factors distinguish us from other public tanker companies:

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As of April 20, 2018, our fleet consisted of the following 64 vessels: