Nordic American Tankers Limited (NYSE

NAT) - Letter to Shareholders from the Chairman. Low oil price is good for the tanker industry.

Hamilton, Bermuda November 20, 2014

Dear Shareholders,

Many of you have recently contacted us regarding the impact of the recent drop in the oil price on our business. Let me be very clear that the effect is positive for the world tanker business. The upswing in Suezmax tanker rates in the recent past may have to some extent to do with the decrease in the oil price. The Suezmax tanker market is strong at the time of this letter which is boding well for the 4^th quarter of 2014.

Increased oil demand and economic growth

The most significant impact of a lower oil price is an increase in oil demand. Lower prices may trigger stockpiling or have a more general positive impact. A saving of $20 per barrel equates to savings for the US of about $55 billion annually.  Such an oil price decrease has the same effect on the overall economy as a tax reduction.

The effect of all this is growth - more investment, more jobs and more oil demand. In the US, there is now significant domestic oil production. The story is not the same other places. We see in the shipping market that volumes of oil being transported are increasing. This increases the worldwide demand for Suezmax tankers, which is positive for our business.

Savings in bunker fuel costs

By far our largest cost item is the bunker fuel that the ships are burning in the main engines. Until recently, bunker fuel costs stood at about $600-$650 per ton. Our 22 vessels typically burn about 40-50 tons of fuel per day each depending upon the speed of the vessel. Recently bunker prices have dropped to around $450 per ton, decreasing our cost base. This is also positive for our business.

Improved balance between supply and demand for Suezmax vessels

We say it again - the world Suezmax tanker fleet is not growing at this time. In fact, we believe the fleet could shrink over the next few years.  The rates achieved by tankers are a result of supply and demand for vessels. The improved rates earned in 3Q2014 have continued into 4Q2014. This is also a reflection of higher total fleet utilization. Based on the world Suezmax tanker orderbook, supply can be expected to remain constrained in the near term, which is positive for our business.

In our recent reports we have referred to the improving fundamentals. We believe that there are positive signs in the market for Suezmax tankers.  With this letter I wish to make it clear that a lower oil price is contributing positively to our business beyond the effects of changing trade patterns and constrained Suezmax tanker supply growth.  We remain cautious as always but we believe we see some bright spots on the horizon.