OMI Corporation News Release for the Quarter Ended June 30, 1999.

STAMFORD, Conn.--(BUSINESS WIRE)--Aug. 12, 1999--

OMI Corporation (NYSE:OMM) today announced a net loss of $33,172,000 for the quarter ended June 30, 1999 or $0.80 basic loss per share. The quarter loss includes loss on disposal of assets of $23,666,000 and a provision for loss on lease obligation of $6,229,000. Net loss for the six months ended June 30, 1999 was $30,436,000 or $0.73 basic loss per share after income from the cumulative effect of change in accounting principle of $2,729,000 or $0.07 per basic earnings per share. Net income for the quarter ended and six months ended June 30, 1998 was $36,450,000 or $0.84 basic earnings per share and $39,539,000 or $0.92 basic earnings per share, respectively, which includes a reversal of deferred income taxes in the amount of $38,887,000 or $0.90 per share.

During the second quarter 1999, OMI changed its method of accounting for freight on voyage charters. The accounting change is effective for the period beginning January 1, 1999 and income of $2,729,000 was recorded for the six months ended June 30, 1999 as cumulative effect of change in accounting principle. The change in the Company's method of revenue recognition for voyages from the load-to-load basis to discharge-to-discharge basis is a more reliable method in recognizing voyage revenue as it eliminates the uncertainty associated with estimating location of the next load port under the load-to-load basis. Voyage revenue is recognized evenly over the period from the departure of a vessel from its original discharge port to departure at the next discharge port.

OMI has concentrated its fleet in two classes of vessels, Suezmax and product tankers. OMI Corporation, after its spin-off from OMI Corp., is a Marshall Islands Corporation and not in the United States tax jurisdiction. By focusing on only two fleets, OMI has been implementing its plan for fleet renewal with the delivery of four Suezmax newbuildings since June 1998 and a fifth one to be delivered in 2000. During July 1999, a 35,407 dwt. product carrier newbuilding was delivered. This vessel is time chartered for the next two years. Additionally, another 35,000 dwt product carrier is scheduled to be delivered in September 1999 and is also time chartered for the next two years.

During January 1999, the Company took delivery of the COLUMBIA, a Suezmax newbuilding. On June 30, 1999, the Company completed a sale/leaseback for the COLUMBIA. The vessel was sold for $54,000,000, which resulted in a loss of $1,992,000.

Currently, rates for both fleets are below historical levels resulting from the imbalance of supply/demand for crude oil and refined products and various factors detailed in the Market Summary. Management has addressed current economic issues and continues to attempt to maximize profitability with strategies to increase the fleet utilization levels. The Company believes that concentrations in two fleet categories will have certain strategic advantages. In 1998, OMI formed a joint venture, Alliance Chartering LLC, with Frontline Ltd., to charter their Suezmaxes. This joint venture currently maintains a significant market share in the Suezmax market segment. In 1999, OMI entered into another alliance with Osprey Maritime Limited to form a midsize product tanker venture, International Product Carriers Limited ("IPC"). This joint venture began operations on May 1, 1999. By September 1999, all of OMI product carriers except the two new product carriers will operate through adjustable rate time charters with IPC.

As a result of market conditions as well as new tonnage entering the market, OMI is disposing of older Suezmax vessels and less competitive vessels. By doing this, the Company will be better able to focus its capital on areas where its resources can provide higher returns. During July 1999, OMI sold two Suezmax vessels built in 1974 and 1975. A loss of $6,945,000 was recognized from the sale of these two vessels which were held for sale at their net realizable values on June 30, 1999. Three other vessels were also held for sale at June 30, 1999, two 1975 Suezmax tankers and one aframax vessel. These vessels were also held for sale at their fair values and an additional loss of $14,729,000 was recognized. In August 1999, one of the 1975 Suezmax 1975 Suezmax tankers was contracted for sale at the end of the month. The disposal of the remaining Suezmax tanker and the aframax are expected within a year. An additional non recurring item was included in the second quarter operating loss of $6,229,000 relating to the provision for loss on one of the Company's chartered-in vessels. An accounting adjustment was required at this time because estimated forecasted future cash flows based on projected estimated future rates were less than the lease obligations payments.

FLEET REPORT

Currently, OMI's fleet comprises 26 vessels (including one newbuilding delivered in July 1999, three chartered-in vessels and three jointly owned vessels). In January 1999, OMI took delivery of a Suezmax newbuilding and in July 1999 took delivery of a product tanker. The fleet currently comprises five wholly-owned Suezmaxes, three chartered-in Suezmaxes, one aframax, three 66,000 dwt. product tankers currently carrying crude oil, eleven handysize product carriers transporting clean products and the three vessels jointly owned. -0-

FINANCIAL INFORMATION

    The following table summaries OMI Corporation's results of
operations for the three and six months ended June 30, 1999 compared
to the three and six months ended June 30, 1998:

                  For The Three Months    For The Six Months
                     Ended June 30,           Ended June 30,
RESULTS OF
 OPERATIONS         1999        1998        1999         1998
                        (In thousands except per share data)
(UNAUDITED)

Operating
 revenues
 (TCE
 revenues)        $ 23,307    $ 26,784    $ 49,643   $ 57,321
Operating
 expenses
 (includes
 charter
 hire
 expenses)          14,169      20,374      27,698     37,802

Net voyage
 revenues            9,138       6,410      21,945     19,519

Depreciation
 and
 amortization        6,130       5,633      12,317     11,382
Provision
 for loss of
 lease
 obligation(1)       6,229        --         6,229        --
General and
 administrative
 expenses            2,543       2,567       5,229      4,638

Operating
 (loss) income      (5,764)     (1,790)     (1,830)     3,499

Loss on
 disposal of
 assets-net(2)     (23,666)       --       (23,666)       --
Net interest
 expense            (3,921)     (1,659)     (7,658)    (3,282)
Equity (loss)
 in
 operations
 of joint
 ventures              179       1,122         (11)     2,164

(Loss)
 income
 before
 income
 taxes             (33,172)     (2,327)    (33,165)     2,381
Benefit
 for
 income
 taxes(3)             --        38,777        --       37,158

Cumulative
 effect of
 change in
 accounting
  principle           --          --         2,729        --

Net (loss)
 income           $(33,172)   $ 36,450  $  (30,436) $  39,539

Basic (loss)
 earnings
 per common
 share:
(Loss)
 income
 before
 cumulative
 effect
 of change
 in
 accounting
 principle     $     (0.80)   $   0.84    $  (0.80)  $   0.92
Net (loss)
 income        $     (0.80)   $   0.84    $  (0.73)  $   0.92

Diluted
 (loss)
 earnings
 per
 common
 share:
(Loss)
 income
 before
 cumulative
 effect
 of change
 in
 accounting
 principle       $   (0.80)   $   0.83     $ (0.80)   $  0.90
Net (loss)
 income          $   (0.80)   $   0.83     $ (0.73)   $  0.90

Weighted
 average
 shares
 outstand-
 ing(4)             41,647      43,271      41,629     43,172

EBITDA(5)         $  6,767    $  4,904   $  16,614   $ 17,015


(1)  The provision for loss on a vessel chartered in until 2001 of
     $6,229,000 is a non-recurring accounting adjustment due to the
     current lease obligation exceeding estimated future cash flows
     for this vessel.

(2)  Loss on disposal of assets-net, includes losses for five vessels
     held for sale at June 30,1999 two of which were sold in July 1999
     and one Suezmax vessel which was sold June 30, 1999 in a
     sale/leaseback transaction.

(3)  After June 17, 1998, OMI's shipping income was no longer taxable
     and $38,887,000 balance in deferred income taxes was credited to
     income.

(4)  During the second half of 1998, OMI purchased 2,076,700 shares of
     the Company's Common Stock at an average price of $4.35 per
     share.

(5)  "EBITDA" represents net income (loss) from operations before
     interest expense, income taxes, depreciation and amortization
     expense, provision for loss on lease obligation, losses on
     disposal of assets and cumulative effect of change in accounting
     principle. EBITDA is not required by generally accepted
     accounting principles and should not be considered as an
     alternative to net income or any other measure of performance
     required by generally accepted accounting principles or as an
     indicator of the Company's operating performance.


                            June 30,  December 31,
                              1999        1998
CONDENSED BALANCE SHEET



Cash and cash equivalents   $ 24,418   $ 22,698
Vessels held for sale         16,755       --
Other current assets          23,575     24,397
Vessels-net                  352,588    393,862
Construction in progress
 (newbuildings)               23,027     34,733
Other assets                  61,165     54,437

Total assets                $501,528   $530,127

Current liabilities         $ 53,027   $ 45,181
Long-term liabilities        233,674    239,763
Total equity                 214,827    245,183

Total liabilities and
 equity                     $501,528   $530,127

RESULTS

    Operating or TCE ("Time Charter Equivalent") revenues, which is
voyage revenue less voyage expenses, of $23,307,000 for the quarter
and $49,643,000 for the six months ended June 30, 1999, decreased
$3,477,000 for the quarter and $7,679,000 for the six months compared
to the applicable periods in 1998. Net decreases in both the three and
six months ended June 30, 1999 compared to the 1998 periods are
primarily attributed to the decreases from the five vessels held for
sale at June 30, 1999. Other decreases relate to lower TCE revenue
from four vessels that were chartered-in in 1998 compared to two
vessels chartered-in 1999 (however, charter hire expense not included
in the TCE revenue also declined limiting the impact on net results of
operations). There were decreases in TCE revenues during 1999 in the
product carrier segment in line with market declines for the periods
presented. Another decrease in the Clean group relates to two Panamax
vessels which carried clean products in the first half of 1998 and
began carrying crude oil in the second half of 1998. Increases in TCE
revenue, which partially offset the decreases mentioned above were
from revenues earned on four Suezmax newbuildings delivered from June
1998 through January 1999.

    Operating expenses decreased in both the three and six months
ended June 30, 1999 compared to the same periods in 1998, primarily
because of less charter hire expenses due to two less vessels
chartered-in in 1999. The 1999 charge for provision for loss on the
lease obligation on one of the two vessels chartered-in of $6,229,000
is a one time charge for the excess of the lease obligation over
future cash flows anticipated over the lease term which expires
September 2001.

BREAKDOWN BY FLEET FOR THE QUARTER ENDED JUNE 30,

                          CRUDE               CLEAN
(UNAUDITED)        1999       1998        1999     1998


Voyage
 revenues        $ 20,868    $ 22,856   $  9,534   $ 13,973
Voyage
 expenses           5,726       6,168      1,479      3,876

TCE revenues
 (Time
 charter
 equivalent)       15,142      16,688      8,055     10,097
Operating
 expenses           6,536       4,757      4,008      5,701
Charter hire
 expenses           3,557       7,223       --         --

Net voyage
 revenues           5,049       4,708      4,047      4,396
Provision for
 loss on
 lease
 obligation         6,229        --         --         --
Depreciation
 expense            3,358       2,359      2,532      3,079

Operating
 (loss) income   $ (4,538)   $  2,349   $  1,515   $  1,317
                 ==========================================


BREAKDOWN BY FLEET FOR THE SIX MONTHS ENDED JUNE 30,

                        CRUDE                 CLEAN
(UNAUDITED)         1999     1998         1999     1998

Voyage
 revenues        $ 44,939   $ 49,615   $ 20,370    $ 27,232
Voyage
 expenses          11,511     13,387      4,200       6,155

TCE revenues
 (Time
 charter
 equivalent)       33,428     36,228     16,170      21,077
Operating
 expenses          12,785      9,527      8,017      11,236
Charter hire
 expenses           6,783     14,378         --          --

Net voyage
 revenues          13,860     12,323      8,153       9,841
Provision
 for loss
 on lease
 obligation         6,229         --         --          --
Depreciation
 expense            6,794      4,695       5,063      6,308

Operating
 income           $   837    $ 7,628     $ 3,090    $ 3,533
                  =========================================

Suezmax Tankers

    Freight rates in the Suezmax market recovered somewhat in the
first quarter in 1999 relative to the preceding quarter, but
substantially fell in the second quarter to the lowest level in four
years. This was the result of further OPEC and non-OPEC oil production
cuts, the summer maintenance in the North Sea, unrest in West Africa
and increasing competition from displaced VLCCs. The crude tanker
market is expected to remain relatively weak in the near term due to
high newbuilding deliveries unless there is substantial scrapping
activity.

Product Tankers

    Freight rates in the product tanker market showed some seasonal
improvement in the last months of 1998 but they began falling again
early in 1999 as a result of further fleet expansion and weak oil
demand in the Pacific region, notwithstanding signs of recovery of
economic activity in the area. The adverse freight rate environment in
the product tanker market is expected to persist in the short-term due
to relatively high newbuilding deliveries for the balance of 1999 and
a substantial draw of petroleum product inventories in the next few
months. However, prospects for recovery in this tanker sector have
enhanced as newbuilding deliveries would return to a moderate level
next year. Furthermore, oil product import requirements are expected
to increase in the three major world oil consuming areas (North
America, Western Europe and the Pacific region) in the next few years
as oil demand growth is expected to exceed refinery capacity in these
areas.

    After product tanker rates reached a very high level early in
1997 they began receding gradually as a result of lower oil product
imports in the Pacific region due to the ongoing financial crisis and
new refinery capacity, higher throughput in industrialized countries
as well as the substantial growth of the product tanker fleet.
Ton-mile demand for product tankers fell by about 4% in 1998 from the
preceding year level, though the product tanker fleet grew by about
4.5%. As a result, average freight rates for product tankers in 1998
were substantially lower than rates prevailing in the previous year,
and the lowest since 1992.

FINANCIAL ITEMS

    Net interest expense increased $2,262,000 for the three months
and $4,376,000 for the six months ended June 30, 1999 compared to the
three and six months ended June 30, 1998. The increases were primarily
due to interest expense on additional borrowings to finance four
newbuildings.

    Equity (loss) in operations of joint ventures decreased $943,000
for the three months and $2,175,000 for the six months ended June 30,
1999 compared to the three and six months ended June 30, 1998. The
decrease in joint venture equity in the 1999 period was primarily due
to decreased earnings from one joint venture which owns one ULCC
vessel which was in drydock during the first quarter of 1999. Other
decreases in equity related to OMI's ventures which operate vessels
and experienced declines in rates in the 1999 first half compared to
the first half of 1998.

FUTURE PROSPECTS

    The world tanker fleet totaled approximately 276.5 million dwt at
mid-year 1999, the same as at the end of the first quarter but up by
3.7 million dwt or 1.4% from the year-end 1998 level. At the same
time, the tanker orderbook stood at 42.3 million dwt, or 15.3% of the
existing fleet. Approximately 11.3 million dwt is scheduled for
delivery in the second half of 1999, 20.1 million dwt in the year 2000
and most of the balance in the year 2001. The tanker orderbook
includes 32 Suezmaxes of about 4.9 million dwt or 14.3% of the
existing fleet, and 6.3 million dwt of product tankers or about 13.4%
of the existing product tanker fleet.

    However, 90 Suezmax tankers aggregating 12.4 million dwt or 36.4%
of the existing Suezmax fleet, and 9.1 million dwt or 19.5% of the
existing product tanker fleet were 20 or more years old at mid-1999.
In addition, 101.1 million dwt or 36.6% of the total tanker fleet was
20 or more years old. The fall in tanker freight rates has led to
increasing tanker scrapping activity and restrain in ordering new
tonnage. Tanker sales for scrap totaled about 7.0 million dwt in the
first half of 1999, more than double the tanker tonnage sold for scrap
in the same period a year ago, while new orders totaled 5.4 million
dwt. The sales for scrap include 15 VLCCs and seven Suezmaxes. The
current tanker market weakness, the relatively high tanker orderbook,
an expensive fifth special survey and stricter environment regulations
should accelerate deletions of the old tanker tonnage.

    OMI Corporation's earnings for the third quarter will be impacted
by a weakness in the tanker market as a result of reduction in oil
production. Any improvement in freight rates in both the clean and
crude markets will be largely dependent upon improvement in economic
conditions in the Pacific region as well as an increase in the rate of
tanker scrappings in view of the relatively high newbuilding
deliveries expected in the balance of this year and in the year 2000.

    Faced with the current environment, OMI has taken steps to reduce
its cost structure in 1999 as well as its capital expenditures in
order to improve earnings, and cash flows and strengthen the balance
sheet.

FORWARD LOOKING INFORMATION

    This release contains certain forward-looking statements. These
statements are based on management's current expectations and
observations, and are subject to a number of risks and uncertainties
that could cause actual results to differ materially from the
forward-looking statements. Additional information concerning these
statements and other matters is contained in the Company's periodic
filings with the Securities and Exchange Commission.

    OMI Corporation has made arrangements to use the service of
DeraCom for its earnings presentation which is scheduled for August
13, 1999 at 10:00 a.m. Conference participants should call
1-800-633-8638, and the international number is 609-683-0165. There
will be a recorded playback available after the teleconference call
for two weeks after the original call. The toll free number is
1-800-835-2663 and 609-896-8185 for international playbacks.