Morten Arntzen, President and CEO of OSG commented, ""The crude oil tanker market saw unprecedented levels of strength in the first half of 2008, primarily due to OPEC production increases. This resulted in a significant pick-up in long haul movements at the same time as single hull discrimination increased, creating a strong freight rate environment. On the product tanker side, rates were lifted by a surge in diesel movements worldwide." Arntzen continued, "Market conditions continue to create a very strong outlook for our crude tankers and the prospects for our other two main businesses are equally compelling. Our investments in the U.S. Flag segment and its 14-vessel newbuild program will nearly double the unit's revenues in three years. In the next 12 months our International Flag Product Carrier business will transform as 13 bareboat chartered-in, non-double hull ships are replaced with modern double hull ships having much greater earnings capacity and the LR1 fleet expands. Our world-class technical and commercial platform, fleet portfolio and ample opportunities to further scale our business gives me and the OSG management team a lot to be excited about."

(1)See Appendix 1 for a reconciliation of TCE revenues to shipping revenues and Appendix 2 for a reconciliation of EBITDA to net income.

For the first six months ended June 30, 2008, the Company reported a 43% increase in TCE revenues to $761.9 million from $533.4 million in the comparable period of 2007. EBITDA for the first six months of 2008 increased 12% to $329.1 million from $294.6 million in the first six months of 2007. Net income increased 22% to $199.4 million for the first six months of 2008 compared with $163.6 million in the first half of 2007. Diluted earnings per share increased 45% to $6.42 from $4.44 in the first half of 2008 compared with the same period a year ago. The first six months of 2008 benefited from a gain on vessel sales of $23.7 million or $0.75 per diluted share, offset by unrealized losses on freight derivative positions of $29.5 million or $0.93 per diluted share, and the charge of $9.4 million related to the bond redemption previously referenced. The first six months of 2007 benefited from gains on sales of securities of $41.3 million or $0.73 per diluted share, and a gain on vessel sales of $5.6 million, or $0.15 per diluted share.

TCE revenues in the second quarter of 2008 for the International Crude Oil segment were $255.0 million, an increase of $94.7 million, or 59% from $160.3 million in the same period of 2007. The increase was principally due to the significant increases in average rates earned by VLCCs and Aframaxes. In addition, the Company's expansion into Suezmaxes late in 2007 added more than $11.1 million to the segment's TCE revenues in the second quarter. TCE revenues for the International Product Carrier segment were $71.6 million, up $12.4 million or 21% from $59.2 million in the year earlier period. The growth was principally attributable to an increase in revenue days, reflecting in part the addition of two LR1s in the third quarter of 2007. TCE revenues from the U.S. segment were $51.7 million, up $2.9 million or 6%, from $48.8 million in the same quarter a year earlier. This reflects the delivery of the three Handysize Product Carriers, offset by the sale of two dry bulk carriers and the reflagging of one car carrier under the Marshall Islands flag in 2007. The balance of TCE revenues were derived from the Company's two International Flag dry bulk carriers and, in 2008, the one reflagged car carrier.

OSG operates most of its crude oil tankers in commercial pooling arrangements (Pools). The Pools' cargo commitments make them attractive, but such commitments limit the Pools' ability to support any significant portfolio of time charters. Accordingly, OSG enters into forward freight agreements (FFA) and bunker swaps to create synthetic time charters. The results of derivative positions that qualify for hedge accounting treatment and are effective are reflected in TCE revenues in the periods to which such hedges relate. Including such positions, the Company achieved TCE rates for VLCCs of $73,832 per day for 609 days for the second quarter of 2008. The June 30, 2008 mark-to-market for derivative positions through 2010 that qualify for hedge accounting treatment are recorded in accumulated other comprehensive income (stockholders' equity). The actual results of these hedge positions will be reflected in the Company's earnings in the periods to which the positions relate, essentially creating fixed charter revenues.(2) The results of derivative positions that do not qualify for hedge accounting treatment are reflected in other income/(expense) and resulted in an expense of $42.4 million in the quarter ended June 30, 2008, including mark-to-market unrealized losses at June 30, 2008 of $30.4 million.

(2)See Appendix 4 and 5 for fixed rates of synthetic time charters.

Income from vessel operations was $146.8 million in the second quarter of 2008, a 118% increase from $67.3 million in the same period a year earlier. During the period, total operating expenses increased 21%, or $48.7 million, to $281.4 million from $232.7 million in the corresponding quarter in 2007. Voyage expenses increased by $16.3 million, principally as a result of higher fuel expenses. Vessel expenses increased $8.9 million quarter-over-quarter primarily due to higher crew costs associated with the Company's continuing efforts to attract and retain high quality crews. Charter-hire expense increased 52% to $103.4 million from $67.9 million in the second quarter of 2007 principally due to 11 additional ships chartered-in in the second quarter 2008 compared with the same period a year ago. In addition, profit share, a component of charter-hire expense, increased $9.8 million period-over-period due to significantly higher TCE rates than the comparable quarter in 2007. Depreciation and amortization expense of $47.3 million in the second quarter of 2008 reflects the impact of an increase in estimated salvage value of the Company's owned fleet effective January 1, 2008. This change in estimate reduces depreciation by approximately $2.7 million per quarter commencing in the first quarter of 2008. As previously indicated, the quarter-over-quarter increase in gains on vessel sales positively impacted the change in income from vessel operations.

FINANCIAL HIGHLIGHTS

$200 Million Share Repurchase Program Complete and New Program Announced. During the second quarter the Company completed its 2007 share repurchase program and repurchased 280,000 shares at an average price per share of $77.48. On June 9, 2008 the Board of Directors authorized a new share purchase program of $250 million and during the quarter repurchased 150,000 shares at an average price of $77.40. Since the initial announcement of its share repurchase program on June 9, 2006, the Company has repurchased 9.4 million shares at an average price of $66.42 per share, or 23.8% of total shares outstanding, at a total cost of $625 million.

Dividend Increased. On June 9, 2008, OSG increased its regular quarterly dividend by 40% to $0.4375 per share from $0.3125 per share on its outstanding common stock. The August dividend of $0.4375 per share will be payable on August 27, 2008 to stockholders of record on August 6, 2008. The increase results in an indicated annual rate of $1.75 per share.

Bond Redemption. On April 7, 2008, OSG announced the redemption of all $176,115,000 principal outstanding of its 8.25% Senior Notes due 2013. The redemption price was 104.125% of the principal amount of the Notes together with accrued and unpaid interest as of the redemption date, which was May 15, 2008. This redemption will reduce the Company's interest expense by approximately $7.0 million per annum through March 2013.

Cash Repatriated. During the quarter, OSG repatriated approximately $545 million in cash from its foreign subsidiaries, principally to repay a portion of its outstanding long-term revolving credit debt.

Future Locked-in Revenue. Future revenues associated with noncancelable term charters as of June 30, 2008 totaled $1.6 billion including time charters entered into by the Aframax International pool and fixed rate contracts of affreightment from the U.S. Flag lightering operation. Additionally, future revenues from term contracts of the Gas segment and the FSO project total approximately $1.8 billion and will be recognized in equity in income from affiliated companies.

RECENT ACTIVITIES AND QUARTERLY EVENTS

Crude Oil Tankers

Vessel Deliveries

On April 23, 2008, OSG time chartered in the Mare Salernum, a 111,000 dwt Aframax tanker for two years through 2010. OSG has a 40% interest in the vessel, which began trading in the Aframax International commercial pool upon delivery.

On May 7, 2008 and June 16, 2008, the Peak and the Wind, two 116,000 dwt Aframax tankers, delivered to OSG, respectively. OSG has a 50% interest in both vessels, which have been time chartered in through May and June 2011. The vessels joined the Aframax International commercial pool upon delivery, bringing the pool's aggregate vessel count to 46.

Vessel Sales and Purchases

On May 15, 2008, the Company sold the Pacific Ruby, a 1994-built Aframax tanker. The Company recognized a gain of approximately $13.0 million at the time of sale.

In May 2008, a joint venture arrangement that was constructing two VLCC newbuilds was terminated. In connection therewith, one of the two joint venture subsidiaries, which was constructing the (TBN) Overseas Everest, a 297,000 dwt tanker, was distributed to the Company. The vessel, scheduled to deliver in the first quarter of 2010, is now 100% owned by OSG.

On July 17, 2008, OSG entered into an agreement to purchase two 298,000 dwt VLCC tankers to be built at Dalian Shipbuilding Industry Co, Ltd. The vessels, scheduled for delivery in June and October of 2011, will join the Tankers International pool upon delivery.

Commercial Pools

On June 2, 2008, OSG announced the formation of Suezmax International, a commercial pool initially consisting of four Suezmax tankers, with Seaarland Shipping Management B.V., a privately held shipping company based in Amsterdam, the Netherlands. In addition, seven newbuild Suezmax tankers are expected to join the pool upon their expected delivery dates. Four 156,000 dwt sister ships under construction at Jiangsu Rongsheng Heavy Industries Group in Nantong, China are expected to deliver commencing in 2009, two chartered in by OSG and two by Seaarland. Seaarland has also ordered three 165,000 dwt sister ships at Hyundai Heavy Industries, South Korea, that are expected to deliver in the second, third and fourth quarters of 2011. The formation of Suezmax International follows OSG's successful strategy of building scale in key trading areas to provide superior, reliable service to its customers. Seaarland has been a long-term member in another commercial pool OSG participates in, Aframax International.

As a result of strong market conditions, in the last two months Aframax International has time chartered in seven modern Aframax tankers for one year each. The pool, which OSG commercially manages and has a 43% interest in, continues to focus on growing its fleet, expanding its cargo systems and strengthening its trading position in the Atlantic Basin. The Aframax International pool is expected to reach 50 vessels by the end of 2008.

Product Carriers

Vessel Deliveries

On June 17, 2008, OSG took delivery of the Overseas Sifnos, a 50,000 dwt Handysize product carrier, under a 10-year bareboat charter-in arrangement. OSG has a 100% interest in the vessel.

On May 2, 2008 and June 5, 2008, OSG took delivery of the Atlantic Aquarius and Atlantic Leo, respectively, two 47,000 dwt Handysize product carriers, each under a seven-year time charter-in arrangement. OSG has a 100% interest in both vessels and has renewal options exercisable at the end of each vessel's charter.

Vessel Sale and Redelivery

On April 17, 2008, the Company sold the Overseas Aquamar, a 1998-built Handysize product carrier. The Company recognized a gain of approximately $9.9 million at the time of sale.

On July 16, 2008, the Overseas Uranus, a 1988-built bareboat chartered-in Handysize Product Carrier was redelivered.

U.S. Fleet

Vessel Deliveries

On April 11, 2008, OSG America took delivery of the Overseas New York, a 46,817 dwt U.S. Flag Jones Act Product Carrier. The vessel is on a seven-year bareboat charter-in arrangement and the Company has extension options for the life of the vessel. The vessel has been chartered out to Shell for three years and began trading on April 21, 2008.

On April 24, 2008, OSG America took delivery of the OSG 243, an ATB that has been converted from single hull to double hull.

Fleet Activity

On June 25, 2008, OSG America L.P. a master limited partnership in which the Company owns a 75.5% interest, purchased the Overseas Philadelphia and New Orleans, which were previously bareboat-chartered in and classified as capital leases.

Vessel Sale

On May 21, 2008, the Company sold the M215, its last remaining single hull ATB. A gain of $745 thousand was recognized upon the sale of the vessel.

FLEET METRICS AND CORPORATE STATISTICS

As of June 30, 2008, OSG's owned or operated fleet totaled 121 International Flag and U.S. Flag vessels compared with 107 at June 30, 2007. Fifty percent, or 60 vessels, were owned as of June 30, 2008, with the remaining vessels bareboat or time chartered in. OSG's newbuild program of chartered-in and owned vessels totaled 35 vessels across its Crude Oil, Product and U.S. Flag lines of business. A detailed fleet list and updates on vessels under construction can be found in the Fleet section of www.osg.com.

Revenue days in the quarter ended June 30, 2008 totaled 9,648 compared with 8,704 in the same period a year earlier. The increase principally reflects the addition of 14 vessels since June 30, 2007. Revenue days by segment can be found in Spot and Fixed TCE Rates Achieved and Revenue Days, later in this press release.

FINANCIAL PROFILE

At June 30, 2008, stockholders' equity approximately $1.9 billion and liquidity, including undrawn bank facilities, exceeded $1.6 billion. Total long-term debt as of June 30, 2008 was $1.2 billion, down more than $300 million from December 31, 2007. Liquidity adjusted debt to capital was 32.4% as of June 30, 2008, substantially unchanged from 32.6% as of December 31, 2007. Liquidity adjusted debt is defined as long-term debt reduced by cash and the Capital Construction Fund.

SPOT AND FIXED TCE RATES ACHIEVED AND REVENUE DAYS

The following table provides a breakdown of TCE rates achieved for the three months ended June 30, 2008 and 2007 for the International Crude Oil and Product Carrier segments between spot and fixed charter rates and the related revenue days. The Company has entered into FFAs and related bunker swaps as hedges against the volatility of earnings from operating the Company's VLCCs and Aframaxes in the spot market. These derivative instruments create synthetic time charters because their impact is to effectively lock in a level of TCE earnings. From the perspective of a vessel owner such as the Company, the results of these synthetic time charters are substantially equivalent to results from time chartering vessels in the physical market. The impact of these derivatives, which qualify for hedge accounting treatment under FAS 133, are now reported together with time charters entered in the physical market under "Fixed Earnings." The information in these tables is based, in part, on information provided by the pools or commercial joint ventures in which the segment's vessels participate.

                 Three Months Ended Jun.   Three Months Ended Jun. 30,
                          30, 2008                     2007
                 -----------------------------------------------------
                   Spot    Fixed             Spot     Fixed
                 Earnings Earnings  Total   Earnings  Earnings  Total
----------------------------------------------------------------------
Business Unit -
 Crude Oil
----------------------------------------------------------------------
VLCC(1)
 Average TCE
  Rate            $98,747  $73,832           $54,353       $--
 Number of
  Revenue Days        819      609   1,428     1,377        --   1,377
Suezmax
 Average TCE
  Rate            $61,098      $--               $--       $--
 Number of
  Revenue Days        182       --     182        --        --      --
Aframax
 Average TCE
  Rate            $55,543  $30,235           $31,797   $29,348
 Number of
  Revenue Days        819      325   1,144       612       530   1,142
Aframax -
 Lightering
 Average TCE
  Rate            $30,717      $--           $32,764       $--
 Number of
  Revenue Days        656       --     656       523        --     523
Panamax(2)
 Average TCE
  Rate            $35,625  $26,492           $34,287   $24,573
 Number of
  Revenue Days        544      452     996       390       527     917
Other Crude Oil
 Revenue Days         182       --     182       182        --     182
                 -----------------------------------------------------
Total Crude Oil
 Revenue Days       3,266    1,322   4,588     3,084     1,057   4,141
----------------------------------------------------------------------
Business Unit - Refined Petroleum
 Products
----------------------------------------------------------------------
Panamax
 Average TCE
  Rate            $35,140  $18,625               $--   $18,761
 Number of
  Revenue Days        182      180     362        --       182     182
Handysize
 Average TCE
  Rate            $25,131  $20,799           $29,785   $18,998
 Number of
  Revenue Days      1,031    1,811   2,842       725     1,850   2,575
                 -----------------------------------------------------
Total Refined
 Pet. Products
 Rev. Days          1,213    1,991   3,204       725     2,032   2,757
----------------------------------------------------------------------
Business Unit -
 U.S. Flag
----------------------------------------------------------------------
Number of
 Revenue Days         632      951   1,583       668       956   1,624
----------------------------------------------------------------------
Other - Number
 of Revenue Days       --      273     273        --       182     182
----------------------------------------------------------------------
TOTAL REVENUE
 DAYS               5,111    4,537   9,648     4,477     4,227   8,704
----------------------------------------------------------------------

(1)Excludes ULCCs. The revenue days for the ULCCs are included in Other Crude Oil. (2)Includes one vessel performing a bareboat charter out during the three months ended June 30, 2008.

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except
 per share amounts)      Three Months Ended       Six Months Ended
                       -----------------------------------------------
                        Jun. 30,    Jun. 30,    Jun. 30,    Jun. 30,
                          2008        2007        2008        2007
                       -----------------------------------------------
Shipping Revenues:
Pool revenues            $244,182    $138,973    $469,182    $276,776
Time and bareboat
 charter revenues          90,374      90,447     182,861     175,381
Voyage charter revenues    93,668      70,577     186,857     123,124
                       -----------------------------------------------
                          428,224     299,997     838,900     575,281
                       -----------------------------------------------
Operating Expenses:
Voyage expenses            42,110      25,763      76,952      41,863
Vessel expenses            77,785      68,858     150,654     129,672
Charter hire expenses     103,368      67,949     194,039     117,365
Depreciation and
 amortization              47,315      44,099      94,906      86,582
General and
 administrative            34,509      31,687      71,794      60,725
Gain on disposal of
 vessels                  (23,686)     (5,623)    (23,691)     (5,620)
                       -----------------------------------------------
Total Operating
 Expenses                 281,401     232,733     564,654     430,587
                       -----------------------------------------------
Income from Vessel
 Operations               146,823      67,264     274,246     144,694
Equity in Income of
 Affiliated Companies       4,048       2,885       5,377       6,269
                       -----------------------------------------------
Operating Income          150,871      70,149     279,623     150,963
Other Income/(Expense)    (46,404)     34,290     (43,435)     57,048
                       -----------------------------------------------
                          104,467     104,439     236,188     208,011
Interest Expense           17,191      18,281      35,554      31,449
                       -----------------------------------------------
Income before Minority
 Interest and Income
 Taxes                     87,276      86,158     200,634     176,562
Minority interest          (1,112)         --      (2,035)         --
                       -----------------------------------------------
Income before Income
 Taxes                     86,164      86,158     198,599     176,562
(Provision)/Credit for
 Income Taxes                 771      (7,166)        771     (12,918)
                       -----------------------------------------------
Net Income                $86,935     $78,992    $199,370    $163,644
                       ===============================================

Weighted Average Number
 of Common Shares
 Outstanding:
 Basic                 30,615,359  34,404,900  30,861,429  36,733,878
 Diluted               30,895,367  34,622,798  31,072,727  36,895,084
Per Share Amounts:
 Basic net income           $2.84       $2.30       $6.46       $4.45
 Diluted net income         $2.81       $2.28       $6.42       $4.44
 Cash dividends
  declared                  $0.75     $0.5625     $1.0625     $0.8125

TCE REVENUE BY SEGMENT

The following table reflects TCE revenues generated by the Company's three reportable segments for the three and six months ended June 30, 2008 and 2007 and excludes the Company's proportionate share of TCE revenues of affiliated companies. See Appendix 1 for reconciliations of Time Charter Equivalent Revenues to Shipping Revenues.

                                         Three Months Ended Jun. 30,
                                       -------------------------------
                                                % of            % of
($ in thousands)                         2008    Total   2007    Total
----------------------------------------------------------------------
International Flag
  Crude Tankers                        $254,950   66.0 $160,310   58.5
  Product Carriers                       71,597   18.6   59,223   21.6
  Other                                   7,887    2.0    5,933    2.1
U.S.                                     51,680   13.4   48,768   17.8
                                       -------------------------------
Total TCE Revenues                     $386,114  100.0 $274,234  100.0
                                       ===============================

                                          Six Months Ended Jun. 30,
                                       -------------------------------
                                                 % of            % of
($ in thousands)                          2008    Total   2007   Total
----------------------------------------------------------------------
International Flag
  Crude Tankers                         $503,810   66.1 $307,112  57.6
  Product Carriers                       138,004   18.1  117,121  22.0
  Other                                   15,666    2.1   10,815   2.0
U.S.                                     104,468   13.7   98,370  18.4
                                       -------------------------------
Total TCE Revenues                      $761,948  100.0 $533,418 100.0
                                       ===============================

INCOME FROM VESSEL OPERATIONS BY SEGMENT

The following table reflects income from vessel operations for the three and six months ended June 30, 2008 and 2007 accounted for by each reportable segment. Income from vessel operations is before general and administrative expenses, gain on disposal of vessels and the Company's share of income from affiliated companies.

                                          Three Months Ended Jun. 30,
                                         -----------------------------
                                                  % of           % of
($ in thousands)                           2008    Total  2007   Total
----------------------------------------------------------------------
International Flag
  Crude Tankers                          $135,345   85.9 $68,891  73.8
  Product Carriers                         15,972   10.1  13,874  14.9
  Other                                     2,084    1.3   1,258   1.3
U.S.                                        4,245    2.7   9,305  10.0
                                         -----------------------------
Total Income from Vessel Operations      $157,646  100.0 $93,328 100.0
                                         =============================

                                          Six Months Ended Jun. 30,
                                      --------------------------------
                                                % of            % of
($ in thousands)                         2008    Total   2007    Total
----------------------------------------------------------------------
International Flag
  Crude Tankers                        $271,850   84.3 $145,132   72.6
  Product Carriers                       31,348    9.7   30,457   15.2
  Other                                   4,464    1.4    1,415    0.8
U.S.                                     14,687    4.6   22,795   11.4
                                      --------------------------------
Total Income from Vessel Operations    $322,349  100.0 $199,799  100.0
                                      ================================

Reconciliations of income from vessel operations of the segments to income before income taxes as reported in the consolidated statements of operations follow:

                                Three Months Ended  Six Months Ended
                                     Jun. 30,            Jun. 30,
                                --------------------------------------
($ in thousands)                  2008     2007      2008      2007
----------------------------------------------------------------------
Total income from vessel
 operations of all segments     $157,646  $93,328  $322,349  $199,799
General and administrative
 expenses                        (34,509) (31,687)  (71,794)  (60,725)
Gain on disposal of vessels       23,686    5,623    23,691     5,620
                                --------------------------------------
Consolidated income from vessel
 operations                      146,823   67,264   274,246   144,694
Equity in income of affiliated
 companies                         4,048    2,885     5,377     6,269
Other income/(expense)           (46,404)  34,290   (43,435)   57,048
Interest expense                 (17,191) (18,281)  (35,554)  (31,449)
Minority Interest                 (1,112)      --    (2,035)       --
                                --------------------------------------
Income before federal income
 taxes                           $86,164  $86,158  $198,599  $176,562
                                ======================================

CONSOLIDATED BALANCE SHEETS

                                                  Jun. 30,   Dec. 31,
($ in thousands)                                    2008       2007
                                                 ---------------------
ASSETS
Current Assets:
Cash and cash equivalents                          $219,524   $502,420
Voyage receivables                                  252,452    180,406
Other receivables, including income taxes
 recoverable                                         83,447     84,627
Inventories, prepaid expenses and other current
 assets                                              66,504     37,300
                                                 ---------------------
 Total Current Assets                               621,927    804,753
Capital Construction Fund                           103,639    151,174
Vessels and other property, less accumulated
 depreciation                                     2,706,499  2,691,005
Vessels under capital leases, less accumulated
 amortization                                         2,151     24,399
Vessels held for sale                                48,819          -
Deferred drydock expenditures, net                   83,629     81,619
                                                 ---------------------
 Total Vessels, Deferred Drydock and Other
  Property                                        2,841,098  2,797,023
                                                 ---------------------
Investments in Affiliated Companies                  86,446    131,905
Intangible Assets, less accumulated amortization    110,333    114,077
Goodwill                                             72,463     72,463
Other Assets                                        154,235     87,522
                                                 ---------------------
 Total Assets                                    $3,990,141 $4,158,917
                                                 =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, sundry liabilities and accrued
 expenses                                          $195,802   $178,837
Current installments of long-term debt               26,143     26,058
Current obligations under capital leases              2,102      8,406
                                                 ---------------------
 Total Current Liabilities                          224,047    213,301
Long-term Debt                                    1,229,654  1,506,396
Obligations under Capital Leases                         30     24,938
Deferred Gain on Sale and Leaseback of Vessels      169,629    182,076
Deferred Income Taxes and Other Liabilities         341,138    281,711
Minority Interest                                   130,279    132,470
Stockholders' Equity                              1,895,364  1,818,025
                                                 ---------------------
 Total Liabilities and Stockholders' Equity      $3,990,141 $4,158,917
                                                 =====================

CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                    Six Months Ended
($ in thousands)                                         Jun. 30,
                                                   -------------------
                                                     2008      2007
                                                   -------------------
Cash Flows from Operating Activities:
Net income                                         $199,370  $163,644
Items included in net income not affecting cash
 flows:
  Depreciation and amortization                      94,906    86,582
  Amortization of deferred gain on sale and
   leasebacks                                       (24,510)  (23,561)
  Deferred compensation relating to restricted
   stock and
    stock option grants                               6,104     4,606
  Provision for deferred income taxes                 1,437     5,668
  Unrealized losses on forward freight agreements
   and bunker swaps                                  29,500     2,310
  Undistributed earnings of affiliated companies        379     7,717
  Other - net                                        (3,506)    1,357
Items included in net income related to investing
 and financing activities:
  (Gain)/loss on sale of securities - net                 6   (41,285)
  Gain on disposal of vessels                       (23,691)   (5,620)
Payments for drydocking                             (27,613)  (24,690)
Distributions from subsidiaries to minority owners   (4,168)       --
Changes in operating assets and liabilities        (156,485)  (43,379)
                                                   -------------------
     Net cash provided by operating activities       91,729   133,349
                                                   -------------------
Cash Flows from Investing Activities:
Purchases of marketable securities                  (11,311)       --
Expenditures for vessels                           (252,260) (149,991)
Withdrawals from Capital Construction Fund           49,830   106,700
Proceeds from disposal of vessels                   216,884   117,548
Acquisition of Heidmar Lightering                        --   (38,375)
Expenditures for other property                      (7,207)   (4,848)
Investments in and advances to affiliated
 companies                                           (5,734)  (27,934)
Proceeds from disposal of investments in
 affiliated companies                                    --   194,815
Distributions from affiliated companies              19,960        --
Other - net                                               3       367
                                                   -------------------
     Net cash provided by investing activities       10,165   198,173
                                                   -------------------
Cash Flows from Financing Activities:
Purchases of treasury stock                         (57,551) (427,618)
Issuance of debt, net of issuance costs              59,000   267,000
Payments on debt and obligations under capital
 leases                                            (366,875)  (17,680)
Cash dividends paid                                 (19,385)  (18,163)
Issuance of common stock upon exercise of stock
 options                                                398       317
Other - net                                            (377)      (20)
                                                   -------------------
     Net cash used in financing activities         (384,790) (196,164)
                                                   -------------------
Net increase/(decrease) in cash and cash
 equivalents                                       (282,896)  135,358
Cash and cash equivalents at beginning of year      502,420   606,758
                                                   -------------------
Cash and cash equivalents at end of period         $219,524  $742,116
                                                   ===================

FLEET

On June 30, 2008, OSG's fleet totaled 156 vessels, including 35 newbuilds, aggregating 15.3 million deadweight tons and 865,000 cbm of LNG carrier capacity. Adjusted for OSG's participation interest in joint ventures and chartered-in vessels, the fleet totaled 145 vessels. See the Company's website at www.osg.com for a detailed fleet list, which is updated on a quarterly basis upon release of earnings.

                                                          Vessels
Vessel Type                           Vessels Owned     Chartered-in
----------------------------------------------------------------------
                                            Weighted         Weighted
                                                by               by
Operating Fleet                      Number Ownership Number Ownership
----------------------------------------------------------------------
VLCC (including ULCC)                    10      10.0     10       7.5
Suezmax                                  --        --      2       2.0
Aframax                                   4       4.0     15      10.0
Panamax                                   9       9.0      2       2.0
Lightering                                2       2.0      2       1.0
                                     ---------------------------------
International Flag Crude Tankers         25      25.0     31      22.5
Panamax Product Carriers                  4       4.0     --        --
Handysize Product Carriers(1)            10      10.0     24      24.0
                                     ---------------------------------
International Flag Product Carriers      14      14.0     24      24.0
Car Carrier                               1       1.0     --        --
International Bulk Carriers              --        --      2       2.0
                                     ---------------------------------
International Flag Other                  1       1.0      2       2.0
----------------------------------------------------------------------
Total Int'l Flag Operating Fleet         40      40.0     57      48.5
----------------------------------------------------------------------
Handysize Product Carriers                5       5.0      4       4.0
Clean ATBs                                8       8.0     --        --
Lightering:
   Crude Carrier                          1       1.0     --        --
   ATBs                                   2       2.0     --        --
----------------------------------------------------------------------
Total U.S. Flag Operating Fleet          16      16.0      4       4.0
----------------------------------------------------------------------
LNG Carriers                              4       2.0     --        --
----------------------------------------------------------------------

TOTAL OPERATING FLEET
                                         60      58.0     61      52.5
----------------------------------------------------------------------
Newbuild Fleet
----------------------------------------------------------------------
International Flag
  VLCC                                    1       1.0           --  --
 Suezmax                                 --        --            2 2.0
   Aframax                                4       4.0           --  --
 Panamax Product Carriers                 6       6.0           --  --
   Handysize Product Carriers             2       2.0            6 6.0
U.S. Flag
  Product Carriers                       --        --            8 8.0
  Clean ATBs                              3       3.0           --  --
  Lightering ATBs                         3       3.0           --  --
----------------------------------------------------------------------
TOTAL NEWBUILD FLEET                     19      19.0           1616.0
----------------------------------------------------------------------
TOTAL OPERATING AND NEWBUILD FLEET       79      77.0           7768.5
                                     ---------------------------------

Vessel Type                                Total at Jun. 30, 2008
----------------------------------------------------------------------
                                                  Vessels
                                                 Weighted
                                         Total       by      Total
Operating Fleet                          Vessels Ownership    Dwt
----------------------------------------------------------------------
VLCC (including ULCC)                         20      17.5  6,398,415
Suezmax                                        2       2.0    317,000
Aframax                                       19      14.0  2,064,675
Panamax                                       11      11.0    764,083
Lightering                                     4       3.0    346,924
                                       -------------------------------
International Flag Crude Tankers              56      47.5  9,891,097
Panamax Product Carriers                       4       4.0    290,527
Handysize Product Carriers(1)                 34      34.0  1,510,281
                                       -------------------------------
International Flag Product Carriers           38      38.0  1,800,808
Car Carrier                                    1       1.0     16,101
International Bulk Carriers                    2       2.0    319,843
                                       -------------------------------
International Flag Other                       3       3.0    335,944
----------------------------------------------------------------------
Total Int'l Flag Operating Fleet              97      88.5 12,027,849
----------------------------------------------------------------------
Handysize Product Carriers                     9       9.0    414,312
Clean ATBs                                     8       8.0    226,064
Lightering:
   Crude Carrier                               1       1.0     39,948
   ATBs                                        2       2.0     90,908
----------------------------------------------------------------------
Total U.S. Flag Operating Fleet               20      20.0    771,232
----------------------------------------------------------------------
                                                            864, 800
LNG Carriers                                   4       2.0        cbm
----------------------------------------------------------------------
                                                           12,799,081
TOTAL OPERATING FLEET
                                             121     110.5 864,800cbm
----------------------------------------------------------------------
Newbuild Fleet
----------------------------------------------------------------------
International Flag
  VLCC                                              1  1.0    297,000
 Suezmax                                            2  2.0    312,000
   Aframax                                          4  4.0    456,000
 Panamax Product Carriers                           6  6.0    441,000
   Handysize Product Carriers                       8  8.0    389,350
U.S. Flag
  Product Carriers                                  8  8.0    374,520
  Clean ATBs                                        3  3.0    111,561
  Lightering ATBs                                   3  3.0    136,668
----------------------------------------------------------------------
TOTAL NEWBUILD FLEET                               35 35.0  2,518,099
----------------------------------------------------------------------
                                                           15,317,180
                                                             864,800
TOTAL OPERATING AND NEWBUILD FLEET                156145.5        cbm
                                       -------------------------------

(1)Includes three owned U.S. Flag Product Carriers that trade internationally, thus associated revenue is included in the Product Carrier segment.

Average Age of International Operating Fleet

The Company believes its modern, well-maintained fleet is a significant competitive advantage in the global market. The table below reflects the average age of the Company's owned International Flag fleet compared with the world fleet.

                                    Average      Average
                                      Age of       Age of     Average
                                      OSG's        OSG's        Age of
                                      Owned        Owned        World
                                    Fleet at     Fleet at       Fleet
         Vessel Class                6/30/08      6/30/07  at 6/30/08*
----------------------------------------------------------------------
   VLCC (including ULCC)           7.4 years    6.4 years    8.5 years
   Aframax                         9.0 years    8.7 years    8.7 years
   Panamax**                       4.8 years    4.3 years    8.6 years
   Handysize                       5.9 years    5.6 years    9.1 years

*Source: Clarkson database as of July 1, 2008.

**Includes Panamax tankers that trade crude oil and refined petroleum products.

Off hire, Scheduled Drydock and Double Hull Rebuilds

In addition to regular inspections by OSG personnel, all vessels are subject to periodic drydock, special survey and other scheduled maintenance. The table below sets forth actual days off hire for the second quarter of 2008 and anticipated days off hire for the above-mentioned events by class for the third and fourth quarters of 2008. OSG completed double hulling an ATB, the OSG 243, in April 2008 as detailed in the U.S. section of Recent Activities and Quarterly Events earlier in this press release.

                                            Actual
                                             Days     Projected Days
                                           Off-Hire      Off-Hire
----------------------------------------------------------------------
                                             Q208      Q308     Q408
----------------------------------------------------------------------
Business Unit -- Crude Oil
----------------------------------------------------------------------
VLCC (including ULCC)                             35       23       22
Suezmax                                           --        2        8
Aframax (including Lightering)                    62       66       84
Panamax                                            5        7       31
----------------------------------------------------------------------
Business Unit -- Refined Petroleum Products
----------------------------------------------------------------------
Panamax                                            2       --        5
Handysize                                         95      116       72
----------------------------------------------------------------------
Business Unit -- U.S. Flag
----------------------------------------------------------------------
Product Carrier                                  117        5       72
ATB                                              109      110        7
----------------------------------------------------------------------
Other                                             --       --       --
----------------------------------------------------------------------
                  Total                          425      329      301
----------------------------------------------------------------------

APPENDIX 1 - TCE RECONCILIATION

Reconciliations of time charter equivalent revenues of the segments to shipping revenues as reported in the consolidated statements of operations follow:

                                     Three Months    Six Months Ended
                                     Ended Jun. 30,       Jun. 30,
                                   -----------------------------------
($ in thousands)                     2008     2007     2008     2007
----------------------------------------------------------------------
Time charter equivalent revenues   $386,114 $274,234 $761,948 $533,418
Add: Voyage Expenses                 42,110   25,763   76,952   41,863
                                   -----------------------------------
Shipping revenues                  $428,224 $299,997 $838,900 $575,281
                                   ===================================

Consistent with general practice in the shipping industry, the Company uses time charter equivalent revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance.

APPENDIX 2 - EBITDA RECONCILIATION

The following table shows reconciliations of net income, as reflected in the consolidated statements of operations, to EBITDA:

                                Three Months Ended  Six Months Ended
                                     Jun. 30,            Jun. 30,
                                --------------------------------------
($ in thousands)                  2008     2007      2008      2007
----------------------------------------------------------------------
Net income                       $86,935   $78,992 $199,370  $163,644
Provision/(credit) for income
 taxes                              (771)    7,166     (771)   12,918
Interest expense                  17,191    18,281   35,554    31,449
Depreciation and amortization    $47,315   $44,099  $94,906    86,582
                                --------------------------------------
EBITDA                          $150,670  $148,538 $329,059  $294,593
                                ======================================

EBITDA represents operating earnings, which is before interest expense and income taxes, plus other income and depreciation and amortization expense. EBITDA is presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. EBITDA should not be considered a substitute for net income or cash flow from operating activities prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. While EBITDA is frequently used as a measure of operating results and performance, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.

APPENDIX 3 - CAPITAL EXPENDITURES

The following table presents information with respect to OSG's capital expenditures for the three and six months ended June 30, 2008 and 2007:

                                     Three Months    Six Months Ended
                                     Ended Jun. 30,       Jun. 30,
                                   -----------------------------------
($ in thousands)                     2008     2007     2008     2007
----------------------------------------------------------------------
Expenditures for vessels           $107,818  $92,318 $252,260 $149,991
Investments in and advances to
 affiliated companies                 4,551    2,065    5,734   27,934
Payments for drydockings             11,555   16,852   27,613   24,690
                                   -----------------------------------
                                   $123,924 $111,235 $285,607  202,615
                                   ===================================

APPENDIX 4 -THIRD QUARTER 2008 TCE RATES

The Company has achieved the following average estimated TCE rates for the third quarter of 2008 for the percentage of days booked for vessels operating through July 18, 2008. The information is based, in part, on information provided by the pools or commercial joint ventures in which the vessels participate. All numbers provided are estimates and may be adjusted for a number of reasons, including the timing of any vessel acquisitions or disposals and the timing and length of drydocks and repairs. In addition, information presented for VLCCs and Aframaxes as fixed includes management's expectations with respect to the synthetic time charters entered into by the Company. The actual average TCE rates achieved for these synthetic time charters may differ, possibly substantially, from the expected rates shown in the table below.

                                       Third Quarter Revenue
                                                 Days
                                       -----------------------
                              Average  Fixed as Open as
                                  TCE       of       of        % Days
Vessel Class and Charter Type    Rates  7/18/08  7/18/08 Total  Booked
----------------------------------------------------------------------
Business Unit - Crude Oil
----------------------------------------------------------------------
VLCC - Spot                   $143,500      483      541 1,024     47%
VLCC - Fixed                   $55,500      450       --   450    100%
Suezmax - Spot                 $69,500       76      106   182     42%
Aframax - Spot                 $54,000      316      562   878     36%
Aframax - Fixed                $33,000      275       --   275    100%
Aframax Lightering - Spot      $38,500      192      417   609     32%
Panamax - Spot                 $41,000      128      417   545     23%
Panamax - Time                 $28,000      460       --   460    100%
----------------------------------------------------------------------
Business Unit - Refined
 Petroleum Products
----------------------------------------------------------------------
Panamax - Spot                 $41,000       43      141   184     23%
Panamax - Time                 $19,000      184       --   184    100%
Handysize - Spot               $31,500      427      574 1,001     43%
Handysize - Time               $19,500    1,943       -- 1,943    100%
----------------------------------------------------------------------
 Business Unit - U.S. Flag
----------------------------------------------------------------------
 Product Carrier - Spot        $37,500       58       29    87     67%
 Product Carrier - Time        $39,500      656       --   656    100%
 ATB - Spot                    $36,000       58      262   320     18%
 ATB - Time                    $29,500      368       --   368    100%

APPENDIX 5 - FOURTH QUARTER 2008, 2009 AND 2010 FIXED TCE RATES

The following table shows average estimated TCE rates and associated days booked as of July 18, 2008 for the fourth quarter of 2008. Rates and revenue days for VLCCs and Aframaxes include management's expectations with respect to the synthetic time charters entered into by the Company. The actual TCE rates achieved for these synthetic time charters may differ, possibly substantially, from the expected rates shown in the table below.

                                             Fixed Rates and Revenue
                                                   Days as of 7/18/08
----------------------------------------------------------------------
Business Unit - Crude Oil
----------------------------------------------------------------------
VLCC
 Average Synthetic TCE Rate                                   $69,836
 Number of Revenue Days                                           539
Suezmax
 Average TCE Rate                                                  --
 Number of Revenue Days                                            --
Aframax
 Average TCE Rate                                             $30,000
 Number of Revenue Days                                           275
Panamax
 Average TCE Rate                                             $28,000
 Number of Revenue Days                                           415
----------------------------------------------------------------------
Business Unit - Refined Petroleum Products
----------------------------------------------------------------------
Panamax
 Average TCE Rate                                             $19,000
 Number of Revenue Days                                           184
Handysize
 Average TCE Rate                                             $18,500
 Number of Revenue Days                                         1,454
----------------------------------------------------------------------
Business Unit - U.S. Flag
----------------------------------------------------------------------
Product Carrier
 Average TCE Rate                                             $40,500
 Number of Revenue Days                                           644
ATB
 Average TCE Rate                                             $31,000
 Number of Revenue Days                                           229

The following table provides management's expectations with respect to the estimated synthetic TCE rates to be achieved and the related revenue days for periods beyond 2008 when those derivative positions that qualify as cash flow hedges for accounting purposes will affect the Company's earnings:

                                     Year Ending        Year Ending
                                    Dec. 31, 2009    Dec. 31, 2010(1)
                                 ------------------- -----------------
VLCC
     Average Estimated TCE Rate              $62,567           $61,240
     Number of Revenue Days                    3,173               276

(1) The revenue days relate to the first quarter of 2010.

EARNINGS CONFERENCE CALL INFORMATION

OSG has scheduled a conference call for Wednesday July 30, 2008 at 11:00 a.m. ET. Call-in information is (800) 762-8779 (domestic) and (480) 248-5081 (international). The conference call and supporting presentation can also be accessed by webcast, which will be available at www.osg.com in the Investor Relations Webcasts and Presentations section. Additionally, a replay of the call will be available by telephone until August 5, 2008; the number for the replay is (800) 406-7325 (domestic) and (303) 590-3030 (international). The passcode for the replay is 3889005.

ABOUT OSG

Overseas Shipholding Group, Inc. (NYSE: OSG), a Dow Jones Transportation Index company, is one of the largest publicly traded tanker companies in the world. As a market leader in global energy transportation services for crude oil and petroleum products in the U.S. and International Flag markets, OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world's most customer-focused marine transportation companies and is headquartered in New York City, NY. More information is available at www.osg.com.

FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements regarding the Company's prospects, including the outlook for tanker and articulated tug barge markets, changing oil trading patterns, anticipated levels of newbuilding and scrapping, prospects for certain strategic alliances and investments, prospects for the growth of the OSG Gas transport business, estimated TCE rates achieved for the third quarter of 2008, estimated TCE rates and synthetic time charter rates for the fourth quarter of 2008 and estimated synthetic time charter rates for the year ending December 31, 2009 and the first quarter of 2010, projected drydock and repair schedule, timely delivery of newbuildings and prospects of OSG's strategy of being a market leader in the segments in which it competes. Factors, risks and uncertainties that could cause actual results to differ from the expectations reflected in these forward-looking statements are described in the Company's Annual Report for 2007 on Form 10-K.

SOURCE: Overseas Shipholding Group, Inc.

OSG Ship Management, Inc.
Jennifer L. Schlueter, +1-212-578-1634
Vice President Corporate Communications
and Investor Relations
jschlueter@osg.com.