FRONTLINE PLC

“Global oil consumption averaged 102.8 million barrels per day (“mbpd”) in 2024 as compared to 101.8 mbpd in 2023 according to the EIA. Global oil supply grew by 0.6 mbpd as compared to 2023, averaging 102.8 mbpd in 2024.”

Annual report 2024A · The company itself

“Asia continues to be the source of demand growth, causing oil to travel further as the Middle Eastern members of OPEC retain a cap on production. Global oil supply is expected to outpace demand in 2025, and global oil inventories may increase if OPEC+ starts their planned unwinding of cuts in April 2025.”

Annual report 2024A · The company itself

“The war in Ukraine and in Israel and Gaza have continued to disrupt energy production and trade patterns, including shipping in the Black Sea, Red Sea and elsewhere, and its impact on energy demand and costs is expected to remain uncertain.”

Annual report 2024A · The company itself

“The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments supply and demand for oil and gas, actions by OPEC and other oil and gas producers, economic or other sanctions levied against oil and gas producing countries, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns.”

Annual report 2024A · The company itself

“Voyage expenses and commissions increased in the year ended December 31, 2024 as compared to the year ended December 31, 2023 primarily due to: • an increase of $254.6 million due to the acquisition of 24 VLCCs from CMB.TECH since January 1, 2023, • an increase of $13.1 million due to fluctuations in bunker prices, • an increase of $9.5 million due to the redelivery of two VLCCs from short-term time charters to voyage charters between January 2023 and December 2024, and • an increase of $8.5 million due to the costs incurred under the EU ETS from January 1, 2024.”

Annual report 2024A · The company itself

“We are engaged primarily in the ownership and operation of oil and product tankers.”

Annual report 2024A · The company itself

“We are engaged in transporting crude oil and its related refined petroleum products and our vessels operate in the spot and time charter markets.”

Annual report 2024A · The company itself

“We believe the softer demand growth can to a greater degree be explained by overall economic activity. In developed and mature economies, fuel tends to correlate to the general demand of other consumer goods, meaning oil and products demand will continue to be cyclical for many years to come.”

Annual report 2024A · The company itself

“Historically, market rates for charters of our vessels have been volatile. Periodic adjustments to the supply of and demand for oil and product tankers causes the industry to be cyclical in nature. We expect continued volatility in market rates for our vessels in the foreseeable future with a consequent effect on our short and medium term liquidity.”

Annual report 2024A · The company itself

“Our reliance on the spot market contributes to fluctuations in cash flows from operating activities as a result of its exposure to highly cyclical tanker rates. Any increase or decrease in the average TCE rates earned by our vessels will have a positive or negative comparative impact, respectively, on the amount of cash provided by operating activities.”

Annual report 2024A · The company itself

“TCE is therefore impacted by both movements in operating revenues, as determined by market freight rates, and voyage expenses, which are primarily comprised of bunker expenses, port charges and canal tolls. In 2024, average market quoted TCE rates decreased for VLCCs, Suezmax tankers and LR2 product tankers as compared to 2023, see “Market Overview and Trend Information” above. The net decrease in average quoted market rates led to a $136.7 million decrease in cash provided by operating activities for the year ended December 31, 2024.”

Annual report 2024A · The company itself

“The principal risks and uncertainties that the Company faces relate to tanker market volatility, ESG factors, operations, compliance, and cyber security as follows: Tanker market volatility Historically, the tanker industry has been highly cyclical, with volatility in profitability, charter rates and asset values resulting from changes in the supply of, and demand for, tanker capacity and changes in the supply of and demand for oil and oil products. These factors may adversely affect the rates payable and the amounts we receive in respect of our vessels.”

Annual report 2024A · The company itself

“Our revenues are affected by our strategy to employ some of our vessels on time charters, which have a fixed income for a pre-set period of time as opposed to trading ships in the spot market where their earnings are heavily impacted by the supply and demand balance. If we are not able to obtain new contracts in direct continuation with existing charters or for newly acquired vessels, or if new contracts are entered into at charter rates substantially below the existing charter rates or on terms otherwise less favorable compared to existing contracts terms, our revenues and profitability could be adversely affected.”

Annual report 2024A · The company itself

“• environmental concerns and uncertainty around new regulations in relation to, amongst others, new technologies which may delay the ordering of new vessels; and • government subsidies of shipbuilding. In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys, normal maintenance costs, insurance coverage costs, and the efficiency and age profile of the existing tanker fleet. The factors affecting the supply and demand for tankers have been volatile and are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable, including those discussed above.”

Annual report 2024A · The company itself

“We may face increasing pressures from investors, lenders and other market participants, who are focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards so that our existing and future investors and lenders remain invested in us and make further investments in us, especially given the highly focused and specific trade of crude oil transportation in which we are engaged. Such ESG corporate transformation calls for an increased resource allocation to serve the necessary changes in that sector, increasing costs and capital expenditure.”

Annual report 2024A · The company itself

“In addition, the entry into force, on January 1, 2020, of the 0.5% global sulfur cap in marine fuels used by vessels that are not equipped with sulfur oxide scrubbers under MARPOL Annex VI may lead to changes in the production quantities and prices of different grades of marine fuel by refineries and introduces an additional element of uncertainty in fuel markets, which could result in additional costs and adversely affect our cash flows, earnings and results from operations.”

Annual report 2024A · The company itself

“Environmental requirements can also affect the resale value or useful lives of our vessels, could require a reduction in cargo capacity, ship modifications or operational changes or restrictions, could lead to decreased availability of insurance coverage for environmental matters or could result in the denial of access to certain jurisdictional waters or ports or detention in certain ports. Under local, national and foreign laws, as well as international treaties and conventions, we could incur material liabilities, including clean-up obligations and natural resource damages liability, in the event that there is a release of hazardous materials from our vessels or otherwise in connection with our operations.”

Annual report 2024A · The company itself

“Additional or new conventions, laws and regulations may be adopted that could require, among others, the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition. Low sulfur fuel is more expensive than standard marine fuel containing 3.5% sulfur content and may become more expensive or difficult to obtain as a result of increased demand.”

Annual report 2024A · The company itself

“This long-term focus on operating a modern, energy efficient fleet has positioned it well to mitigate the risks and capitalize on the opportunities provided by the ever-increasing environmental laws and regulations.”

Annual report 2024A · The company itself

“As part of this strategy, Frontline continues to focus on operating a modern and energy-efficient fleet as demonstrated by the Acquisition and recent sales of its oldest vessels. As of December 31, 2024, all but one vessel in the Company's fleet were ECO vessels and 45 were scrubber-fitted vessels with a total average age of 6.6 years, making it one of the youngest and most energy-efficient fleets in the industry.”

Annual report 2024A · The company itself

“Geopolitical tension continued to affect the freight market, altering trading patterns and ton miles. The volume of oil exported from sanctioned countries has remained elevated in recent years, reaching 18.0% of all waterborne crude and condensate in the beginning of 2024.”

Annual report 2024A · The company itself

“With such a large part of the overall trade employing questionable actors, an astonishing 11.3% of the global VLCC, Suezmax tanker and Aframax/LR2 tanker fleet is reported to be sanctioned by the US Office of Foreign Asset Control (“OFAC”).”

Annual report 2024A · The company itself

“Entering 2025, there has been a material increase in the scope and enforcement of sanctions, as well as the willingness to comply. In early January 2025, the Shandong Port Authority publicly stated that it would not accommodate vessels on the OFAC list; a substantial move of self-sanctioning in what is an important oil import hub to China.”

Annual report 2024A · The company itself

“India, another key actor in this respect, followed suit, and, according to industry sources, this has initiated a positive reversal in oil trading patterns as these major importers shift their focus to compliant oil suppliers, increasing the demand for compliant tonnage. According to industry sources, there is also an increased demand for vessels that are not on the OFAC list, but willing to engage in the trade of Russian crude, further pulling capacity out of the compliant tanker market.”

Annual report 2024A · The company itself

“The war in Ukraine and in Israel and Gaza have continued to disrupt energy production and trade patterns, including shipping in the Black Sea, Red Sea and elsewhere, and its impact on energy demand and costs is expected to remain uncertain.”

Annual report 2024A · The company itself

“These risks include the possibility of: • loss of life or harm to seafarers; • a marine accident or disaster, bad weather and other acts of God; • environmental accidents and pollution, oil spills and toxic gas releases; • cargo and property losses or damage; and • business interruptions caused by mechanical failure, grounding, fire, explosions and collisions, unexpected tank corrosion and human error; and • attacks on vessels, including cyberattacks, drone and missile attacks, mining of waterways, war, terrorism, piracy, diseases, political action in various countries, tariffs, labor strikes and/or boycotts or adverse weather conditions. These hazards may result in death or injury to persons, loss of revenues or property, the payment of ransoms, environmental damage, higher insurance rates, damage to our customer relationships and market disruptions, delay or rerouting.”

Annual report 2024A · The company itself

“Compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil transported in tankers. Acts of piracy and other attacks have historically affected ocean-going vessels trading in certain regions of the world, such as the South China Sea, the Arabian Sea, the Red Sea, Suez Canal, the Gulf of Aden off the coast of Somalia, Sulu Sea, Celebes Sea, the Malacca and Singaporean Straits and the Indian Ocean and, in particular, the Gulf of Guinea region off the coast of Nigeria.”

Annual report 2024A · The company itself

“The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments supply and demand for oil and gas, actions by OPEC and other oil and gas producers, economic or other sanctions levied against oil and gas producing countries, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns.”

Annual report 2024A · The company itself

“Although we intend to maintain compliance with all applicable sanctions and embargo laws, and we endeavor to take precautions reasonably designed to mitigate such risks, it is possible that, in the future, our vessels may call on ports located in sanctioned countries or territories, or engage in other such transactions or dealings that would be violative of applicable sanctions, on charterers’ instructions and/or without our consent. If such activities result in a violation of sanctions or embargo laws, we could be subject to monetary fines, penalties, or other sanctions, and our reputation and the market for our ordinary shares could be adversely affected.”

Annual report 2024A · The company itself

“As a result of Russia’s actions in Ukraine and the war between Israel and Hamas, the U.S., EU and United Kingdom, together with numerous other countries, have imposed significant economic sanctions which may adversely affect our ability to operate in these regions and also restrict parties whose cargo we carry. Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations in 2024, 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.”

Annual report 2024A · The company itself

“We may face increasing pressures from investors, lenders and other market participants, who are focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards so that our existing and future investors and lenders remain invested in us and make further investments in us, especially given the highly focused and specific trade of crude oil transportation in which we are engaged. Such ESG corporate transformation calls for an increased resource allocation to serve the necessary changes in that sector, increasing costs and capital expenditure.”

Annual report 2024A · The company itself

“Additionally, certain investors and lenders may exclude oil transport companies, such as us, from their investing portfolios altogether due to ESG factors. These limitations in both the debt and equity capital markets may affect our ability to finance our plans for growth.”

Annual report 2024A · The company itself

“TCE is therefore impacted by both movements in operating revenues, as determined by market freight rates, and voyage expenses, which are primarily comprised of bunker expenses, port charges and canal tolls. In 2024, average market quoted TCE rates decreased for VLCCs, Suezmax tankers and LR2 product tankers as compared to 2023, see “Market Overview and Trend Information” above. The net decrease in average quoted market rates led to a $136.7 million decrease in cash provided by operating activities for the year ended December 31, 2024.”

Annual report 2024A · The company itself

“For vessels on voyage charters, fuel oil, or bunkers, is a significant, if not the largest, expense. Changes in the price of fuel may adversely affect our profitability to the extent we have vessels on voyage charters.”

Annual report 2024A · The company itself

“Asia continues to be the source of demand growth, causing oil to travel further as the Middle Eastern members of OPEC retain a cap on production. Global oil supply is expected to outpace demand in 2025, and global oil inventories may increase if OPEC+ starts their planned unwinding of cuts in April 2025.”

Annual report 2024A · The company itself

“Our VLCCs are specifically designed for the transportation of crude oil and, due to their size, are primarily used to transport crude oil from the Middle East Gulf to the Far East, Northern Europe, the Caribbean and the Louisiana Offshore Oil Port.”

Annual report 2024A · The company itself

“Our Suezmax tankers are similarly designed for worldwide trading, but the trade for these vessels is mainly in the Atlantic Basin, Middle East and Southeast Asia.”

Annual report 2024A · The company itself

“Our LR2/ Aframax tankers are designed to be flexible, able to transport primarily refined products, but also fuel and crude oil from smaller ports limited by draft restrictions. The vessels will normally trade between the larger refinery centers around the world, being the Gulf of Mexico, Middle East, Rotterdam and Singapore.”

Annual report 2024A · The company itself

“These risks include the possibility of: • loss of life or harm to seafarers; • a marine accident or disaster, bad weather and other acts of God; • environmental accidents and pollution, oil spills and toxic gas releases; • cargo and property losses or damage; and • business interruptions caused by mechanical failure, grounding, fire, explosions and collisions, unexpected tank corrosion and human error; and • attacks on vessels, including cyberattacks, drone and missile attacks, mining of waterways, war, terrorism, piracy, diseases, political action in various countries, tariffs, labor strikes and/or boycotts or adverse weather conditions. These hazards may result in death or injury to persons, loss of revenues or property, the payment of ransoms, environmental damage, higher insurance rates, damage to our customer relationships and market disruptions, delay or rerouting.”

Annual report 2024A · The company itself

“There will therefore be an increased demand for qualified crew and this has and will continue to put inflationary pressure on crew costs.”

Annual report 2024A · The company itself

“Ship operating expenses are the direct costs associated with running a vessel and include crew costs, vessel supplies, repairs and maintenance, lubricating oils and insurance.”

Annual report 2024A · The company itself

“We have experienced a softer demand growth as Chinese imports decreased. In addition to an overall reduction in volumes, industry sources also point to the surprising growth in Iranian exports, further reducing transportation demand in the compliant market, and softening the balance of the entire global oil trade.”

Annual report 2024A · The company itself

“Historically, oil trade and, therefore, charter rates increased in the winter months and eased in the summer months as demand for oil and oil products in the Northern Hemisphere rose in colder weather and fell in warmer weather. The tanker industry, in general, has become less dependent on the seasonal transport of heating oil than a decade ago as new uses for oil and oil products have developed, spreading consumption more evenly over the year.”

Annual report 2024A · The company itself

“The safety and security of our vessels and efficient operation of our business, including processing, transmitting and storing electronic and financial information, are dependent on computer hardware and software systems, which are increasingly vulnerable to security breaches and other disruptions. Any significant interruption or failure of our information systems or any significant breach of security could adversely affect our business and results of operations.”

Annual report 2024A · The company itself

“Significant global inflationary pressures (such as the war between Russia and the Ukraine) increase operating, voyage, general and administrative, and financing costs. Historically, shipping companies are accustomed to navigating in shipping downturns, coping with inflationary pressures and monitoring costs to preserve liquidity, as they typically encourage suppliers and service providers to lower rates and prices.”

Annual report 2024A · The company itself

“Ship operating expenses are the direct costs associated with running a vessel and include crew costs, vessel supplies, repairs and maintenance, lubricating oils and insurance.”

Annual report 2024A · The company itself

“Significant increases in interest rates could adversely affect operating margins, results of operations and ability to service debt.”

Annual report 2024A · The company itself

“We operate in a capital intensive industry and have historically financed our purchase of tankers and other capital expenditures through a combination of cash generated from operations, equity capital and borrowings from commercial banks. Our ability to generate adequate cash flows on a short and medium term basis depends substantially on the trading performance of our vessels in the market.”

Annual report 2024A · The company itself

“Our VLCCs are specifically designed for the transportation of crude oil and, due to their size, are primarily used to transport crude oil from the Middle East Gulf to the Far East, Northern Europe, the Caribbean and the Louisiana Offshore Oil Port.”

Annual report 2024A · The company itself

“Our Suezmax tankers are similarly designed for worldwide trading, but the trade for these vessels is mainly in the Atlantic Basin, Middle East and Southeast Asia.”

Annual report 2024A · The company itself

“Our LR2/ Aframax tankers are designed to be flexible, able to transport primarily refined products, but also fuel and crude oil from smaller ports limited by draft restrictions. The vessels will normally trade between the larger refinery centers around the world, being the Gulf of Mexico, Middle East, Rotterdam and Singapore.”

Annual report 2024A · The company itself

“Our VLCCs are specifically designed for the transportation of crude oil and, due to their size, are primarily used to transport crude oil from the Middle East Gulf to the Far East, Northern Europe, the Caribbean and the Louisiana Offshore Oil Port.”

Annual report 2024A · The company itself

“Our Suezmax tankers are similarly designed for worldwide trading, but the trade for these vessels is mainly in the Atlantic Basin, Middle East and Southeast Asia.”

Annual report 2024A · The company itself

“Our LR2/ Aframax tankers are designed to be flexible, able to transport primarily refined products, but also fuel and crude oil from smaller ports limited by draft restrictions. The vessels will normally trade between the larger refinery centers around the world, being the Gulf of Mexico, Middle East, Rotterdam and Singapore.”

Annual report 2024A · The company itself

“Voyage expenses and commissions increased in the year ended December 31, 2024 as compared to the year ended December 31, 2023 primarily due to: • an increase of $254.6 million due to the acquisition of 24 VLCCs from CMB.TECH since January 1, 2023, • an increase of $13.1 million due to fluctuations in bunker prices, • an increase of $9.5 million due to the redelivery of two VLCCs from short-term time charters to voyage charters between January 2023 and December 2024, and • an increase of $8.5 million due to the costs incurred under the EU ETS from January 1, 2024.”

Annual report 2024A · The company itself