Nordic American Tanker Shipping Ltd. (NAT)-(NYSE: NAT) Letter to Shareholders from the Chairman & CEO.

Market Wire, December, 2007

Letter to Shareholders from the Chairman & CEO

TECHNICAL AND COMMERCIAL OPERATIONS CONSOLIDATED - STRATEGIC CONSIDERATIONS AND COMPETITIVE STRENGTHS AT THE END OF 2007

Dear Shareholder,

When the year is drawing to a close, it is right for me to send you a letter wishing you all the best for the Holiday Season and commenting upon some pertinent aspects of our current business. NAT now has 14 double hull environmentally friendly suezmax tankers including two newbuildings to be delivered in 4Q09 and 1Q10.

The market

We had a weak third quarter whilst there were signs that a rebound in spot tanker rates could be expected during the fourth quarter. It was no surprise to us that we have seen a strong increase in freight rates recently. The volatile spot tanker market is notoriously difficult to predict. The development is illustrated by the IMAREX index for suezmax tankers which was $17,160 per day in October, $29,921 per day in November and $68,013 per day up to and including December 6. To some extent this index is an indication of the level of the suezmax spot tanker market. In an improving market, it will take a certain time before NAT is getting the full effect from this rate increase as the vessels typically have contracts for a short period forward, i.e. only a few weeks.

Consolidation of technical operations

As advised shareholders, the announced consolidation of our technical functions has been completed. The reputable V.Ships Norway AS is now technically managing all the Company's vessels, except one which is on long term bareboat charter.

Consolidation of commercial operations

In previous reports, we have laid out a plan for consolidation of our commercial operations. Earlier our commercial functions were outsourced to pools operated by four different companies. The last step in this plan has now been decided - and going forward the number of partners will be two. We shall continue cooperating on the commercial side with Frontline Ltd (NYSE: FRO) and the private Swedish group Stena Bulk. We have known these companies very well for years. They are quality companies and prominent world names in the shipping industry. We have two vessels which soon will leave the Gemini pool of OMI to join our cooperation with Frontline Ltd and Stena Bulk in their respective pool arrangements. Thereafter, the announced consolidation of our commercial operations will be completed.

Strategy, full dividend payout and predictability

The Company has a clear and predictable strategic platform in which a full dividend payout model is a mainstay. As a policy, we pay out all the cash generated from operations. For 10 consecutive years the Company's dividend yield has been above 10%.

Low debt

NAT has low debt per dollar of asset value compared with many other companies. This will enable the Company to take aggressive expansionary steps in good markets and also expand if the spot market and ship values should be lower.

Low overhead expenses - an important competitive strength

Another competitive strength of the Company is our very low overhead expenses compared with other companies - among the lowest in the industry. It is our objective to keep overhead expenses low - an important competitive strength in itself. Our analyses indicate that NAT's overhead expenses are about 50%, or in some cases even one third of the level of other shipping companies on Wall Street; i.e. we have significantly lower overhead per dollar of revenue. We reckon that cash overhead expenses should be in the region of $1,000/$1,500 per day per ship. The low cost base does not in any way impact negatively the top quality approach the Company has in all functions.

Aligned interests - shareholders in focus - one share one vote

It should be noted that an important objective for NAT is that the interests of management of NAT must be aligned with the interests of shareholders in order that NAT management has no more or less incentive to take business risks than shareholders would wish. This clear profile gives you assurance of the security in which you are investing. The alignment of interests will continue to guide management to make prudent decisions on behalf of the Company.

Interests of shareholders are in focus - all shares have the same voting rights - one share one vote. There are no voting privileges for the Manager of NAT or for others.

Growth

We have come a long way since we had three ships in the autumn of 2004 - having increased the fleet to 14 vessels now. Further accretive growth can be expected. This means that we are working to ensure that earnings and dividend per share after an acquisition are higher than the earnings and dividend per share before an acquisition in the same prevailing spot market. Without exception we will keep shareholders' interest in focus going forward.

Summary

I would encourage investors to look to NAT if you wish to invest in the tanker sector. We wish that NAT shall be priority number one for the investor in the tanker sector. In particular, our objective is also that NAT shall be the most attractive dividend paying security. Many shareholders contact us expressing views and recommendations. We encourage such active involvement from our shareholders.