TEEKAY CORP LTD

Developments in Teekay Tankers in 2025 and Early 2026

For additional information about Teekay Tankers, please refer to Teekay Tankers' Annual Report on Form 20-F for the year ended December 31, 2025, as filed with the SEC.

Global Tariffs and Trade

During 2025, the U.S. administration and other governments have announced or taken actions to implement new or increased tariffs on foreign imports and port fees. These actions have resulted and may result in additional retaliatory tariffs being levied on various goods and commodities, which may trigger trade wars. Additionally, in early 2026, the U.S. Supreme Court struck certain of the tariffs implemented by the U.S. administration, who thereafter reimplemented certain tariffs in response, which may cause additional uncertainty and increase geopolitical tensions. These activities have disrupted global markets, resulting in an increase in general global economic uncertainty, including an increased risk of economic recessions. In 2025, the U.S. and China also announced new port fees that would apply to port calls of certain Chinese and U.S.-related tankers, respectively, which could be disruptive to our industry. These port fees subsequently have been suspended until October 2026. As a result of the rapidly changing and unpredictable geopolitical climate, the shipping industry is experiencing uncertainty as to future vessel demand, trade routes, rates and operating costs.

Geopolitical Conflicts

Geopolitical conflicts and related sanctions, export controls and price caps have significantly affected us and our industry, including by disrupting energy supply chains and trading patterns, and causing instability and volatility in the global economy. These conflicts include, among others, Russia’s ongoing invasion of Ukraine, Houthi rebel attacks on vessels in the Red Sea area, and the recent U.S., Israel and Iran conflict and related severe disruptions to voyages through the Strait of Hormuz. U.S. action in Venezuela during 2026, including the removal of President Nicolás Maduro and greater involvement in Venezuelan oil production and exports, has led to a collapse in crude oil flows to China via the “dark fleet” and shifted trade towards the compliant fleet of tankers. This development could benefit mid-size tankers in particular should more Venezuelan oil be sold to U.S. and European markets. The escalation and expansion of hostilities in the Middle East, and the possibility of continuing instability or further escalation in Ukraine, Venezuela or elsewhere could continue to affect the price of crude oil and the oil industry, the tanker industry and demand for our services.

Vessel Sales

During 2025, Teekay Tankers sold eight 2006 to 2009-built Suezmax tankers and three 2006 to 2007-built Aframax / LR2 tankers for a total price of $341.0 million, which resulted in an aggregate gain on sales of $100.5 million during 2025. All of these tankers were delivered to their purchasers during 2025.

In December 2025, Teekay Tankers entered into an agreement to sell one 2007-built Suezmax tanker for $33.0 million. The tanker and its related bunker and lube oil inventories were classified as held for sale as at December 31, 2025. The tanker was delivered to the purchaser during January 2026.

In January 2026 and February 2026, Teekay Tankers entered into agreements to sell one 2009-built Suezmax tanker and one 2013-built VLCC tanker for a combined sales price of $124.5 million. The Suezmax tanker was delivered to its purchaser during March 2026, and the VLCC tanker is expected to be delivered to its purchaser during the second quarter of 2026.

Vessel Acquisitions

In May 2025, Teekay Tankers completed the purchase of one 2019-bulit Aframax / LR2 tanker for a purchase price of $63.0 million.

In July 2025, Teekay Tankers completed the purchase of one 2017-built Suezmax tanker for a purchase price of $64.3 million.

In August 2025, Teekay Tankers completed the purchase of one 2013-built VLCC, which was previously owned through our 50/50 joint venture, for a purchase price of $63.0 million. Following the completion of the purchase, the tanker continues to trade on spot voyage charters in a pool managed by a third party. In connection with the vessel purchase in August 2025, the joint venture fully repaid a $15.0 million outstanding loan balance with a financial institution. The first-priority mortgage associated with this loan and our guarantee on 50% of the outstanding loan balance were both terminated subsequent to the loan repayment. In February 2026 Teekay Tankers entered into an agreement to sell the VLCC as noted above.

In December 2025, Teekay Tankers agreed to acquire three 2016-built Aframax / LR2 tankers for a total purchase price of $141.5 million. The full purchase price of $94.3 million related to two of the tankers and a deposit of $4.7 million related to the remaining tanker were placed in an escrow account, which is recorded in other non-current assets in our consolidated balance sheet as at December 31, 2025. Upon the completion of these purchases in January 2026, Teekay Tankers bareboat chartered-out each tanker to the seller for periods between four and eight months, after which Teekay Tankers will assume commercial and technical management of the vessels.

Time Chartered-in Vessels

During the first and third quarters of 2025, Teekay Tankers redelivered two chartered-in Aframax / LR2 tanker to their owners following the expiry of their time chartered-in contracts.

In December 2025, Teekay Tankers exercised an option to extend one existing chartered-in contract for an Aframax / LR2 tanker for an additional period of 12 months at a rate of $33,150 per day, effective February 2026.

Time Chartered-out Vessels

The time charter-out contract of one Aframax / LR2 tanker expired in May 2025, at which time the tanker was delivered back to Teekay Tankers and has subsequently been trading in the spot market.

During September 2025 and October 2025, Teekay Tankers entered into time charter-out contracts for two Aframax / LR2 tankers for terms between 12 months and 18 months at an average rate of $33,275 per day, both of which commenced in the fourth quarter of 2025.

During September 2025, Teekay Tankers entered into a time charter-out contract for a Suezmax tanker for a term of 12 months at a rate of $42,500 per day, which commenced at the beginning of October 2025.

Distribution from Equity-Accounted Joint Venture

During the third quarter of 2025, in connection with Teekay Tankers' purchase of the VLCC tanker as noted above, Teekay Tankers received a cash distribution from its 50/50 joint venture in the amount of $25.6 million, of which $0.4 million was used to fully repay Teekay Tankers' advances to the joint venture. The net cash distribution of $25.2 million was $8.3 million in excess of the $16.9 million carrying amount of Teekay Tankers' investment in the equity-accounted joint venture, which had been previously written down by $11.6 million at the end of 2021 to its fair value at that time. Upon Teekay Tankers' receipt of the cash distribution, Teekay Tankers reduced the investment balance to nil and recognized the excess amount of $8.3 million as part of equity income and gain on distribution from equity-accounted investment in the consolidated statements of income. As at December 31, 2025, the joint venture no longer had any operational activities and is expected to be unwound during the first half of 2026.

Investment in Marketable Securities

During the second half of 2025, Teekay Tankers sold all of its investment in Ardmore Shipping (NYSE: ASC), which owns and manages a fleet of Medium-Range product and chemical tankers, for net proceeds of $26.3 million, which resulted in a realized gain of $2.9 million on the investment during the year ended December 31, 2025 and generated a total return of $3.3 million, or 14.4%, including dividends.

Other Recent Developments

During the year ended December 31, 2025, Teekay repurchased approximately 0.7 million common shares for $4.9 million, or an average of $6.71 per share, pursuant to its share repurchase programs.

In May 2025, Teekay's Board of Directors (or Board) declared a special cash dividend in the amount of $1.00 per outstanding common share. This dividend was paid in July 2025 to all Teekay shareholders.