Investor Presentaiton

Risk factors - 1.3 Financial risks (cont'd) 1.3.5 Bunker risk Bunker is the single largest component of voyage related expenses, and the Group makes physical purchases of bunker worldwide. A certain part of the Group's exposure is hedged in some form through bunker adjustment clauses in contracts of affreightments. Bunker adjustment clauses are typically structured as caps and floors where there is a surcharge on the freight if the bunkers price is higher than the cap and vice versa if the bunkers price is lower than the floor. Bunker adjustment clauses are not perfect or 100% efficient hedges due to the difference between actual and projected consumption per metric ton, wide price ranges and the timing of determining the strike price. For the budgeted year 2021, total bunker consumption in compliant fuel equivalent is approximately 400 thousand metric tons, of which approximately 50% is hedged through bunker adjustment clauses. The price of bunker fuel has the past 10 years varied extensively and can affect the financial results for the Group significantly. As a best estimate example, an increase of USD 50 per ton will increase the Group's voyage expenses by approximately USD 20 million, before adjusting for bunker adjustment clauses in freight contracts. 1.3.6 Tax risk The Odfjell Group operates within a number of jurisdictions and tax regimes, including the Norwegian tonnage tax system and the Approved International Shipping system in Singapore. In addition, we operate under the local tax systems in Brazil. Changes in any of these tax regimes could have a material adverse impact on the Issuer's business by amongst other things increased costs. Our tank terminal activities are generally subject to the ordinary corporate tax rates within the country in which the activity is located. 25

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