KNOT Offshore Partners LP (NYSE: KNOP)

KNOT Offshore Partners LP is a publicly traded limited partnership formed on February 21, 2013 to own, operate and acquire shuttle tankers under long-term charters of five years or more. It maintains a fleet of nineteen shuttle tankers as of April 17, 2026, serving offshore oil producers by transporting crude oil and condensates from installations to onshore terminals. The partnership operates in the maritime shipping sector, specifically within the specialized niche of shuttle tanker services. Its primary business objective is to generate stable cash flows and provide a sustainable quarterly distribution to unitholders, while pursuing accretive acquisitions of shuttle tankers under long-term charters. To achieve this, KNOT Offshore Partners LP leverages the operational expertise and customer relationships of its sponsor, KNOT, to secure new vessels and extend existing charters.

The partnership generates revenue primarily by charging customers for the hire of its vessels and for ancillary services related to loading, transportation and discharge of crude oil under time charters and, for one vessel, a bareboat charter. Hire rates are typically paid monthly in advance in U. S. dollars and may include fixed amounts, annual escalations or option‑based adjustments to offset operating‑cost inflation. As of April 17, 2026, the majority of its shuttle tankers are employed under time charters with major integrated energy companies, while one vessel operates under a bareboat charter with Shell. In addition, a small portion of revenue historically came from spot voyages, which the partnership utilized in 2024 and 2025 to supplement time‑charter income. Revenue is recognized as the hire accrues, and the partnership also receives reimbursements for certain voyage expenses under specific charter arrangements.

KNOT Offshore Partners LP competes in the highly capital‑intensive shuttle tanker industry, where barriers to entry are high due to the specialized nature of the vessels and the need for long‑term, creditworthy charters. Together with its sponsor KNOT, it ranks as the largest owner of shuttle tankers globally, controlling 28 vessels and having eight newbuilds on order as of September 2025, according to Fearnleys data. The global shuttle tanker fleet comprised 78 vessels with an additional 21 newbuilds on order at that same time, underscoring the consolidated nature of the market. Its principal rivals include Maran Shuttle Tankers (second largest with 18 vessels and three newbuilds), American Eagle Tankers (third with 17 vessels and no newbuilds) and Tsakos Energy Navigation (fourth with six vessels and ten newbuilds on order). The partnership’s competitive advantages stem from its access to KNOT’s operational expertise, established relationships with major oil companies and its ability to secure long‑term, fixed‑rate charters that generate stable cash flows. Furthermore, the partnership benefits from KNOT’s technical management services, which ensure vessel reliability and compliance with stringent safety and environmental standards.

As of April 17, 2026, the partnership’s charterers include Brazil Shipping I Limited (a Shell subsidiary), Equinor ASA, Fronape International Company (a Transpetro subsidiary), Repsol Sinopec Brasil S. A. (combined with Repsol Trading S. A.), Chartering and Shipping Service S. A. (a TotalEnergies subsidiary), Eni Trading and Shipping S.p. A. (an ExxonMobil subsidiary), SeaRiver Maritime LLC (also an ExxonMobil affiliate), Galp Sinopec Brazil Services BV and PetroChina International (America) Inc. Revenue composition for the year ended December 31, 2025 showed that subsidiaries of Shell, Equinor, Eni, Repsol, TotalEnergies and Transpetro accounted for approximately 22%, 15%, 13%, 11%, 11% and 10% of total revenue, respectively, with the remaining share derived from ExxonMobil, Petrorio, KNOT, Galp Sinopec, PetroChina and BP Oil International. The average remaining term of the partnership’s time charters, excluding options, was 2.6 years as of December 31, 2025, while charterholders held options to extend the charters by an additional 4.1 years on average. These figures reflect the partnership’s focus on securing long‑term agreements with creditworthy, integrated energy companies.