Environmental conditions corresponding to realistic sea states (which can be rarely considered calm) significantly affect ship propulsion due to added wave resistance, wind resistance and other factors, as e.g., continuous rudder motion for steering in adverse conditions. In addition, external factors such as ocean currents, which determine the actual flow on the ship, critically affect the actual behavior of the propulsion system. All the above cause significant additional energy losses that sometimes could drive the propulsion system of a ship at its limits. On the other hand, the operation of ship propellers and thrusters in real sea conditions is quite different from their design specifications, usually considered in calm conditions. For example, the vertical stern motion of the ship significantly affects propeller efficiency and becomes dramatically worse if emergence of propeller occurs in high waves. Operation of the ship propulsion system in random waves causes significant variations in performance. In this work we examine in detail the effects of wave-induced motions of the ship on the modification of propulsive thrust and efficiency. Our analysis is based on the non-linear Unsteady Boundary Element Modeling Code UBEM which is applied for the analysis of an unsteadily moving propeller in a wake field, in conjunction with seakeeping analysis in regular and irregular waves. Results from the present hydrodynamic analysis, in conjunction with predictions of added resistance, are used to illustrate applicability in the case of an AFRAMAX tanker, investigating the benefits of small regulation of ship speed and engine RPM from the point of view of optimizing ship’s propulsive performance and reduction of energy losses. The present analysis could support the development of ship monitoring and decision support systems, integrated with engine control systems, aiming to maximize operating efficiency in realistic sea conditions.