Hi @Rich ,
Welcome to our forum!
How did you add the image in Outlook?
And does this issue occur with other images?
Based on my research, i found that this issue usually happens when you are using a picture other than 96dpi. If you are using Outlook 365 with latest version, it's suggested that you could set an option to prevent the compression of pictures as part of the email contents via File-> Options-> Mail-> Editor Options…-> Advanced-> enable: **Do not compress images in file.
**
If it is helpful, if the issue persists, you can also refer to this article to try more steps to troubleshooting: Images resize and become unsharp upon sending.
(Note: Since the web site is not hosted by Microsoft, the link may change without notice. Microsoft does not guarantee the accuracy of this information.)
If the answer is helpful, please click "Accept Answer" and kindly upvote it. If you have extra questions about this answer, please click "Comment".
Note: Please follow the steps in our documentation to enable e-mail notifications if you want to receive the related email notification for this thread.