Page 10: of Offshore Engineer Magazine (May/Jun 2025)

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MARKETS OSVs ers are reluctant to wait two to three years for delivery – The supply conditions today countervail the weakened especially amid ongoing market volatility. As a result, the demand as refected, suggesting that a new market para-

S&P market has seen increased interest; however, the lim- digm is emerging – one that requires heightened sensitivity ited availability of vessels that meet buyers’ criteria contin- and adaptability. Future demand will not only come solely ues to constrain options. from traditional oil and gas scopes but increasingly from

Heightened offshore activity in the Middle East has histor- alternative markets as well. Rising focus on CCS, offshore ically helped absorb excess vessel supply from Southeast Asia wind, and decommissioning, while individually in modest and has become even more pronounced in recent months. volume, adds up collectively to the demand pull for the

However, as activity in Southeast Asia begins to pick up in same assets. At the same time, an ageing feet and limited tandem from next year onwards, vessel availability could replenishment exacerbate constraints. This bodes well for tighten quickly, potentially posing a supply challenge. Addi- owners with operational tonnage but presents a challenge tionally, with the series of awards materializing in Southeast for contractors. Without proactive planning, the market

Asia, we can expect a higher rig activity level into 2026 and may fnd itself underprepared when the next upcycle ar- 2027. Outstanding tender requirements for jackups in 2026 rives. The question is not just whether we have demand continue to drive demand forecast and based on the forecast – but whether we will have the right feet ready to meet it. for the number of working rigs, we are expecting an increase The industry still bears the scars of the 2014 cycle, when of 20% in 2026 and 10% in 2027, compared to today’s level. a wave of overbuilding – driven by overly optimistic de- mand projections – fooded the market with new vessels

Future OSV Demand to Increasingly Come just as oil prices collapsed. The result was a prolonged from Alternative Markets downturn marked by oversupply, weak dayrates, and

Consequently, the expected dearth of newbuilds, com- widespread vessel idling. Today, the risk is not oversup- bined with an ageing feet, would continue to drive up- ply but undercapacity, especially as ageing units retire and ward pressure on vessel rates and utilization. The majority newbuild activity remains subdued. Without a measured of the coldstacked feet is also unlikely to rejoin the fray, as and forward-looking response, we could swing from one reactivation remains largely economically unfeasible given extreme to another – again fnding ourselves caught off their extended laid up status – particularly since over 80% guard, but this time due to a lack of feet readiness when of these stacked units have been stacked for more than 5 demand rebounds. As geopolitics cast new shadows and years. This narrows the true count of active, market-ready macro shifts stir the waters, the course we chart now will tonnage and sharpens the sense of looming scarcity. determine how well we weather the next storm.

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