Page 18: of Offshore Engineer Magazine (Jan/Feb 2026)

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MARKETS OSVs

This gradual reduction naturally raises two questions Vietnam, India cemented its role as a crucial regional sta- regarding market stability and supply shocks. First, is a sig- bilizer in 2025, absorbing Southeast Asian tonnage during nifcant price spike likely? The prevailing view suggests it periods of localized softness to provide a vital outlet for is not. The market appears to have priced in this gradual surplus capacity. Vessel moves from Southeast Asia to the drawdown, and suffcient non-OPEC supply growth is ex- Indian Ocean region increased by 73% year-on-year, with pected to provide a counterbalance. PSVs showing the largest proportional increase in response

Second, could a resurgence of Venezuelan production to their sharper demand contraction in Southeast Asia. To- alter the equation? While the country holds substantial gether, these markets provide a crucial balancing mecha- resource potential, the consensus remains skeptical. The nism for regional vessel supply, mitigating the impact of signifcant geopolitical and operational risks under the demand fuctuations in any single country.

current administration present a formidable barrier to the Shifting focus to the other side of the equation, the ves- rapid, large-scale investment and drilling activity required sel supply outlook points toward a tightening market as to materially impact global supply in the near term. we approach the decade’s end. The newbuild orderbook,

Also, it is worth pointing out that the pivot toward which saw a brief resurgence in 2024, slowed sharply last deepwater did not occur in a vacuum. Rather, it is the ac- year as cautious capital retreated amid weaker market sen- celeration of a trend set in motion years ago, with 2023 timent. Demonstrating remarkable discipline, traditional marking the strongest year for greenfeld deepwater sanc- OSV owners have largely avoided speculative ordering. tions on record, a pattern now frmly taking root across Consequently, net feet growth will be negligible if positive the APAC region. Here, operators are prioritizing “fast- at all. Factoring in retirements, the effective feet count is to-market” strategies, where subsea tiebacks lead the way, poised for a decline, with only the frst wave of 2023–24 favoured for their compelling economics and shorter de- orders delivering by year-end and into early 2027.

velopment cycles. Compounding this tight supply are local content and

For shipowners, this evolution translates into a clear, cabotage rules in the region, which remain defning struc- phased opportunity. The immediate demand will centre tural factors. In practice, contracting is governed by a com- on subsea assets. Over the longer term, this wave of proj- plex web of local registration, certifcation categories, and ects will generate sustained demand for vessels supporting in-country support requirements. These rules can severely the ensuing drilling campaigns and long-term production narrow the pool of commercially deployable vessels, creat- phases. Crucially, this is not just a story of more vessels but ing a bottleneck that supports higher dayrates for compli- instead the focus is on the shift toward more capable ones. ant tonnage even when regional feet totals appear ample on

The move into deeper, more remote waters will amplify paper. Consequently, the effective supply is always less than demand for higher specifcation units that are engineered the theoretical supply, leading to tighter conditions and rate to operate reliably in harsher sea conditions. support for eligible vessels during concurrent project peaks.

This dynamic creates a precarious long-term balance.

Regional Divergence and Fleet Discipline

The industry’s feet is still largely defned by the last major

While the broader shift toward deepwater sets the stage, building boom from 2011-2015. With these assets now the real-world impacts are playing out differently across aging and some needing replacement, the current low

Asia Pacifc. In the region’s largest market, Malaysia, ves- orderbook – a product of post-boom discipline – fails to sel demand is softening, infuenced by escalated tensions match that need. While an ideal market would see vessels between Petronas and Petros. This is refected in Petronas retired at the same rate new ones are built, the absence of a latest outlook, which suggests broadly fat rig and OSV new construction wave now risks a severe bottleneck later activity year-over-year versus 2025, with potential explora- this decade, underpinning a frmer market for shipowners tion upside reserved for the 2028 window. who have the right vessels in the right places.

Specifcally, Petronas’s guidance for jack-up rigs in 2026 In summary, 2026 and 2027 are best viewed as a strategic has softened to nine units, down from 11 previously pro- interlude – a time for the industry to recalibrate on the cusp jected a year ago and below the 10 rigs used in 2025. This of its next upcycle in the Asian Pacifc region. This period signals a clear directive for owners: budget cautiously, fo- of strategic investment and recalibration will pave the way cus on multi-market coverage and be ready to pivot toward for a recovery that is further amplifed by national energy other regional market if domestic demand slows. security priorities, unfolding against a backdrop of rising

Beyond emerging growth markets like Indonesia and global energy demand and improved market fundamentals. 18 OFFSHORE ENGINEER OEDIGITAL.COM