- Offshore support vessel demand in the Middle East Gulf has closely tracked boom-and-bust cycles driven by oil price swings, LNG developments, and national energy agendas.
- Recent downturns collapsed newbuild pipelines—AHTS orderbook fell to just 2% of the fleet by early 2025, creating a looming shortage of compliant, modern tonnage.
- With major Gulf producers maintaining multi-year offshore programs and tightening vessel age and emissions standards, owners of younger, technically advanced fleets stand to gain.
The Middle East Gulf’s offshore market has ridden waves of growth and contraction, with vessel utilization and charter rates rising during periods of elevated oil prices and major projects, then plunging when markets faltered. Anchor Handling Tug Supply (AHTS) and Platform Supply Vessels (PSVs) are particularly sensitive to these swings, performing best when offshore field development accelerates and languishing when activity stalls,
Historic Growth Phases
Between 1979 and 1981, the Iranian Revolution and a sharp oil price spike prompted rapid offshore expansion in Iran, Saudi Arabia, and neighboring states. A similar boom from 2004 to 2008 saw prices near $147/barrel funding marquee projects like Saudi Arabia’s Manifa and Qatar’s LNG facilities. The post-2008 recovery carried through 2014, underpinned by steady prices and surging gas demand, while 2021–2023 brought renewed momentum as energy security concerns spurred Saudi Aramco and Qatar Energy to press ahead with offshore developments.
Market Impact on AHTS and PSVs
In each upcycle, high-horsepower AHTS units and DP2 PSVs commanded premium day rates and long-term contracts with national oil companies. Peak utilization in 2006–2008 and again in 2011–2014 boosted earnings sharply. The most recent rebound in 2022–2023 saw tight vessel availability push rates higher still, rewarding owners of modern, high-specification tonnage.
Downturns and Structural Weaknesses
The 2009 financial crisis induced a brief lull, but a far deeper downturn hit from 2015 through 2020, exacerbated by the oil price crash and COVID-19. Oversupply drove day rates to record lows, forced lay-ups, scrapping, and raised consolidation pressures. Newbuild orders collapsed after the 2013–2014 surge, leaving the AHTS orderbook at a mere 2% of active tonnage by early 2025.
Emerging Constraints and Fleet Renewal
As oil majors tighten vessel age caps—from the traditional 20 years down toward 15—many older units will retire, while secondhand supplies dwindle. With shipyards operating at capacity, the pipeline for replacing obsolete tonnage remains slim, signaling a structurally tighter market ahead.
Modern Tonnage in Demand
Major Gulf National Oil Companies—Saudi Aramco, Qatar Energy, and ADNOC—continue to roll out multi-year offshore programs, alongside investments in carbon capture, hydrogen, and other low-carbon technologies. This steady project flow, combined with stricter emissions and performance standards, positions owners of younger, compliant AHTS and PSVs to capture the next cycle’s upside.
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Source: Breakwave Advisors
