OSV sector: on the cusp of the last supercycle

Owners are finally profiting from a stronger Middle East market, brought about by rising demand and decreasing vessel availability, after at least seven years of downturn.

Synergy Offshore chief executive Fazel A Fazelbhoy says the OSV market, especially in the Middle East, is "on the cusp of the last supercycle" with owners able to reap the benefits from tight vessel supply for years ahead.

Mr Fazelbhoy says charterers are ready to lease various types of vessels in the region, during an interview at Riviera’s Offshore Support Journal Conference, Middle East, in Dubai in December 2024. These include barges, landing craft and tugs to diving support vessels, anchor handlers and platform supply vessels to supply the offshore islands and platforms being built for hydrocarbon production.

In Saudi Arabia, there is also demand for workover and utility vessels and liftboats to maintain oil production platforms.

Mr Fazelbhoy expects owners to order a new generation of vessels, ready to operate on alternative fuels and use new engine technology, as the sector focuses on decarbonisation.

But for now, digitalisation technologies are enabling owners to lower their fuel consumption and emissions, using fuel monitoring systems and data analytics.

Mr Fazelbhoy also thinks vessel chartering and determining ship ages needs to be standardised, to ensure the years spent building vessels is considered.