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Tide has turned for Middle East offshore market

Informa Markets Mohamed al Ali on stage at SMLME23
The tight offshore market in the Middle East has brought rising rates and high utilisation off the back of continued increase in demands for vessels.

In his keynote address at the Seatrade Maritime Middle East 2023 Offshore Marine and Workboats Forum, Capt. Mohamed Al Ali, Senior Vice President, Offshore Logistics, ADNOC Logistics & Services, outlined the positive state of the market after a prolonged downturn.

“As we gather here today, the offshore oil and gas is set for sustained growth after years of underinvestment, with over $70 billion of projects awarded in 2022, an over 30% increase from 2021,” said Ali.

“In our region, billions of dollars are being invested in offshore production in Saudi Arabia, in Qatar, in the UAE, bringing all the production targets ahead of schedule to meet future demand for energy.”

For at least the next two years, the offshore market is set for an upswing fuelled by increased capex spending for offshore oil and gas and for renewables, said Ali.

“The demand for OSVs is not only strong, but growth covers almost all asset classes supporting drilling, construction, maintenance and logistic activities. The sector remains bullish, and we expect OSV spending to increase by more than 10% this year, compared to last year, resulting in higher daily rates and more utilisation,” said Ali.

Demand for OSVs in the Middle East market is so high that vessels are being drawn in from other regions, said Ali.

“We have every reason to be optimistic about the GCC region and OSV sector. Despite the ongoing geopolitical tensions and mixed views on the global economic outlook, we have continued to thrive and contribute to the local economy.

“The demand for the policies in our region is expected to remain strong, and even grow in the next couple of years. This is a testament to our region's importance as a global energy hub and our commitment to meeting the world's demand for energy.”