As the world attempts to achieve balance in the face of an ongoing global energy crisis, the offshore support vessel market is poised to witness a distinguished growth spell. While the oil & gas industry saw a recovery in 2021, having faced a dramatic drop in demand from the global lockdowns of 2020, it currently finds itself on the opposite end of the situation, where geopolitical tensions and the reopening of economies have caused the supply to fall significantly short of the demand.

These conditions are creating a highly conducive growth ground for offshore support vehicles (OSVs) as countries attempt to reign in skyrocketing energy prices and ensure adequate supply reserves to maintain energy security.

According to a Global Market Insights Inc., report, the overall OSV market is slated to record a surge in vessel purchase and charter contracts as more countries make investments toward raising capacities and consolidating energy security.

European Union’s pursuit to bring down gas imports from Russia

A fairly recent, yet significant factor that is expected to create more opportunities for the platform support vessels market is the European Union’s ongoing pursuit to wane itself off of Russian gas imports.

In wake of the Paris Agreement, which sought to phase out coal and move towards cleaner energy sources, the continent quickly turned to the significantly low-carbon fuel source called natural gas. However, it quickly became apparent that Europe would primarily rely on imports to address the union’s gas-powered energy needs.

But in early March 2022, the EU unveiled plans to cut down its dependence on gas imports from Russia by more than two-thirds by the end of the year, while looking to import an additional 50 billion cubic meters of LNG annually.

This has opened up a major supply gap that the European Commission is seeking to fill by further diversifying its import contracts toward other sources. Additionally, the Commission is also battling to secure a fleet of specialized ships that are capable of offering the fastest way to bring in alternate supplies.

Global fallback to crude in response to an ill-timed energy crisis

Over the recent couple of years, many of the world’s leading economies have committed to expediting their transition to renewable, clean energy sources. However, to keep up with the rising energy demand, which has skyrocketed since the world has stepped out of the pandemic lockdowns, many have turned again to conventional fuel sources to keep the lights on and stave off energy poverty.

Recently, in the UK, prospects for the further expansion of oil and gas exploration in the North Sea region supposedly cleared a significant hurdle. This took place after the government’s Committee on Climate Change announced that strict tests need to be conducted for any new exploration licenses, essentially stopping short of ruling that they can no longer be issued.

Meanwhile, the US EIA has estimated that the country’s crude oil production may hit the 12.0 million b/d mark in 2022, which is approximately 760,000 b/d higher than its 2021 capacity. Moving ahead, the country is expected raise its crude oil production further by more than 630,000 b/d as it moves to capitalize on the new supply gap created in Europe and the Asia Pacific.

Speaking of the Asia Pacific, OSV demand is expected to come from India and China as they chart their recovery from the pandemic and deal with an energy landscape that has changed significantly over the past few years. India, which is a major oil importer, is expected to see its demand grow more than 8% through 2022.

Final thoughts:

With several new opportunities emerging in the industry’s conventional application avenues, the demand for offshore support vehicles is slated to increase rapidly over the forthcoming years. However, over the long-term, the OSV market is expected to diversify these avenues and foray into the offshore renewables sector.