After a period in which demand outpaced supply, leading broker Fearnley Offshore Supply says the commissioning service operation vessel (CSOV) market is entering a period in which deliveries will exceed market requirements
In an analysis of the market in its latest offshore report, Fearnley Offshore Supply said so far this year, 13 CSOVs have been delivered, with an additional three vessels expected to enter service by the end of 2025, bringing the total number of deliveries to potentially 16 vessels by the year.
“Although this figure is high, 20 vessels were originally slated for delivery in 2025,” said the broker. “When looking at the projected newbuild deliveries for the upcoming two years, we can see that most of these assets are being built on a speculative basis and currently do not have firm contracts.
“The Tier 1 fleet is projected to double by the end of 2027, resulting in higher competition for seasonal work, which we believe is likely to put downward pressure on day rates,” said the broker. “As it stands, out of the current 62 purpose-built vessels in the CSOV fleet, approximately 80% of them have firm contracts until the end of the year. However, the low activity season is starting to set in, and we expect the market will turn increasingly competitive going forward.”
The broker continued, “We are now starting to enter a time when newbuild deliveries are starting to outpace demand growth. As of now, it is not by a tremendous degree… due to newbuild delays and growth in the oil and gas support vessel segments, but a potential challenge for vessel owners working on only seasonal contracts.”
Having assessed contract status in the first quarter of 2026 and deliveries expected in early 2026, Fearnley Offshore Supply said it expects the number of vessels with firm contracts will fall to around 65%. “Several upcoming newbuilds remain without a contract, and several vessels are expected to roll off their current contracts at the end of November and December,” it noted.
As Fearnley Offshore Supply also noted, some of the recent tightness in the CSOV market can actually be attributed to the fact that a growing number of newbuild CSOVs are late being delivered. “By comparing announced deliveries against actual deliveries, combined with the updated delivery timeline for next year, we find that around 75% of vessels have been delayed by at least three months,” it said.
“This, coupled with more offshore wind projects and demand from the offshore oil and gas market was a root cause for a tighter than anticipated market during the summer and autumn.”
The broker said this meant that utilisation levels were higher than they might otherwise have been in the second and third quarters this year. It also meant that a number of vessels that did not have long-term commitments secured contracts as frontrunners, due to delayed newbuilding deliveries.
As Fearnley Offshore Supply also highlighted, in addition to purpose-built CSOV newbuilds, a number of newbuild subsea vessels that do not have firm contracts are due to be delivered into the offshore market in the next couple of years and – as in former years, when the subsea market was weak – these vessels could seek work in the walk-to-work market, competing against CSOVs.
