As 2021 draws to a close, there are many reasons to be both optimistic and cautious about our industry in 2022 and beyond. While there have been positive trends in market drivers for OSV demand, we are still faced with the threat of COVID and the impact it may have on oil and gas demand.
Overall, the result has been increased demand for deepwater OSVs (greater than 4,000 tons deadweight) to the point that demand is slightly greater than the supply of true deepwater vessels which has resulted in some smaller vessels (smaller than 4,000 tons deadweight) being chartered to work in the deepwater—which is typically not the case. This has increased charter rates for all deepwater vessels and even some of those less than 4,000 tons deadweight.
Though the market trends have been very positive, the threat of COVID-19 derailing oil demand and greatly reducing offshore oil activity in the US Gulf of Mexico remains very real. The Omicron variant of COVID-19 has created a new wave of concern resulting in renewed restrictions that, if left in place for an extended period or are made more severe, will result in oil demand destruction, falling oil prices, and significantly reduced activity across all oil producing basins.
I remain optimistic that this initial knee-jerk reaction to Omicron is not warranted, that common sense will prevail, and the world will not be faced with anything close to what occurred back in 2020.