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Tugs bring a slit of light to depressed Middle East markets

Tue 03 Oct 2017

Tugs bring a slit of light to depressed Middle East markets



Editor Martyn Wingrove provides perspective on some of the key issues faced by Middle East tug operators

Having just come back from the Middle East, I have a greater understanding of the pressures that tug and offshore vessel operators face in the region.

These range from political to technical and economic challenges that operators have to overcome. On the political side, there is the ongoing embargo of Qatar by leading Arabic nations, Saudi Arabia, UAE, Bahrain and Egypt.

There are the international sanctions, although less severe as they once were, on Iran and the ongoing war-zone that is Yemen. We heard that no international vessel owners can work in Iran until international banks are confident of working there.

On the economic side, we have the ongoing depression in the offshore oil sector and significant oversupply in support vessels leading to fleet layups. There are major offshore projects ongoing, particularly in Saudi Arabia and UAE, but charterers have driven down rates to painfully low levels.

The sheer scale of the problem was obvious as I viewed a forest of laid up jack-up rigs, offshore vessels and tugs in Sharjah.

Of the technical challenges, larger ships are coming to Middle East ports, which means owners need to invest in higher bollard pull tugs, but perhaps without the necessary funds to do so.

There are opportunities for tugs, but not necessarily where operators can access them. It is not surprising that workboat owners in the region are trying to diversify and extend services away from offshore dependency.

But if you think it is hard being a tug and vessel operator in the region, then perhaps you should consider the plight of shipyards. With only a trickle of new orders they are forced to compete on price on repair work. It may be hard for owners, but it is immensely tough on everyone else and this is expected to last for another year.

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