North Sea PSV Spot Rates Pass £30,000 as Six Vessels Go on Project Work

Rates for North Sea platform supply vessels have risen sharply in recent weeks on the back of a supply shortage, after a block of tonnage moved onto project work and left the spot market without prompt availability.

Most attention on the North Sea spot market this year has focused on record-setting day rates in the anchor handling tug supply sector. Charterers have also been exposed to severe restrictions on PSV availability. With six PSVs, named as Atlantica Server, FS Aries, FS Hercules, HM Flipper, MH Monsoon and Surfer Tide, engaged on project work scope with Saipem in the UK sector, the spot PSV market tightened significantly in August, Seabrokers Chartering said in its latest market report.

The tightening was absolute rather than marginal. We have experienced multiple days where the market has been completely sold out with no vessels prompt available for charter anywhere in the region, the broker said. Against that backdrop, owners capitalised on the opportunity to raise rates, and spot fixture rates surpassed £30,000, about $40,600, in the UK sector and NKr300,000, about $32,100, in Norway.

Some seasonality is normal. It is standard for North Sea PSV demand to peak during the summer months, but Seabrokers noted there had been no more than two or three vessels prompt available on any given day for more than three weeks, which is a different condition from a busy summer. There is still a delicate balance between PSV supply and demand in the region, the broker concluded, and just a few vessel arrivals could swing momentum back in charterers' favour, but owners are carrying strong confidence through the tail end of the summer season.

The mechanism behind the spike is worth noting because it is not a demand story. Six vessels committed to a single project scope is a small number in absolute terms, but in a regional fleet that has not grown for a decade it is enough to empty the prompt list. Offshore support has had almost no newbuilding through the downturn years, and the offshore vessel fleet available to the North Sea now sits close to the level at which a handful of fixtures determines the market price.

That fragility runs both ways. A market that can be emptied by six fixtures can also be refilled by a few arrivals, which is why brokers are describing owner confidence rather than a structural shift. The rate level, though, is the one that owners will remember when the next term charter is negotiated.