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Offshore day rates
What it is
The daily hire rate for offshore support vessels, drilling rigs and jack-ups serving upstream oil and gas. Rates respond to upstream capex and rig availability rather than to cargo shipping demand
It is a separate cycle from dry bulk and tanker markets
Impact on industries
- Diversifies a shipping portfolio away from cargo freight, since offshore rates track energy capex rather than trade volumes
- Long-term charters with national oil companies provide contracted visibility unusual in shipping
- Highly exposed to upstream capex cycles, which collapsed for years after 2014 and stranded offshore fleets
- Vessels are purpose-built and cannot redeploy to cargo trades, so a downturn has no alternative employment