Long-Term Outlook for Subsea Vessel Market Remains Robust

For the first half of 2025 the subsea vessel market experienced a favorable balance, with high dayrates for both 150-ton and 250-ton SWL AHC crane vessels, often exceeding $60,000 and $80,000 per day respectively. For reference, these levels are back to, and even beyond previous peak fixtures.

It is worth noting that a significant portion of the high-specification vessels are now controlled by contractors, however, rather than being available directly from shipowners, which in turn led to more fixtures occurring between contractors instead of through direct charters.

Moreover, charters continue to favor short-term fixtures for these vessel segments. While this makes sense in a project-oriented perspective, it also opens the door to tremendous dayrate volatility. In fact, when looking at the fixture spread during the last 12 months, we find that while there is a limited delta for long-term contracts, short-term, project, and spot fixtures vary almost four-fold from top to bottom!

Additionally, we believe that the predominantly project focused fixing environment is somewhat of a remnant of the low-activity cycle still fresh in everyone’s mind. In light of the record-high and still growing EPC orderbook volumes we firmly believe that the market will revert to more long-term fixtures in 2026.

Short-Term Softening Amid Dayrate Volatility and Supply Growth

Another significant development in the industry is the proposed merger between Subsea 7 and Saipem to form Saipem7, a move designed to achieve substantial cost synergies to the tune of $350 million per year, and increase market dominance, though it will also present integration challenges. Expected to be finalized in the second half of 2026, the combined company will see its combined revenue, EBITDA, and backlog all reach new heights, positioning itself and its capacities as the clear market leading EPC contractor.

Contracting activity remained strong throughout 2025, with the Tier1 EPCs, Subsea 7, TechnipFMC, and Saipem, securing significant projects across Europe, South America, West Africa, and the Middle East. South America, particularly Brazil, stands out as a key growth region, with Petrobras beyond likely to drive long-term demand.

In light of this, the market is also shifting more toward deep- and ultradeep-water projects and more advanced vessels, supported by a strong pipeline of projects expected to drive demand through 2026 and beyond. As a result, close to all job types typically associated with subsea construction assets are expected to continue positive momentum next year. This is especially true for the installation of new subsea trees and other subsea production infrastructure installations, which we expect will see the largest growth in 2026.

Newbuild Supply, Consolidation and the Path to Rebalancing

On the supply side, there is a significant increase in newbuild orders since our forward-looking article at the same time last year. This is especially true for 150- and 250-ton SWL AHC crane vessels, with around 30 firm units currently in the orderbook for these asset types.

Furthermore, when we look at the orderbook compared to the current active fleet, these figures constitute in excess of 20% orderbook ratio, which, in comparison, is roughly the same relative volume of newbuilds seen between 2008 and 2015. A notable shift since the previous market cycle peak however, is that most of these vessels are being constructed in China as opposed to Norway.

Moreover, almost all of these newbuilds are ordered on a speculative basis and with few exceptions remain uncommitted at the time of writing. That having been said, the market does not anticipate a collapse in dayrates. Instead, a wider spread in achievable dayrates based on vessel age and specification is likely to materialize to a significant degree starting in 2026.

Even now, at the latter part of the year, the market has softened compared to last summer, with both fewer fixtures and somewhat downward pressure on dayrates, especially for less advanced or older vessels. Major contractors are also showing caution, focusing on improving margins and aligning vessel intake with planned project activity.

The fact of the matter is that, even with growing demand for subsea services, the supply side is currently growing even faster. Despite this, however, long-term fundamentals remain strong, with a continued shift toward deepwater and subsea infrastructure.

More to the point, market leading shipowners such as Sea1 Offshore, DOF, and Solstad Offshore are reporting strong EBITDA margins, and these are expected to remain healthy due in the prevailing market environment. In fact, another point to note is that dividend distributions are expected to increase among leading vessel owners, reflecting strong cash flow.

In summary, it is difficult to get around the impending influx of speculative newbuilds which will likely soften the market balance and thus dayrates and utilization levels, especially if demand does not keep pace. Additionally, we note that project delays along with conservative behavior from EPCs are also contributing to a potential near-term market softness.

However, a significant backlog and robust tender pipeline suggest a likely uptick in activity and vessel intake from 2026 to 2027. In conclusion therefore, while short-term activity and dayrate expectations have softened, the long-term outlook for the subsea vessel market remains robust, driven by deepwater projects and global energy infrastructure.