Structural risks on the horizon in Middle East offshore industry

A combination of contract terminations, spiralling insurance costs and the threat to EPC projects are creating a complex combination of risk for offshore operators in the Middle East as a result of the closure of the Strait of Hormuz

In its latest Horizon Monthly Offshore report, MSI notes that, whilst contract terminations for rigs have been few, a return to pre-conflict levels could take months as fields are brought back onstream and construction projects get back up and running.

MSI associate director Todd Jensen said, “One hot topic for operators has been rising operating costs with insurance and crew costs inflating due to the conflict and a rise in war premiums seeing insurance increase up to 10 times over the last few weeks. Read more at Riviera.