Middle East jackup fleet continues to shrink following Saudi suspensions

TERESA WILKIE, Director, RigLogix/Westwood Global Energy Group 

The Middle East offshore drilling rig market, long a beacon of growth and stability in the global landscape, is undergoing a significant recalibration. Following a few years of aggressive supply expansion, particularly in Saudi Arabia, the region continues to grapple with the fallout from rig suspensions and shifting investment priorities.  

RAPID GROWTH FOLLOWED BY STRATEGIC RETRENCHMENT 

Fig. 1. Middle East jackup firm demand & marketed supply (2018-2025, YTD). Source: Westwood RigLogix.

Between 2021 and 2024, the Middle East jackup market saw a dramatic increase in activity. Saudi Aramco’s push to grow its working jackup fleet from the mid-50s to 90 units drove a surge in marketed supply in the region, which peaked at an annual total of 183 units in 2024—a 31% increase from 2021. This expansion was supported by reactivations, newbuild deliveries, and rig relocations from across the globe.  

However, early 2024 marked a turning point, Fig. 1. Aramco revised its plans, leading to the suspension or termination of 36 jackups and leaving drilling contractors to reassess their fleet strategies.   

WHERE HAVE THE SUSPENDED RIGS GONE? 

Not all suspended rigs have remained idle, however. There has been a clear pattern of redeployment, with several regions absorbing the majority of excess capacity, such as West Africa, Southeast Asia, China, other parts of the Middle East, as well as Brazil and Mexico to a smaller extent, Fig. 2.  

In addition to redeployment, drilling contractors have taken different steps to rebalance their fleets and the wider global market, such as moving units to cold stack (with them no longer being marketed;, selling these assets for non-drilling purposes; or returning bareboat-chartered jackups to their owners—most of which are shipyards that are now understood to be trying their best to sell these assets.  

MIDDLE EAST JACKUP DAYRATES SLIDE  

Fig. 2. Middle East jackup fleet movements following Saudi suspensions. Source: Westwood RigLogix.

While Middle Eastern committed utilization (which includes rigs currently on hire or are idle/in a shipyard but have future work lined up) remains relatively high at 89%, actual working utilization (rigs that are currently undertaking work) has dropped to 83%, revealing the whitespace in current or near-term rig schedules. Furthermore, this supply and demand imbalance is now showing up in pricing.  

Global jackup dayrates have dropped by around 17% year-to-date for 2025 versus the full-year figure for 2024, as contractors face intense competition, with more rigs chasing fewer opportunities following the influx of available supply from Saudi Arabia. The result? Lower bids, tighter margins, and a clear shift in operator leverage. Dayrates for contracts fixed in the Gulf Cooperation Council (GCC) this year are sitting around 16% lower, on average, when compared to contracts fixed in 2023.  

SIGNS EMERGING OF MARKET UPTICK 

Despite the recent disruptions, the Middle East remains a cornerstone of offshore drilling. Qatar and the UAE continue to invest in major offshore gas projects, and Saudi Arabia is still pursuing brownfield revitalization, albeit at a slower pace. These developments provide a foundation for continued rig demand. 

The region’s long-term fundamentals remain strong. Committed utilization figures show that future backlog is still healthy, especially now that Saudi Aramco has started calling back some of the remaining idle rigs (with current indications that it could take back six to nine rigs from early 2026) and award activity in the region is already higher than it was for the full year of 2024. Meanwhile, the redeployment, cold stacking and retiring of rigs has helped mitigate some of the supply surplus.  

GLOBAL IMPLICATIONS AND STRATEGIC LESSONS 

The Middle East jackup market is transitioning from a phase of aggressive expansion to one of strategic recalibration. Saudi Aramco’s rig suspensions have reshaped the regional and global landscape, but the absorption of rigs to other markets and continued investment in gas and brownfield projects suggest that the market will remain buoyant.  

The redeployment of rigs from Saudi Arabia underscores the importance of fleet flexibility and geographic diversification. Drilling contractors with the ability to quickly reposition assets have fared better, while those heavily exposed to the Middle East have faced greater challenges. 

Note: Access Westwood’s weekly Saudi Aramco Rig Contract Suspensions & Terminations report by subscribing to RigLogix. Since April 2024, when Saudi Aramco announced it would cap oil production at 12 MMbpd—1 MMbpd below its 2020 target—rig contract activity has shifted significantly. This exclusive report provides a complete and up-to-date list of all suspended or terminated jackup rig contracts tied to this decision. 

TERESA WILKIE is Research director of RigLogix, a division of Westwood Global Energy Group. She is focused on developing new rig analytics products, while also continuing to track and analyze the offshore rig market as part of the RigLogix team. With over a decade of experience as an analyst and product manager in the energy industry, Ms. Wilkie returned to Westwood Global Energy Group following a previous four-year tenure working across the suite of rig intelligence services. Alongside her legacy with the Group, she brings considerable expertise from her time at IHS-Markit and Esgian (Bassoe Offshore), predominantly focused on the offshore rig market. This is also alongside several years’ experience tracking the subsea vessel and accommodation rig markets. She can be reached at  
twilkie@westwoodenergy.com