A fragile recovery in the Middle East offshore drilling market has been sharply interrupted as escalating regional conflict reshapes expectations for the jackup sector in 2026.
At the start of the year, London-based energy research firm Westwood had pointed to a long-awaited rebound in the global jackup market, expected to begin in mid-to-late 2026. That forecast was built largely on activity in the Arabian Gulf, the world’s most active jackup basin, which accounts for around 36% of global supply.
Early 2026 data appeared to support that optimism. Several offshore developments were approaching final investment decisions, while exploration success offshore Kuwait added visibility to future demand. At the same time, previously idle rigs were expected to return to work with Saudi Aramco, and others were already redeploying across the region.
However, that trajectory shifted rapidly from February 2026, as regional tensions escalated into a more sustained security crisis. Missile strikes, drone activity, and naval incidents across parts of the Gulf have significantly changed operating conditions for offshore contractors.
Operators have since prioritised safety and asset protection, triggering a series of precautionary responses. These have included temporary evacuations of personnel, down-manning of rigs, delays to new drilling campaigns, additional rig suspensions in Saudi Arabia, and early contract terminations in Qatar. Several rigs previously expected to restart work with Aramco have also remained inactive.
In its analysis, Westwood noted that late 2025 and early 2026 had initially seen a strong wave of jackup tenders across the region, totalling around 56 rig years of potential demand, with activity expected to materialise through 2026 and 2027.
“With demand temporarily subdued and limited scope for rigs to relocate out of the region, working utilisation of the marketed fleet has deteriorated sharply – from 83% in early February, prior to the outbreak of hostilities, to around 69% by late April,” Westwood stated.
While many affected rigs remain under contract, a large portion is currently idle due to evacuations or reduced staffing levels. As a result, committed utilisation has remained relatively resilient at around 90%. However, analysts warn this figure could come under pressure if further early terminations occur.
Westwood’s original 2026 outlook had projected strengthening fundamentals, with committed utilisation expected to rise from 94% in 2025 to 96%. That forecast has now been revised downward, with utilisation expected to settle in the 89–91% range for full year 2026, reflecting the increased uncertainty across the region.
Despite the deterioration in conditions, some market observers have pointed to early discussions around a potential easing of tensions between Iran and the United States. If sustained, such a shift could help stabilise the region and gradually restore confidence in offshore activity, offering a possible upside scenario for the jackup market outlook
