The LNG carrier market has come under sustained pressure.

New US tariffs and escalating global trade tensions have impacted vessel markets in the first half of 2025, depressing investment in some sectors while accelerating strategic orders in others, according to a report by Veson Nautical, a leading provider of maritime freight management solutions and data intelligence

Tanker slowdown

The tanker sector saw a marked slowdown, with newbuilding orders down 74% y-o-y and S&P volumes falling by 31%. Softer earnings and regulatory uncertainty were key drivers. Medium Range 2 (MR2) product tankers bucked the trend, accounting for over a third of transactions as buyers capitalised on lower values. Usually sized between 45,000 and 55,000 DWT, MR2s are product tankers that typically ship gasoline, diesel, jet fuel and other refined products across regional and intercontinental routes. Values for 15-year-old units fell by 24%, drawing renewed interest in ageing but versatile tonnage.

Pressure on the LNG carrier sector

The LNG carrier sector came under sustained pressure during the first six months of 2025, with average time charter earnings for large vessels falling by 66% y-o-y. The decline was driven by continued fleet expansion outpacing demand growth, along with weaker seasonal fundamentals. As rates fell, demolition activity increased sharply, with seven vessels scrapped—a 250% rise on the same period in 2024. Older steam turbine vessels saw the steepest value declines, with 15-year-old units down by more than 8%. While demand for LNG is expected to rise in the coming years, the current tonnage surplus is likely to keep pressure on earnings through the rest of 2025.

Tariff uncertainty hits the LPG carrier sector

In the liquid petroleum gas (LPG) carrier market, S&P activity slowed by 25% y-o-y, weighed down by trade policy uncertainty between the US and China. Newbuilding orders dropped by 80% compared with the same period last year. Most activity was concentrated at the very large and small ends of the fleet, with limited momentum in the midsize space. Values fell across the board, though long-term averages remain high by historical standards.

“Geopolitical pressure is no longer a background factor; it’s shaping the way owners think about risk, timing and capital,” said Matt Freeman, chief market analyst at Veson Nautical. “From regulation to rerouting, disruption is now part of the operating environment, and owners are recalibrating their strategies accordingly.”

The contract involves the testing and inspection of umbilicals. (Image source: JDR Cable Systems)

JDR Cables Systems (JDR), the global subsea cable supplier and service provider has been awarded a major service contract by Larsen & Toubro (L&T), to test 14 umbilical cables for offshore platforms in the Middle East

The work covers two major work scopes across multiple offshore platforms, to ensure the safety and efficient operation of the umbilical cables. This includes the testing and monitoring of critical hydraulic and electrical control systems to support operations across the platforms, from pre-deployment testing, to monitoring during lay operations, and integration testing. The project will be managed from JDR’s UK service centre in Newcastle, with offshore technicians, equipment, and technical support provided throughout the operation to ensure the umbilicals are properly monitored during the installation and integration phases and provide onsite support throughout the whole process.

Alan Combe, service sales manager EMEA at JDR, said, “Securing this contract reflects the strength of our service offering and the capability of our team to deliver technically complex service work in the Middle East. It’s an exciting region, full of opportunity and innovation, and an important part of JDR’s long-term focus. We’re looking forward to working closely with the L&T team throughout the installation and testing phases.” 

“The Middle East continues to present strong opportunities for JDR, both for our subsea cables and our service offering,” added Carl Pilmer, chief sales officer at JDR. “As we consolidate our presence in the Middle East, this project is a good example of how we’re supporting customers in the region with reliable and high-quality delivery.”             

Oil and gas assets have come back into favour. (Image source: Synergy)

Over the last 18 months, private equity (PE) has dramatically re‑embraced oil & gas assets

This is a significant change in course for the Cap Stack Cowboys, if not a full 180 degree turn – what had once been sidelined in favor of renewables is now firmly back at the table. The reason? A confluence of strategic divestitures, powerful macro themes, and patient capital seeking stability and yield.

According to S&P Global, PE investment in fossil fuels surged from US$6.61bn to US$15.31bn in 2024, marking a staggering 131% year‑on‑year increase. Notably, the second half of 2024 alone saw over $10.17 b funnelled into oil and gas assets, far surpassing the US$5.14 bn invested in renewables during the same period, this at a time when the world was battling the twin pressures of a geo-politically volatile world and grappling with demand uncertainty from key Asian economies of China and India. 

Big oil’s strategic pivot away from non-core assets – driven by capital discipline – has opened the door for PE liquidity. As big oil continues to streamline portfolios, there will be opportunities for private players with a strategic intent to pick up a piece! These deals provide PE with discounted entry points and operational upside.

Strategic drivers: AI, energy security, and yield

A pivotal factor: data‑centre power demand. Generative AI developments are amplifying energy needs – datacentres alone could consume 8% of U.S. power by 2030, up from 3% in 2022 . That energy cannot reliably come solely from weather-dependent renewables, reviving interest in gas and oil.

Simultaneously, geopolitical concerns, especially following January’s U.S. executive orders favouring domestic fuel, have boosted PE exit activity. By May 21, 2025, PE exits in fossil fuels reached US$18.54 bn, nearly outperforming all of 2024’s US$19.41 bn.

Private equity firms are now deploying capital into oil and gas with a not seen before aggression and strategic intent. Carlyle’s Private Credit arm recently struck a potential US$2bn deal with Diversified Energy, a move that taps into steady cash flows from mature U.S. wells. Meanwhile, Post Oak Energy Capital closed its fifth fund at US$600mn (with total commitments reaching US$764mn), focusing on mid-market upstream players like Diamondback and Permian Resources. Similarly, Waterous Energy has raised nearly US$1bn (CAD 1.4bn) with plans to consolidate smaller Canadian producers, aiming to build scale and eventually list them publicly.

This resurgence is driven by three key factors. First, the predictability of cash flows from producing wells offers an attractive risk-adjusted return profile, particularly in a yield-starved global market. Second, a steady divestment pipeline from oil majors – eager to streamline their portfolios – provides PE firms access to non-core assets at reasonable valuations. And third, macroeconomic tailwinds, including global energy security concerns, soaring datacentre-driven power demand, and buoyant exit valuations, have created fertile ground for renewed activity.

That said, the sector is not without its risks. Transition pressures remain acute: despite rising demand from AI infrastructure, the broader global push toward decarbonisation continues to pose reputational and regulatory headwinds. In addition, oil and gas prices, though relatively stable in the $70–90 per barrel range through 2024–25, remain inherently cyclical and susceptible to geopolitical shocks.

The private equity community is not merely returning to hydrocarbons – it is doing so with a more refined playbook. The most successful firms will be those that blend downside protection through conservative capital structures, strong operational capabilities to enhance asset performance, and a clear path to exit – whether through trade sales, public carve-outs, or securitised cash flow instruments.

Oil & gas are no longer taboo for private equity. Renewed appetite – driven by attractive entry points, cash-yield stability, and macro momentum – has sparked a renaissance. The firms that win will execute with discipline, structure smart deals, and mindfully time exits under an increasingly watchful ESG and regulatory lens.

This article is authored by Synergy Consulting IFA

Oil prices remain under pressure.

Oil prices remain under pressure in the face of potential oversupply and uncertain demand, as OPEC+ rolls back output cuts

The eight OPEC + countries which previously announced additional voluntary adjustments (ie Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman) will implement a production adjustment of 548,000 bpd per day in August 2025 from the July 2025 required production level, in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2mn bpd voluntary adjustments starting from 1 April 2025. This is higher than the last three rollbacks of 411,000 bpd and means that OPEC+ is on track to fully unwind 2.2mn bpd of cuts nearly a year ahead of schedule.

“The gradual increases may be paused or reversed subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability,” said OPEC in a statement, noting “steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories”. The eight countries will meet on 3 August 2025 to decide on September production levels.

“Investors remain cautious, especially as seasonal demand typically softens later in the year and US trade tensions intensify. President Trump’s upcoming tariffs, including a fresh threat targeting BRICS-aligned nations, added to the markets cautious tone,” commented global financial group MUFG, adding that the move marks a sharp shift from OPEC+’s past restraint.

“Opec+ keeps surprising the market,” said Jorge León, head of geopolitical analysis and senior vice president at energy consultancy Rystad. “This sends a clear message, for anyone still in doubt, that the group is firmly shifting towards a market share strategy.”

“It was pointless to maintain these voluntary cuts once the strategy became market share rather than price defence. But for the sake of appearances, and perhaps with the hope of managing market expectations, they have to go through the motions anyway, notionally unwinding the cuts at an incremental pace,” said Harry Tchilinguirian, group head of research at Onyx Capital Group in a LinkedIn post.