Good morning, folks. For the first time in a while, there’s hope that the war on Iran may soon be coming to an end, with Trump telling CBS that the war will end “very soon.” The messaging from the White House sent oil prices tumbling from nearly USD 120 / bbl during trading to below USD 90 / bbl.

But the news out late in the evening is yet to filter down into the Egyptian market, with the government pressing ahead with the expected fuel hike and the Oil Ministry announcing the increase overnight. The new prices came into effect at 3am this morning.

Here’s what you’re paying now:

• 95-Octane is now priced at EGP 24.00 per liter, up 14.3% from EGP 21.00;
• 92-Octane rose to EGP 22.25 per liter, up 15.6% from EGP 19.25;
• 80-Octane is now EGP 20.75 per liter, a 16.9% increase from EGP 17.75;
• Diesel price climbed to EGP 20.50 per liter, up 17.1% from EGP 17.50;
• The price of compressed natural gas for automobiles rose to EGP 13.00 per cbm, up 30.0% from EGP 10.00;
• 12.5-kg gas cylinders are now priced at EGP 275 per cylinder, a 22.2% increase from EGP 225.00; while 25-kg gas cylinders rose 22.2% to EGP 550 from EGP 450;

Not without justification: The ministry said the hike is the result of the “exceptional situation resulting from the geopolitical developments in the Middle East region and their direct effects on global energy markets.”

What we’re watching for: We’ll be on the lookout for how the hike impacts inflation, which dipped to a four-month low in January, giving us reason to believe the CBE will be more aggressive with its easing cycle. Now with fuel prices up, we expect food and transport prices to follow, raising inflation and making the road towards lower rates more rocky.

We’re waiting for February’s inflation reading, which Capmas is expected to release within hours.

Mixed signals from Donald Trump are making it very hard for us to imagine where global oil prices might head. Despite saying that an end to the conflict is near, the US president threatened bombing “at a much, much harder level” if Tehran disrupted oil supplies. The administration aims to keep down oil prices after they “went artificially up” following the US-Israeli strikes on Iran, Trump said.

Tehran isn’t backing down: Iran’s Revolutionary Guards said it would not allow “one liter of oil” to leave the region if US-Israeli strikes continue.

And on the exchange rate front: The EGP slid to 53 against the USD yesterday as foreign investors pulled USD 411 mn from the local debt market. In the days ahead, policymakers and the business community will be closely watching to see if progress is made to end the war and if the worst-case economic scenarios will be avoided.

Until this morning, the narrative had been about preparing for the worst, with the Madbouly government rolling out measures to rationalize spending and consumption and raise the minimum wage “within days,” in a bid to mitigate the spillover effects of the regional war on Egypt’s economy.

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LOGISTICS — Already battered Suez Canal transit volumes could fall another 50% “if Red Sea shipping disruptions intensify,” the Institute of International Finance (IIF) warned in a report seen by EnterpriseAM. If borne out, this could mean the country’s hard currency revenues from the canal halving from the USD 4.2 bn of receipts recorded in 2025, having already more than halved from a USD 10.2 bn high point recorded in 2023 before the disruptions started to take a toll on canal receipts.

Falling Suez Canal revenues aren’t the only source of hard currency that could come under pressure, with the IIF warning that remittances from Egyptians in the Gulf could fall on “broader regional uncertainty.” Likewise, the country could face “slightly softer FX inflows from tourism.”

But despite this, the association says “Egypt’s macro outlook could remain relatively resilient compared to many other Middle Eastern economies,” pointing out that its distance from Iran will support investor sentiment and reduce immediate security-related disruptions.

CAPITAL MARKETS — Morgan Stanley cut its outlook for Egyptian equities to “equal weight” from “overweight,” citing the country's vulnerability as a net oil importer during periods of heightened regional conflict, according to a note to clients. The downgrade is driven by immediate headwinds, including a heavy reliance on tourism and a struggling Suez Canal, both of which face recovery delays due to geopolitical shocks.

The bank also highlighted that Egypt is significantly negatively exposed to oil supply shocks, making it a riskier play as energy prices fluctuate.

The UAE was also downgraded to “equal weight” due to sensitivity in Dubai’s real estate and tourism sectors, while Saudi Arabia was upgraded to “overweight” as a defensive energy play.

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Happening today

The business community and policymakers will be closely watching for February’s inflation figures due out later this morning. The country’s last reading showed annual headline urban inflation falling to 11.9% y-o-y in January, despite an uptick in the prices of food and beverages.

Analysts see inflation inching up by 0.1 percentage points to a headline rate of 12.0%, according to a Reuters poll.

But even in the event of encouraging data later today, the central bank’s Monetary Policy Committee has more important considerations to weigh up as it meets for its second meeting of the year on 2 April to decide interest rates. What February inflation data won't show is the impact the ongoing war in Iran is having on imported inflation filtering through rising freight and ins. costs, or the implications of spiraling energy costs.

PSA

WEATHER- It’s a breezy — but sunny — day in Cairo today, with a high of 21°C and a low of 11°C, according to our favorite weather app.

While clouds are forecast for Alexandria, with a high of 20°C and a low of 12°C.

The big story abroad

Apart from Trump’s comments on the regional war (which we dive into in the news well, above), a few stories are getting top billing.

#1- Anthropic is suing the Pentagon and other federal agencies for designating the AI firm a “supply chain risk” and attempting to cancel its federal contracts. The row began when Anthropic demanded assurances that its AI tools wouldn’t be leveraged by the Pentagon for mass domestic surveillance or autonomous weapons.

#2- Goldman Sachs has pitched a new hedge fund that allows it to assume a short or long position on corporate loans, the Financial Times reports. The financial product would allow clients to capitalize on further falls in loans made to software companies, after the sector saw its stocks tumble as AI developments threatened its business offerings.

#3- Washington agreed to resolve its longstanding prosecution of Turkey’s state-run Halkbank, which it had accused of aiding Iran in evading US-imposed sanctions.

*** It’s Going Green day — your weekly briefing of all things green in Egypt: EnterpriseAM’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: We look into why the country’s cement giants are increasingly looking at alternative fuel.