Good morning, wonderful people. We end our week with a question that’s harder to answer than it sounds: Where does Iran’s oil go when both exits are closed? We sat down with Dalga Khatinoglu, an Iran energy expert, to ask the obvious follow-up: If the oil has nowhere to go, how long until the wells slow down?

Elsewhere, another Gulf check heads into Indian aviation: Adani Airport Holdings is raising c. USD 1 bn in primary equity from a consortium including the UAE’s Alpha Wave Global, alongside Premji Invest, Temasek, and BlackRock-managed funds.

For our second Bottleneck of the week: it’s not just crude that’s getting stuck — it’s what ships actually run on. Global fuel-oil supply is heading for a deficit of roughly 218k bbl / d in 3Q, as refiners squeezed by the war prioritize diesel, jet fuel, and gasoline instead — a shortfall more than 30x last year’s.

And the retaliation everyone’s been bracing for finally arrived — on three fronts at once. Iran’s Revolutionary Guard says it fired ballistic missiles at a US-linked base near Al Azraq in Jordan and hit 10 ships in Hormuz earlier yesterday, Reuters reports. Houthi forces piled on too, striking oil facilities in Abha, Najran, and Jazan and wounding 73 people — the same Jazan refinery that’s now been hit twice in as many months.

A park today, a port someday

DP World locks in Mombasa land grab: UAE port operator DP World and Kenya-based GulfCap Africa signed a shareholders’ agreement to advance the 222-hectare Mombasa Industrial Park, a planned economic zone near the Port of Mombasa, according to a statement. The first phase will cover 40 hectares, and more than 60 local and international companies have already expressed interest in taking space in the development.

The real prize is still the port concession: DP World first announced the project in August, with the site located less than 20 km from Mombasa’s port. The company has spent years trying to secure a concession at the port itself but has yet to publicly re-enter Kenya’s revived concession process. The industrial park gives it another route into the gateway economy — through warehousing, distribution, customs services, cargo consolidation, and inland logistics.

Keeping the barrels moving

Kuwait is rebuilding its crude export flows around Hormuz. Kuwait Petroleum Corporation (KPC) is moving around 1 mn bbl / d, using its own and chartered tankers to deliver some cargoes directly to customers while shifting others through ship-to-ship transfers outside the strait, Bloomberg reports, citing Sheikh Khaled Al-Sabah, KPC’s managing director for international marketing. That puts exports back near their highest level in six months after they collapsed to multiyear lows earlier in the war.

The caveat: The workaround comes with a price tag. KPC customers that want crude delivered outside the strait will have to pay more to compensate Kuwait for handling the crossing, while buyers willing to collect cargoes inside the Gulf will receive markdowns. The distinction matters while traffic remains far from normal: estimates put Hormuz flows at around 7-10 mn bbl / d of oil and products, versus roughly 20 mn bbl / d before the war.

KPC is looking beyond the tanker workaround too. The company is evaluating a crude pipeline through Saudi Arabia and the UAE that could eventually give it an export route outside Hormuz.

Aqaba gas heads north

Jordan is pushing more gas north through Aqaba: Jordan’s Cabinet approved an agreement to supply Lebanon with natural gas through Aqaba and Syria, according to a statement. Jordan will import the gas, regasify it at Aqaba Port, and move it through the Arab Gas Pipeline running north across the kingdom before sending it through Syria into Lebanon — where it will be used for power generation. The government didn’t disclose volumes, commercial terms, or a start date.

The route is already live: Egypt began sending around 50 mmcf/d of gas each to Lebanon and Syria through the Arab Gas Pipeline this year, using imported LNG regasified at Aqaba.

Market watch

Oil prices held firm this morning after Brent topped USD 100 / bbl as Iran-US attacks threaten further supply disruptions, Reuters reports. Brent crude futures eased 0.1% to USD 101.10 / bbl by 02.56 GMT, while West Texas Intermediate (WTI) was up 0.2% USD 96.24 / bbl.

The Baltic Index inches up: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — increased 1% to 3,620 points on Wednesday. The capesize index gained 1.4% to 6,400 points, while the panamax remained steady at 2,414 points. The smaller supramax rose 0.7% to 1,704 points.

Data point

49.6 — that’s Egypt’s PMI reading for August, up nearly three points from July and the highest in seven months, bringing the non-oil private sector within striking distance of the 50.0 line separating contraction from growth, per the S&P Global Egypt PMI (pdf). The pace of contraction was the softest since January, while employment rose for the first time since last October — and at the second-fastest rate in the survey’s 15-year history. Business confidence also hit its highest since June 2022. Purchasing was the weak spot, falling at its steepest rate in nearly three years as material shortages, cashflow constraints, and Hormuz disruption squeezed firms, while the oil rebound pushed input-cost inflation higher.

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