Good morning, folks. A number of major headlines fill today’s issue, thanks to and despite the ongoing conflict. Leading today’s stories is our interview with US defense technology player Vector’s CEO Andy Yakulis, who filled us in on how Saudi Arabia can tweak its defensive capabilities and what we can learn from the conflict in Ukraine.

PLUS- A Saudi-US venture is wagering on Saudi’s hospitality sector, even as the war shows no sign of stopping, with a plan to set up 50 hotels by 2029 across the Kingdom.

PSAs

The Madinah Bus Project rolled out an updated 15-route network to make getting around the holy city smoother, state news agency SPA reports. Five routes — including those to the airport, Prophet’s Mosque, and Haramain Railway — run 24/7, while 10 more operate 18 hours daily across other areas in the city.

Watch this space

OIL — Are we heading into an unprecedented premium for Arab Light? Aramco is finalizing May-loading crude prices, with traders pointing to a roughly USD 40 per barrel premium for Arab Light — up from USD 2.50 in April, unnamed traders told Bloomberg. The list will land within days.

The negotiation has shifted from routine pricing to a search for workable benchmarks — and refiners are testing alternatives. Informal talks with Asian buyers are running hotter than usual as margins tighten under higher costs and constrained supply. Some spot cargoes are already being priced against Brent-linked instruments, while other options — including Shanghai Futures Exchange pricing and the UAE’s Upper Zakum — are being floated as reference points.

Why this matters: This is leaning more toward a benchmark breakdown. When buyers start indexing outside Dubai or Oman, the region’s pricing structure comes under pressure.

Missing crude is another problem: Flows of Arab Extra Light, Arab Medium, and Arab Heavy have effectively stalled with Hormuz disrupted, leaving the East-West Yanbu pipeline — which carries Arab Light only — as the only outlet. The pipeline is reportedly already running at its full capacity of 7 mn bbl / d.

That concentrates supply into a single grade just as its price spikes, forcing refiners into a simple equation: pay up or step back. Early signals suggest they’re leaning toward the latter, traders from refiners that import volumes from the Kingdom told Bloomberg.

DISRUPTION WATCH — Projectiles landed close to a Greek-owned container ship near Ras Tanura, Reuters reports, citing maritime risk management outfit Vanguard. The Liberian-flagged Express Rome reported two such incidents occurring one hour apart, and that its crew was unharmed. Although no group claimed responsibility for the incident, Iran’s Islamic Revolutionary Guard previously claimed to have attacked the Express Rome while crossing the Strait of Hormuz earlier this month.

Data point

16.8% — that’s the y-o-y increase in the Kingdom’s services exports in 4Q 2025, reaching SAR 66.1 bn, according to the General Authority for Statistics’ latest report (pdf). Meanwhile, services imports edged down 2.6% y-o-y to SAR 119.6 bn.

The drivers: Growth was driven by travel services, which accounted for 59.8% of the total. Exports of transportation services followed at 15.9%, with air travel making up 40.6% of that figure. On the import side, transportation services held the largest share at 28%, followed by travel services at 21.1%.

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The big story abroad

It’s another morning with the regional war dominating global headlines: US President Donald Trump told aides he is “willing to end the US military campaign against Iran even if the Strait of Hormuz remains largely closed,” the Wall Street Journal reports. Trying to open up Hormuz would extend the war beyond his timeline, according to officials cited by the Wall Street Journal. This came shortly after he reiterated his threat to destroy Iran’s energy infrastructure if it does not open the strait.

Markets were quick to react to the news, with Asian markets trading higher after opening in the red, oil dipping slightly, and Wall Street likely opening up with futures in the green.

And while it’s shaping up to be a good day for equities, the damage has been done. What could’ve been a red-letter year for US equities has been overtaken by recession fears and soaring energy prices, as Wall Street wraps up its worst quarter in four years. Closer to home, emerging-market stocks also suffered — losing their 2026 gains with the US-Iran war poised to raise inflation and stall growth.

Dive deeper: Wall Street Journal and Bloomberg have more.

A new food giant could soon enter the scene: UK-based consumer packaged goods giant Unilever is inching closer to merging its food business with US spice manufacturer McCormick, unnamed sources told the Wall Street Journal. The resulting entity would be valued at around USD 60 bn. Expect an official announcement as soon as later today.

Also receiving ink this morning: Israel’s parliament passed a law that makes execution the default sentence for Palestinians convicted of lethal terrorism. Human rights advocates have condemned the move, arguing that it contradicts the state’s longstanding freeze on capital punishment.

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