TODAY: ADQ snaps up more Aramex share

Good morning, friends. The news cycle slowdown continues, but ADQ’s successful voluntary tender to secure a majority in Aramex is making waves this morning. We also have the latest updates on energy trade from Egypt and Iraq. Let’s dive right in.

WATCH THIS SPACE-

#1- Egypt + Germany in talks over energy trade: The Egyptian government is exploring the possibility of leasing a German LNG regasification vessel, with a delegation of Egyptian experts expected to visit Germany by the end of this month to finalize the terms of the potential agreement, according to a statement. The two countries are also in discussions over supplying Germany with Cypriot gas, which Egypt’s facilities are set to receive for liquefaction and re-exports starting mid-2027.

Egypt’s sixth floating regasification unit? Egypt has been expected to ink an agreement this month to rent its fifth floating regasification unit from Cyprus, with the ship reportedly expected to dock in Egypt to cover high energy demand in the summer months. The government also reportedly chartered a third floating storage regasification unit to dock at Ain Sokhna by June 2025 and a fourth unit from Turkey to dock during the summer.

The gov’t is prepping for summer demand surge: The state-owned Egyptian Natural Gas Holding Company has reportedly sent new pricing and payment conditions to global LNG suppliers in a bid to secure direct contract offers for LNG supplies for the summer months, with the government reportedly aiming to import 155-160 shipments of LNG in 2025 to close the gap between supply and demand.

#2- Iraq is pivoting to Oman and Qatar for natural gas supplies amid a US push to intervene in the country’s Iranian energy imports, the head of the state-owned South Gas Company (SGC) Hamza Abdul Baqi told Reuters. The move comes after the US rescinded a waiver that exempted Iraq from a ban on electricity imports from Iran. The US, however, has left in place an allowance for Iranian natural gas imports, but raised its pressure on Iraq to slash the imported quantity whose annual value stands at about USD 4 bn - 5 bn, Reuters reports, citing the Prime Minister’s advisor Farhad Alaaeldin.

Background: Iraq signed a five-year supply agreement with Iran in March 2024 to import up to 50 mn cubic metres of Iranian gas per year.

A floating terminal is also coming to Iraq’s way: The country is also reportedly planning to finalize an agreement with UAE-based logistics player Breeze Investment before the end of the month to lease a floating gas terminal in Khor Al-Zubair port that will handle the Gulf-sourced gas imports. The floating terminal is slated to launch mid-2025, with a capacity of up to 500 mn cubic ft per day.

Part of a new gas network push: The planned floating terminal will receive its gas supply from a 45 km gas pipeline under construction that is reportedly planned to transport about 200 mn cubic ft per day, linking the facility to the oil-rich Basra. The pipeline is expected to launch in 120 days and supply gas to Iraq’s power plants.

REMEMBER- Iraq is heavily reliant on Iran: Iraq produces about 27 GW of electricity, one-third of which is generated via plants powered by Iranian natural gas. The country also imports grid electricity from Iran to make up for power supply shortages of up to 13 GW at peak times, but the exact figure on direct electricity imports is not clear. The US claims Iraq’s electricity imports from Iran stood at just 4% in 2023.

#3- The Houthis are once again targeting Israeli-linked vessels crossing the Red Sea, according to a post on X from the group’s spokesman. The resumption of the attacks will come after the expiry of a deadline the Yemeni group has given Israel to reach an agreement for the second phase of the ceasefire and end its aid blockade on Gaza.

#4- Adnoc’s new USD 80 bn international low-carbon and chemicals arm XRG will make a “very large and significant investment” in the US, Reuters reports, citing remarks made by Adnoc CEO Sultan Al Jaber at CERA week in Houston. Possible areas of investments include the gas supply chain, from exploration and development to distribution, the newswire said.

ICYMI- The state-run oil giant is reportedly looking to snap up natural gas producingfields in the US, Bloomberg reported earlier this week. The potential acquisitions will aim to support its existing US assets and enhance its access to fuel and feedstock for its chemical plants and liquefied natural gas (LNG) export facilities in the US.

#5- Rising LNG operation costs in US prompt LNG contract revisions: A number of US-based LNG suppliers are looking to offset climbing labor, borrowing, and construction costs by reworking purchase agreements, Reuters reports, citing unnamed sources and company statements it has seen.

Who’s calling for a time-out? Texas-based LNG supplier Mexico Pacific has attempted to renegotiate its liquefaction fees but was reportedly turned down by two of its buyers — China’s Zhejiang Energy and Guangzhou Gas. The US’ second largest LNG exporter, Venture Global, is also requesting a revision of supply and purchase agreements.

ALSO- Construction and liquefaction costs are stalling projects: The rising construction costs of Mexico Pacific’s Western Mexico facility — developed by Bechtel — have rendered the project financially unfeasible, and venture Global’s Louisiana-based project has not begun construction pending the revision of liquefaction fees, Reuters reports.

Regional appetite for US LNG amid growth: US LNG shipments were on track to record 86.9 mn metric tons in 2024 as record domestic natural gas production drove the 10th straight year of volume growth in the LNG sector. Saudi Arabia’s Aramco was reportedly seeking to expand its stake in EIG’s MidOcean Energy last September, while the UAE’s Abu Dhabi National Oil Company (Adnoc) acquired a stake in May 2024 in a Texas LNG export facility owned by natural gas company NextDecade.

MARKET WATCH-

#1- Oil prices surged this morning, driven by revived hopes of global growth instead of recession this year in response to the weakening greenback, Reuters reports. Brent crude futures increased by USD 0.51 to USD 70.07 a barrel, while the US West Texas Intermediate (WTI) inched up by USD 0.52 to USD 66.77 a barrel by 11.16 GMT. The gains, however, were still capped by the continued uncertainty on global trade and a US slowdown.

MEANWHILE- KSA + Russia are vying for a bigger share of Asia’s oil market: Saudi Arabia is looking to boost its crude exports to Asia — particularly China and India — as it races against Russia to take up a larger share of the region’s market, Reuters reports. China is slated to import 1.64 mn barrels per day (bpd) of Saudi crude oil this month, surging up 1.21 mn bpd in February, while India imported around 532k bpd so far this month with projections for further increases. India onboarded some 679k bpd from the Kingdom in February.

REMEMBER- The Kingdom’s oil exports to Asia are forecast to boost from next month as Opec+ agreed to gradually increase output. Saudi Aramco also lowered its crude oil prices for Asian buyers in April for the first time in three months, cutting Arab Light by USD 0.40 cents to USD 3.50 / bbl above the Oman and Dubai average.

Bridging a supply gap in the market: Russia was China’s top supplier — surpassing Saudi Arabia last year with its discounted crude due to Western sanctions. Shipments to China have paused in the first two months of 2025, with imports dropping to 969k bpd last month, down from 1.01 mn bpd in January amid new US sanctions on seaborne shipping. India also recorded a dip in imports from Russia, which fell to 1.43 mn bpd in February, down from 1.63 mn bpd the month prior.

ALSO- Iraq cuts April crude prices for Asia, Europe: Iraq’s federal marketing company SOMO has trimmed down the April official selling price (OSP) of crude to Asian and European buyers, Shafaq News reports, citing an unnamed source. SOMO has cut the OSP of Basrah Medium and Basrah Heavy crude by USD 0.50 per barrel. Compared to Brent Crude, Basrah Medium cost European buyers USD 0.25 less, whereas Basrah Heavy’s OSP rose by USD 0.10.

ICYMI- Iraq raised the price of its Basrah Medium and Basrah Heavy crude for Asian buyers lastmonth to the highest level since September 2022.

IN OTHER OIL MARKET UPDATES- Kazakhstan could soon cut its output: Kazakhstan has entered discussions with major oil firms to decrease its output and bring the country’s supply back in line with targets and guidelines set by Opec+, Energy Minister Almasadam Satkaliyev told Reuters on Monday. No final decision on how much will be cut has been reached yet.

REFRESHER- Kazakhstan reportedly bumped crude oil and gas condensate production 13% m-o-m in February to around 2.1 mn bpd, surpassing its Opec-mandated limit of around 1.5 mn bpd. Opec+’s crude production is already on the rise, reaching 27.4 mn bpd in February, an increase of 240k bpd, its highest since December 2023. Opec+ agreed last week to stick to plans to hike supply in April following repeated delays, citing “healthy market fundamentals” and a “positive outlook.”

#3- Baltic index maintains upwards trajectory: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was up 12 points to 1,436 on Tuesday. The capesize dipped 4 points to 2,474, while the panamax index rose 50 points to 1,064. The smaller supramax index remains unchanged at 864 points.

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