Good morning, nice people. We’re officially deep into the summer news cycle slowdown, but we have an aviation update on Air Arabia’s plans to boost KSA’s eastern province connectivity along with a potential switch in Houthi targeting tactics on Red Sea waters. Let’s dive right in.

WATCH THIS SPACE-

#1– Elon Musk-backed AI firm xAI is reportedly in discussions with Abu Dhabi’s G42 to lease data centers, Bloomberg reports, citing sources familiar with the matter. Although specific details of the agreement remain undisclosed, the sources said that xAI’s team is in contact with both G42 and two other potential partners in Saudi Arabia.

Ring a bell? The startup is reportedly weighing a long-term proposal for several gigawatts from PIF-backed Humain — whose infrastructure is not yet built — against a more short-term agreement for a 200 MW facility already under construction by an unnamed company.

#2- Egypt is eyeing a chemical storage and export hub in Libya to double its Tripoli-bound annual exports to USD 550 mn within its first year of operation, Chemical and Fertilizers Export Council President Khaled Abu Al Makarem told Al Arabiya. The first phase of the proposed hub is reported to span 8k meters — including large warehouse facilities designed to house chemical goods and fertilizers vital for building materials, in a bid to streamline trade between the two countries.

Trade in numbers: Egypt’s chemical exports to Libya settled at USD 272 mn last year — with plastic products leading the sector at USD 103 mn, followed by ink and paint products at USD 94 mn, detergents at USD 36 mn, glass at USD 13 mn, and fertilizers at USD 11 mn.

#3- GCAA orders Boeing inspections: The UAE’s General Civil Aviation Authority (GCAA) instructed national airlines to inspect fuel supply switches on their fleets’ Boeing 737 and 787 aircraft, The National reported on Thursday. The order comes after a preliminary investigation into last month’s fatal Air India crash found that fuel had been cut off from the engine shortly after takeoff, Reuters reported last week. The findings prompted Etihad Airways to pull an India-bound jet mid-flight back to Abu Dhabi for inspection, The Independent reported.

Regional airlines line up for check-ups: Etihad, Saudia, and Oman Air have all completed precautionary inspections of their 787 wide-body fleet, with Oman Air currently finalizing check-ups of its 737s. Flydubai has also launched precautionary inspections of its narrow-body 737s’ fuel switches, a spokesperson told the National on Thursday.

#4- Aviation second wind boosts GE’s forecasts: General Electric (GE) has raised its full-year forecast — exceeding Wall Street’s predictions for 2Q 2025’s bottom line — after rebounding demand for aviation mitigated the effects of a potential global trade war, Bloomberg reported last week. GE now expects higher adjusted earnings for 2025, projecting USD 5.60-5.80 per share, an increase from their previous forecast of no more than USD 5.45.

IN CONTEXT- GE Aerospace announced a 30% increase in top line performance in 2Q, despite widespread market volatility, the news outlet reported. One big victory came as Qatar Airways ordered 400 engines from the company earlier this year, its largest wide-body sale to date.

MARKET WATCH-

#1- Oil prices slightly changed in early morning trading as traders evaluate the impact of US sanctions on Russian oil supplies, Reuters reports. Brent crude futures increased by USD 0.06 to reach USD 69.34 a barrel by 03.44 GMT, while US West Texas Intermediate (WTI) futures rose USD 0.17 to trade at USD 67.51 a barrel.

Saudi Arabia’s seaborne oil exports averaged 6.43 mn bbl / d in the first half of July, potentially marking a 16-month high if the pace holds, according to preliminary data from Bloomberg. However, the figures are based on only two weeks of data, and the final monthly average may be lower. The elevated shipments likely reflect the tail end of June’s production increase and the Kingdom’s increased output quota under its July Opec agreement.

The increased shipments were mostly Asia-bound: Exports to China rose to 2.1 mn bbl / d, and if sustained, would mark the highest monthly level since the production surge of April 2020. Shipments to India also climbed and could reach their highest level since December 2022. Meanwhile, flows to Egypt’s Sumed pipeline fell to their lowest level YTD.

REMEMBER- Opec’s latest report kept Saudi Arabia’s June production within its quota by citing a figure just shy of 9.4 mn bbl / d, using a “supply-to-market” metric instead of the usual wellhead production figures. The change followed a request from the Energy Ministry and stated that the extra oil produced due to geopolitical tensions went into storage and did not reach the market.

#2- Baltic index continues upwards trajectory: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — climbed 1.1% to 2,052 points on Friday. The capesize increased 2.1% to 3,084 points, while the panamax index dipped 0.7% to 1,919 points. The smaller supramax index rose 0.8% to 1,346 points.

#3- The Drewry World Container Index fell by 2.6% to USD 2,602 per 40-ft container on Thursday, according to the latest index readings. The drop comes on the back of market turbulence driven by US tariffs rolled back in April. The container forecaster projects the supply-demand balance to fall in 2H 2025 — causing spot rates to fall.

PSA-

Maersk to roll out PSS: Shipping giant Maersk has revised its peak season surcharge (PSS) for cargo travelling from the Middle East and the Indian subcontinent to the US and the Canadian East and Gulf coasts, according to a statement released on Friday. A USD 1k PSS applies for 20-40 ft dry containers and 40-45 ft high cube dry containers, whereas all 20 ft reefer containers and 40 ft high cube reefer containers will incur a USD 300 surcharge. The hike is effective 18 July until 15 August, and impacts shipments originating from the UAE, Yemen, Oman, Iraq, Kuwait, Jordan, Saudi Arabia, Qatar, and Bahrain.

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CIRCLE YOUR CALENDAR-

Mozambique will host Intermodal Africa on Tuesday, 22 July and run till Thursday, 24 July in Beira. The forum will host over 300 senior government officials, industry leaders, academics, senior executives, and harbor masters in the ports, shipping, and logistics sector. Attendees and speakers will be coming from countries across the Middle East, Africa, and Europe.

Oman will host Transport Middle East on Monday, 1 September and run till Wednesday, 3 September in Salalah. The conference will host 35 international speakers and over 50 exhibitors from the maritime sector to discuss global transportation and logistics.

Saudi Arabia will host the Sustainable Maritime Industry Conference on 3-4 September at the Ritz-Carlton Hotel in Jeddah. The event is set to gather over 60 speakers and more than 3k participants to discuss maritime decarbonization, digital transformation, regulatory frameworks, capacity building, and sustainable practices.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

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