Good morning, friends. We’re inching closer to the last weekend of the month with a brisk read, led by debt updates from Oman’s Sohar. We also take a close look at a new bonded warehouse pilot in Egypt — and how it could help drive up demand for re-export service. Let’s dive right in.

WATCH THIS SPACE-

#1- Maersk has pledged to begin a gradual return to the Red Sea route starting in December after signing a strategic partnership agreement with the Suez Canal Authority, according to a press release. No timeline for a full return, however, was given. CMA CGM also committed to a full return by December, Suez Canal Authority’s Chief Osama Rabie said during a presser yesterday.

Other players are not fully convinced just yet: Japanese marine logistics giant NYK is holding off its return to the Red Sea on the back of geopolitical risks — which outweigh the benefits of faster and cheaper routes, Lloyd’s List reports. The firm is currently waiting to see if talks between Israel, the Houthis, and Iran can bear fruit and deliver a lasting settlement.

There are other reasons to be wary of a quick return: With spot rates for containers falling more than 50% this year, shipping lines are incentivized to maintain their current voyages around the Cape of Good Hope over fears that a return to the shorter Red Sea route “would flood the market with capacity and cause freight rates to plunge even lower,” freight analytics firm Xeneta’s Chief Analyst Peter Sand told Bloomberg.

In perspective: A return to the Red Sea route could loosen up about 6% to 7% of the world’s shipping capacity at some 2 mn TEUs, which are otherwise tied up due to the long distance of the Cape of Good Hope route.

#2- Construction on Tanzania’s Omani-backed USD 10 bn Bagamoyo port is set to kick off next month — ending a decade of holdups and contract discussions with the foreign developers, a senior government official told Reuters. The initial phase of construction will feature 14 berths, though the complete port is planned to include 28 berths in total. Once operational, the facility will be able to handle ships carrying up to 25k containers, the newswire adds.

Part of a bigger picture: The port is part of a larger special economic zone initiative that is set to encompass industrial parks and crucial rail and road infrastructure.

Background: State-run China Merchants Holdings International and Oman’s State General Reserve Fund — a sovereign wealth fund now merged under the Oman Investment Authority — inked contracts to develop the project back in 2013. The original framework was tied to a USD 10 bn plan projecting up to 20 mn TEUs by 2045. However, progress stalled in 2019 after former President John Magufuli criticized the terms — specifically the 99-year lease and tax exemptions. In 2021, talks with the involved foreign investors were revived under the then-new President Samia Suluhu Hassan.

#3- OpenAI enables UAE-based data storage: OpenAI has activated local data residency in the UAE for organizations using ChatGPT Enterprise, ChatGPT Edu, and its API platform, giving businesses, government entities, and universities the option to store data inside the country to meet compliance and governance requirements, according to a statement.

The move comes as adoption continues to climb: OpenAI says its UAE user base has tripled over the past year, with around 60% of 18 to 24-year-olds and 50% of 25 to 34-year-olds using ChatGPT weekly. Enterprise users now include G42, Mubadala, Abu Dhabi Investment Council, Aldar, MBZUAI, Khalifa University, NYU Abu Dhabi, and Tabby.

REMEMBER- Public-service rollout underway: As part of the Stargate UAE initiative, OpenAI and G42 are integrating ChatGPT Plus into public services such as education and healthcare, though personal ChatGPT Plus subscriptions remain USD 20/month.

DISRUPTION WATCH-

#1- China has ordered its airlines to limit Japan-bound flights through March 2026, Bloomberg reports, citing unnamed sources. The decision was made last week in response to comments made by Japan’s newly appointed Prime Minister Sanae Takaichi, who told lawmakers that Chinese aggression against Taiwan jeopardizes Japan’s security and leaves military retaliation on the table, Reuters reported at the time. The order was instated “for now,” indicating that the decision may change if diplomatic relations warm, the sources said.

The impact, in numbers: Flights from China to Japan scheduled for December have fallen by more than 20% compared to October, with cancellations affecting flights through April 2026, the news outlet reported, citing market research outfit China Trading Desk. More than 50% of China-Japan routes are expected to be axed by the end of the year — and Tokyo could sustain as much as USD 1.2 bn in losses in visitor spending.

Cargo flow hangs in the balance: The limit on flights will significantly hinder cargo movement between the two economies, as passenger aircraft’s belly storage typically accounts for 54% of global air cargo capacity, according to a Boeing report (pdf). In 2023, the Shanghai–Tokyo route was the seventh busiest cargo route globally, and its 43% y-o-y growth rate was the highest among the world’s top 10 busiest routes, according to an International Civil Aviation Organization factsheet (pdf).

#2- Nationwide strike cripples Brussels Airport: Belgium’s Brussels Airport is canceling 110 flights scheduled for today amid a three-day nationwide strike that began on Monday, Reuters reports. Some of the airport’s security and ground-handling staff are joining the strike, protesting against the government’s austerity plans. These 110 canceled flights are in addition to cancellations announced earlier this week, while the remaining 93 flights scheduled for today will remain unaffected, a spokesperson said.

MARKET WATCH-

Oil prices went up this morning despite projected oversupply and the prospects of a Russia-Ukraine peace agreement, Reuters reports. Brent crude futures surged by USD 0.27 to USD 62.75 / bbl as of 04:12 GMT, while US West Texas Intermediate (WTI) rose USD 0.24 to USD 58.19 / bbl.

But don’t hold your breath: The gains from today are expected to be temporary rather than reflecting a trend. “The market remains fundamentally skewed to the downside, with investors increasingly pricing in an oversupplied 2026 and no convincing demand catalyst to offset it,” Phillip Nova’s senior market analyst Priyanka Sachdeva told Reuters.

FROM OUR REGION- More Dubai Murban is heading to India: Mangalore Refinery and Petrochemicals (MRPL) has purchased 2 mn bbl of Abu Dhabi’s Murban crude for January loading through a tender awarded to BP, as Indian refineries continue to avoid Russian barrels, Reuters reports.

REMEMBER- Middle East producers are finding a lifeline in China and India — which have been absorbing surplus from the region — as the world’s biggest importers shift away from Russian grades. Chinese state-owned refiner Yanchang Petroleum secured 2 mn bbl of Abu Dhabi Murban from Swiss trader Mercuria last week, while MRPL purchased 2 mn bbl of Abu Dhabi’s Murban for December loading from Glencore to replace the Russian supply. India’s Hindustan Petroleum Corp also booked 2 mn bbl of Abu Dhabi’s Murban crude for January.

ALSO- China’s appetite for Southeast Asian imports suggests growing Iranian oil exports: Suspiciously high Chinese imports of Indonesian crude oil suggest masked shipments of Iranian fuel into the world’s second-largest economy, Reuters reports, citing industry traders. Iran-sourced crude oil is thought by industry experts to be transshipped from Malaysia.

Why the suspicion? Chinese imports of Malaysian and Indonesian crude have somehow exceeded the capacities of Southeast Asian countries — raising scrutiny over the true origin of the cargoes, the newswire reports, citing customs data.

DATA POINT-

Half of the USD 11.6 bn invested in the Suez Canal Economic Zone in the last three and a half years came from China, according to a statement. The China-Egypt Teda industrial zone has so far attracted some USD 3 bn over 200 projects, while the Qantara West Industrial Zone has seen more than USD 700 mn in investments from China.

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CIRCLE YOUR CALENDAR-

Egypt will host the International Procurement Supply Chain Conference on Saturday, 6 December in Cairo. The event will gather over 1k delegates, more than 400 organizations, and over 30 global speakers to discuss the future of trade through keynotes and panel discussions. The discussions will center on Egypt’s transformation in the logistics sector, the future of smart ports and supply chains, as well as digital ecosystems.

Morocco is hosting the Rail Industry Summit on Tuesday, 9 December until Wednesday, 10 December in El Jadida. The two-day event will gather 130 exhibitors, 250 companies, and over 900 participants from 15 countries. It will feature business meetings, high-level conferences, and workshops focused on new market trends and future strategies.

Saudi Arabia is hosting the Saudi Airport Exhibition on Tuesday, 16 December until Wednesday, 17 December in Riyadh. Upwards of 10k global attendees are expected to participate in the event from over 100 countries. The two-day event will focus on airport-related innovation, and will feature participation from Saudia, SolitAir, and Amadeus.

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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