Good morning, nice people. Yes, Hormuz is still proving tricky, and exporters are dusting off old routes — with Saudi Arabia leaning on Yanbu to potentially move 50 mn barrels if fully loaded.

Force majeure this, force majeure that — but what does it actually mean? We dive deep into the implications of Gulf nations closing the taps on energy production and how it can ripple through global supply chains.

The big logistics story abroad

IEA opens the emergency taps: In a turnaround, the International Energy Agency (IEA) said it is releasing 400 mn barrels of oil from the 32 member states’ strategic reserves. The barrels will be released over a set time period and be allocated according to each country’s needs.

The US is planningto release 172 mn barrels of oil from its emergency reserve. The Trump administration will start releasing barrels over the coming weeks and over a 120-day period. Germany also announced it will release 19.51 mn barrels from its strategic reserve, while Japan has already moved ahead with plans to release both privateand state reserves before the wider mechanism is fully locked in.

We were expecting things to go differently after the G7 and IEA said they are holding off on releasing oil reserves earlier this week. We suspect that Iran’s Revolutionary Guards recently saying it wouldn’t allow “one liter of oil” to leave the region should US-Israeli strikes continue and Brent briefly hitting USD 120 bbl had something to do with the change of heart.

How much difference will 400 mn make? To put it into perspective, pre-war, around 20 mn barrels passed through the Strait of Hormuz everyday, representing around 25% of maritime oil trade. This means that the barrels should cover around 20 days’ worth of supply.

IN CONTEXT- The 400 mn figure is significantly larger than the 182 mn released by the agency when Russia invaded Ukraine, making it the largest move of its kind.

Iran’s message: “Get ready for oil to be USD 200 per barrel,” a military spokesperson said in comments picked up by Reuters.

Watch this space

CUSTOMS — The Egyptian Customs Authority has suspended Advanced Cargo Information (ACI) requirements for transit shipments in and out of Gulf states, according to a circular from the Authority seen by EnterpriseAM. The three-month suspension comes as Egypt works to both funnel Gulf energy out of the country and goods in as the closure of the Hormuz Strait closes the GCC’s main trade connection with the rest of the world.

The details: Indirect transit shipments heading that will then head to ports in Nuweiba, Ain Sokhna, or Safaga to cross the Red Sea into the Gulf, along with Gulf exports that will arrive in Egypt before moving to a third country are now exempt from preregistration to get an Advance Cargo Information Declaration number before arriving on Egyptian shores. Both the importer and exporter however are not allowed to be Egyptian.

Why this matters: While the need to support our Gulf neighbours in this time of need is worthy in and of itself, the move to facilitate the movement of goods and energy in and out of the country is laying the groundwork for Egypt to become the GCC’s Hormuz Strait-proof gateway to the Mediterranean and the rest of the world if we ever see a conflict like this arise again in the future.

REMEMBER- This isn’t the only state-led effort to position Egypt as a logistics bridge for the GCC amid the Hormuz Strait closure, with the country offering up its Sumed pipeline that runs from Ain Sokhna to Sidi Kerir and 10 additional Red Sea storage facilities to help export Saudi crude from the Mediterranean.

AVIATION — Boeing’s push to expedite 737 MAX deliveries has faced another hiccup, shaking its shares down 3% in US trading. Scratched wiring on a group of undelivered jets is set to delay some first-quarter handovers, but Boeing still aims to deliver around 500 737s this year. The company was just starting to show cleaner execution, delivering 51 aircraft in February — including 43 737 MAX jets — which is the strongest delivery output since 2017.

SHIPPING — Cosco suspends Balboa activity: Chinese shipping giant Cosco halted activity at the Pacific-side terminal after Panama tore up CK Hutchison’s concession, handing temporary control of Balboa to APM Terminal for up to 18 months. The move comes in the wake of CK Hutchison’s disrupted USD 23 bn sale of 43 port assets to a consortium led by US asset manager BlackRock and the shipping giant MSC.

REMEMBER- CK Hutchison has launched international arbitration proceedings against Panama back in February — following Panama’s Supreme Court’s annulment of the firm’s 30-year port concessions to operate the Balboa and Cristobal container terminals.

Market watch

Oil prices climbed this morning as Iran escalated attacks amid fears of disruptions in the Strait of Hormuz, Reuters reports. Brent crude futures gained USD 8.54 to trade at USD 100.52 / bb by 03.54 GMT, while US West Texas Intermediate (WTI) increased USD 8.28 to USD 94.47 / bbl.

The Baltic Index gets a small lift: The Baltic Exchange’s dry bulk sea which tracks rates for the capesize, panamax, and supramax vessel segments — inched up 0.4% to 1,926 points on Wednesday, following a 7.1% fall in the previous session. The capesize climbed 2.9% to 2,574 points, while the panamax index fell another 1.6% to 1,831. The smaller supramax index declined 2.2% to 1,312 points.

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