Good morning, friends, and happy early Eid Al Fitr. We might be heading into the holidays, but trade isn’t pausing — flows are already shifting, with trucks stepping in where ships can’t. Meanwhile, Iraq is bringing Ceyhan back into play — a move that could add flexibility as Hormuz risks linger. Shall we?

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Watch this space

TRADE — Iraq, KRG find a fix for Ceyhan flows? Iraq and the Kurdistan Regional Government (KRG) have reached an agreement to resume oil exports through Turkey’s Ceyhan port. The move ends a long-stand deadlock over revenue sharing and technical fees that kept the pipeline dry — even as Baghdad scrambled for alternatives through Syria’s Baniyas port and Jordan’s Aqaba port.

Why this matters: The restart offers a crucial workaround to Hormuz constraints. Restoring flows could enable Iraq to ship up to 250k bbl/d from Kirkuk’s northern fields, with potential to add another 200k bbl/d from the Kurdistan region — bringing total volumes near 450k bbl/d.

But Hormuz isn’t out of the equation yet. Iraq is in talks with Iran to allow some tankers safe passage through the strait following attacks in Iraqi waters. The disruption has slashed output by roughly 70%—from 4.3 mn bbl/d to just 1.3 mn bbl/d this month — effectively cutting off the southern export route.

A backup plan in play: Beyond the pipeline, Iraq is advancing dry-land export routes, aiming to move 100k-200k bpd by truck to Baniyas and Aqaba.

DISRUPTION WATCH — Dubai International Airport continued to face severe operational bottlenecks following strikes, the Financial Times reports. After our airspace was temporarily shuttered Tuesday morning following an attack on a fuel tank earlier on Monday, and more reported attacks later in the night, flights restarted, though the airport continued to grapple with a backlog of cancellations and severe delays.

Daily port loadings have also been taking a hit: Loadings in Fujairah plummeted by 66% during the week of 9 March, falling significantly from the 1.9 mn bbl / d seen a week prior, Lloyd’s List reports, citing data by market analytics firm Vortexa.

Market watch

Oil prices fell over USD 2 this morning Iraq and Kurdish authorities agreed to resume exports, easing supply concerns, Reuters reports. Brent crude futures eased USD 2.26 to USD 101.16 / bbl by 03.57 GMT after climbing 3% on Tuesday, while US West Texas Intermediate (WTI) declined USD 2.99 to USD 93.22 / bbl.

Meanwhile, Middle East crude benchmarks are printing record highs: Dubai hit USD 153.25 / bbl for May loading cargoes, while Oman futures touched USD 147.79 / bbl, Reuters reports citing Platts. The premium to Dubai swaps surged to USD 56 /bbl from just USD 0.90 in February, with Oman showing a similar spike.

The demand side is already reacting: Crude flows to Asia dropped to 11.7 mn bbl / d in March from some 19 mn bbl / d in February. With Dubai pricing the bulk of Gulf crude into Asia, the spike is forcing buyers to either hunt alternatives or simply process less. Meanwhile, the spread with Murban, sitting at USD 111.76 / bbl, is stretching credibility, exposing how disconnected the benchmark has become from actual tradeable barrels.

The physical market is collapsing underneath the benchmark: Exports fell by some 60-70% by this week vs February levels, with flows dropping to as low as 7.5-9.7 mn bbl / d from some 25-26 mn bbl / d. Producers are shutting in output as storage fills up — with floating storage swelling to more than 50 mn barrels from some 10 mn pre war — forcing cuts estimated at 7-10 mn bbl / d across the region.

The real issue sits inside the benchmark itself — a shrinking pool of trades is setting the global prices. Platts dropped three grades tied to Hormuz flows, leaving Oman and Murban to anchor the pricing window. Traders say the Market on Close window is effectively dominated by a single buyer, with TotalEnergies lifting 24 cargoes, or 12 mn bbl this month — enough to shape the curve. Platts is now reviewing its methodology.

The Baltic Index breaks losing streak: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 0.7% to 2,024 points on Wednesday. The capesize declined 1.3% to 2,888 points, while the panamax index gained 0.9% to 1,853. The smaller supramax index shed 1% to 1,256 points.

PSA

Oman Air Cargo adds fuel, war-risk surcharges: Oman Air Cargo is introducing fuel and war-risk surcharges across its cargo network — starting today — as jet fuel volatility and conflict-linked ins. costs push up operating expenses. The fuel surcharge will be reset weekly against the US Gulf Coast Jet A1 benchmark, while the war-risk fee will be charged per kilogram based on the shipment’s chargeable weight.

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