TODAY: Adnoc doubles down on US natgas push

Good morning, friends. We have a balanced issue for you this morning — led by Adnoc’s plan to invest tens of bns of USD in the US to build its natural gas business. But first, you didn’t think the UAE’s decision to leave Opec was going to leave energy markets unscathed?

Early reactions split sharply between optimism and caution: US President Donald Trump believes the move will lower energy prices, Bloomberg reports. “It’s a good thing for getting the price of gas down, getting oil down, getting everything down,” Trump said. Russia’s Finance Minister made a similar argument, saying that the exit will prompt the oil cartel to boost production, which will bring down energy prices in the future.

Not everyone is convinced: Goldman Sachs predicts the exit will trigger greater upside risk to oil supply in the medium term, given that UAE crude production is set to reach 3.8 mn bbl / d by October 2026.

Markets, at least for now, appear to be siding with the more cautious camp. The global benchmark surpassed the USD 120 per barrel mark in the early hours of the morning, briefly hovering at around USD 122 — its highest level since 2022 — before easing. This followed reports of a prolonged US naval blockade of Iran.

Watch this space

PIPELINES — Morocco is lining up funding for the USD 25 bn Nigeria-Morocco gas pipeline, with the country’s National Office of Hydrocarbons and Mines gearing up for its first financing push since transitioning into a joint-stock company in February, Bloomberg reports. The structural shift grants the agency greater flexibility to structure partnerships and tap diverse funding pools. Details on the size, timing, and format of the planned raise are yet to be disclosed.

BACKGROUND- An intergovernmental agreement on the project — named the African Atlantic Gas Pipeline — is set to be signed this year. The 6.9k-km pipeline is designed as a phased, coast-hugging system with a capacity to pump 30 bcm annually. It will link 13 countries before reaching Morocco, where it integrates with the Maghreb-Europe Gas pipeline to facilitate exports directly into the EU via Spain.

Gas in the Mediterranean could be the next big thing — with competition for European demand heating up with countries like Algeria, which has a similar model, Egypt with its LNG processing model, and Libya with its “recovery” model.

ENERGY — Aramco will keep suspending LPG shipments from its Juaymah export facility through May as the site has yet to recover from the structural damage sustained in late February, Bloomberg reports, citing people it says are familiar with the matter. Repairs have reportedly been delayed, preventing a restart in exports even if regional shipping routes improve.

Why this matters: Juaymah handles about 3.5% of global waterborne LPG exports — making the outage a meaningful disruption in a niche but important fuel market. The supply squeeze has pushed LPG prices higher and forced buyers — particularly in Asia and India, where LPG is widely used for cooking — to seek alternatives.

TRADE — Starting tomorrow, exporters in Egypt and 52 other African nations will get zero-tariff access to the world’s second most populous country, which Chinese Foreign Ministry Spokesperson Lin Jian told reporters will encourage China-Africa trade and investment cooperation.

China is already one of Egypt’s largest trading partners. Chinese exports to Egypt hit nearly USD 17 bn in 2024, while Egyptian exports to China barely crossed the USD 1 bn mark. Now every African nation is getting the same treatment under this expanded program. Since late 2024, China has included any nation across the world classified by the UN as a least developed country under its zero-tariff regime, in addition to a set of extensive reciprocal trade agreements across Asia, Australasia, and Latin America that ensure zero-tariff access for most goods.

AVIATION — Kuwait Petroleum International wants to expand cooperation with Emirates National Oil Company (Enoc) to cover Sharjah International Airport through its subsidiary Q8 Aviation, Arab Times reports. The move builds on an existing foothold in Dubai, where Q8 Aviation already supplies fuel through its Enoc partnership.

BACKGROUND- Q8 Aviation partnered with Enoc for its entry into the UAE’s fuel sector, which saw challenges from already entrenched suppliers. The partnership opened the door for operations at Dubai International Airport with Royal Brunei Airlines and Al Maktoum International Airport with Air Baltic and Hainan Airlines, focusing on international flights.

Securing jet fuel is becoming a major concern for international airlines as of late. Global disruptions and rising demand drove jet fuel prices up 103% in March, a spike that consumers are expected to feel first through higher ticket costs.

Market watch

Oil prices climbed 7% this morning on reports of possible US military action against Iran — raising fears of further Middle East supply disruptions, Reuters reports. Brent crude futures for June rose USD 6.81 to trade at USD 124.84 / bbl by 05.27 GMT, while US West Texas Intermediate (WTI) gained USD 2.76 to USD 109.64 / bbl.

The Baltic Index snaps losing streak: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 0.3% to 2,670 points on Wednesday. The capesize index declined 0.5% to 4,238 points, while the panamax index climbed 0.7% to 1,979. The smaller supramax slipped 0.5% to 1,534 points.

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PSA

MSC raises Far East–to–Europe and North Africa FAK rates: MSC will hike Freight All Kinds rates effective 15-31 May for cargo moving from all Far East ports to North Europe, the Mediterranean, North Africa, and the Black Sea. Forty-foot container rates are set at USD 4.5k–4.7k across Europe and the Black Sea, while North Africa remains the priciest leg, with rates reaching USD 6.9k (Algeria), USD 6.5k (Tunisia), USD 6.2k (Libya), and USD 5.5k (Casablanca).

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