Good morning, folks. US President Donald Trump’s Hormuz toll had a shelf life of about 20 hours — he scrapped the proposed 20% shipping fee on Tuesday after Gulf allies pushed back, saying he’d rather see “massive investments” from the region.

That “de-escalation” lasted about as long as the fee did. The US hit Iran for a fifth straight day yesterday, and Trump is now threatening bridges and eventually power plants unless Tehran stops targeting shipping and lets Hormuz reopen, Bloomberg reports. Iran’s Revolutionary Guard said that each strike only pushes the reopening further back, adding that regional oil and gas stays “available to all or available to none” for as long as this goes on.

The oil market is feeling all of it: Overall traffic through Hormuz stayed thin yesterday, shipowners stuck choosing between an Iran-approved route that risks sanctions exposure and the Omani coast, which risks getting hit, Bloomberg reports. Gulf crude exports have slid back below 50% of pre-war levels, down from over 80% during the now-collapsed interim agreement, Reuters reports, citing a note by Goldman Sachs. The bank expects near-term upward pressure on prices to persist — and warns the next recovery could be slower than the last one, even if tensions ease.

And now a second chokepoint’s in play: Houthi officials are threatening to close Bab Al Mandeb too if the “US-backed Saudi campaign” against Yemen doesn’t stop. Analysts cited by Reuters say Iran could activate that front if US strikes reach its infrastructure — though that’s a big enough escalation to risk a broader response.

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Another airspace closure

Back on the no-fly list: The European Union Aviation Safety Agency (EASA) — the EU aviation safety regulator — has advised its regulated carriers and non-EU airlines operating to and from the bloc under its authorization not to fly at any altitude through the airspace of Bahrain, Kuwait, Qatar, and the UAE, according to a bulletin. The warning also covers the Gulf of Oman and will remain valid through 29 July unless reviewed earlier.

The warning has teeth this time: The EASA had withdrawn its broader regional bulletin on 8 July after the ceasefire temporarily lowered the threat level, replacing it with a lower-level note that only asked airlines to exercise caution over the Gulf states. The current warning recommends avoiding the affected airspace altogether, citing the risk of missile and drone overflights, interception activity, falling debris, and civil aircraft being misidentified by air-defense systems operating with little or no warning.

The bulletin doesn’t close the region’s skies itself, but it could sharply constrain Europe-Asia connectivity. European carriers have already cut several destinations and are increasingly steering around higher-risk zones, reducing the number of viable routes linking Europe with Asia, Bloomberg reports.

Baghdad raises the bar

Baghdad is pushing Turkey to reserve 750k bbl / d of capacity for its northern crude exports — nearly quadruple current flows of 180k-200k bbl / d — to bridge a one-year gap past the transit accord’s 27 July expiry, Turkish media reports, citing Energy Minister Alparslan Bayraktar. Ankara says it has the capacity to accommodate the request.

The pipeline has a nameplate capacity of 1 mn bbl / d, but carried only around 480k bbl / d before its 2023 shutdown, so 750k would put flows 56% above their pre-shutdown level, on a route that only came back online in March. Baghdad believes it can get there fast — in June it set a target of 770k bbl / d within roughly two and a half months, close to the volume it now wants locked in.

Both sides are already looking past the stopgap. Ankara wants a longer-term agreement that would run the line south to Basra and lift capacity to 2.5 mn bbl / d, which the energy minister said could also carry Kuwaiti and other Gulf crude. On the Iraqi side, a planned 2.3 mn bbl / d Basra-Haditha pipeline could eventually push southern barrels north into the same corridor.

Avoiding Hormuz now has a price tag for oil buyers

Adnoc just extended its Hormuz bypass to a new set of customers. Adnoc will now sell three offshore crude grades — Upper Zakum, Das, and Umm Lulu — to long-term contract buyers for collection outside the Strait of Hormuz, via ship-to-ship transfer at Fujairah, according to a price sheet seen by Bloomberg. Adnoc has been selling these same grades on a spot basis from Fujairah for a while, but this is the first time the bypass option has been opened up to customers locked into long-term contracts.

The price is indexed to Dubai, not Murban, and it costs more. Upper Zakum and Das carry a USD 0.8 / bbl premium to the Dubai benchmark, while Umm Lulu carries a USD 1 premium. Buyers who’d rather collect the same grades the traditional way — at Adnoc’s Gulf terminals, arranging their own shipping through Hormuz — pay parity with flagship Murban instead, priced at USD 80.01 / bbl for August loading.

REMEMBER- Adnoc was consulting refiners and traders earlier this month on a broader proposal to price the official selling prices for Upper Zakum, Das, and Um Lulu as differentials to Dubai, replacing the Murban-linked methodology.

What’s next: Adnoc described the move only as a response to “current market conditions,” without elaborating — so watch whether uptake from long-term buyers gives them the data to push the Dubai-linked formula into their full official selling prices, not just this Fujairah carve-out.

Market watch

Oil prices fell this morning as traders weighed fresh US strikes on Iran, Reuters reports. Brent crude futures decreased USD 0.24 to USD 84.95 / bbl by 04.35 GMT, while West Texas Intermediate (WTI) slipped USD 0.15 to USD 79.45 / bbl.

The Baltic Index breaks its run of gains: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — was down 1.7% to 2,929 points on Wednesday, driven by the larger segments. The capesize index declined 3.3% to 4,594 points, while the panamax index rose by 0.3% to 2,258 points. The smaller supramax index was up 0.6% to 1,720 points.

Data point

7.1 mn tons — that’s how much cargo Jordan imported through Aqaba Port in 1H 2026, up 43.7 y-o-y, while exports fell 7.8% to 4.95 mn tons. Total container throughput edged up 1% to 472.7k TEUs, while transit volumes surged 155.1% to 60.2k TEUs.

PSA

Maersk rolls out another ECS hike: Maersk is raising its emergency contingency surcharge (ECS) by USD 1k per container on shipments from the Indian subcontinent to North Europe and the Mediterranean under its E3W and E4Q services from 1 August, according to a statement. The revised fee will range between USD 3.5k-4.8k per container, depending on the origin, destination, and equipment type.

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