TODAY: Saudi war risk tests Egypt’s oil corridor + Tamar partners ink Egypt gas non-binding MoU

Good morning, nice people. It’s a hedging-heavy morning — everyone seems to have a backup plan. Saudi oil took its first hit on land this weekend — not a tanker, the refinery itself — and Aramco is already looking for the side door. It’s leaning harder on Egypt’s Sidi Kerir to keep crude moving without going anywhere near the Red Sea. On the gas side, Two Tamar partners signed a non-binding MoU that would be Tamar’s third long-term gas supply agreement with Egypt, layered over the field’s existing contracts. The volume is one thing, but the bigger point is what it does for Egypt — every one of these agreements running through Egyptian terminals strengthens the gateway position the country has spent years building.

ALSO- The skies are thinning out again, right on cue. International carriers are cutting and suspending Saudi routes as the region heats back up. British Airways has permanently suspended flights to Jeddah and will reduce its Riyadh service to one daily flight from two starting 8 August, Lufthansa is grounded into October, and Dubai is catching the worst of the airspace avoidance. The recovery that had been quietly building since February is unwinding just as fast as it came.

The upper hand changes hands

The UAE’s LNG ambitions are running into a tougher negotiating environment. Asian and European buyers are looking for lower prices and stronger supply assurances from Emirati and Qatari LNG suppliers as continued disruption through Hormuz adds a risk premium, Reuters reported, citing industry sources.

A buyer’s market: Higher ins. costs and recent shipping disruptions are shifting more bargaining power toward buyers as new long-term contracts come up for negotiation. While the UAE has built a reputation for offering more flexible contract terms, buyers now say future agreements will also need to account for higher geopolitical and ins. risks. Growing production from alternative markets like the US, Canada, and Mozambique is expected to strengthen buyers’ negotiating position in the years ahead, they said. Buyers are also expected to ask Gulf exporters for commitments to provide replacement cargoes if shipments through Hormuz are disrupted.

Some are already pushing on price: Some recent agreements have been signed closer to 12.3% of Brent crude prices, the sources said, suggesting buyers are already negotiating markdowns to reflect the higher risk, with pre-war contracts typically priced at 12.6-12.7%.

Pump it louder

Opec+ will likely wave through another output-target hike from September when it meets on 2 August, three sources told Reuters, expecting the same roughly 188k bbl / d bump as June, July, and August. The seven core producers, including Saudi Arabia, Iraq, and Russia, are racing to reclaim market share for when the Iran war ends.

The catch: The cartel can’t actually pump out the quotas they set. Group output sank to 36.28 mn bbl / d in June, down from nearly 43 mn bbl / d pre-war, with Hormuz throttled and Houthis now hitting Saudi tankers.

Market watch

Oil prices slipped 4% this morning as US-Iran pause in hostilities eased concerns over Hormuz disruptions, Reuters reports. Brent crude futures dipped USD 3.96 to USD 92.82 / bbl by 03.29 GMT, while West Texas Intermediate (WTI) declined USD 4.02 to USD 85.29 / bbl.

The Baltic Index edges higher: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — rose 0.7% to 2,743 points on Friday. The capesize index climbed 2.1% to 4,285 points, while the panamax dipped 2% to 2,024 points. The smaller supramax slipped 0.5% at 1,694 points.

The Drewry World Container Index fell 4% to USD 4,374 per 40-ft container last week, according to the latest index readings. The decline came as transpacific and Asia-Europe rates moved lower, led by drops on Shanghai-Rotterdam (6%), Shanghai-Genoa (5%), Shanghai-New York (4%), and Shanghai-Rotterdam (1%). US-Iran tensions and concerns over Hormuz have prompted several carriers to introduce emergency fuel surcharges from August, even as added capacity and softer demand pushed major East-West rates lower for a second week. Geopolitical risks and uncertainty over US tariff policy could still shape rates in the coming weeks.

PSA

CMA CGM is layering two price hikes onto Mediterranean-Gulf cargo. The French shipping giant will apply new FAK (freight all kinds) rates on dry cargo and paying empties moving from Mediterranean ports to the Gulf and Red Sea from 1 August until further notice, according to a statement. Gulf-bound rates will range between USD 7.6k-8.4k per container, while Red Sea rates will range between USD 3.4k-4.9k. The carrier will also levy a peak-season surcharge of USD 1.5k on most Mediterranean- and North Africa-origin cargo bound for the two regions — except shipments from the West Mediterranean and North Africa to the Red Sea, which will carry a USD 500 surcharge.

Destination Sahel is back for a second edition — and this year, it’s not just about the beach.

Gulf sovereign wealth funds are pouring bns into the North Coast, Gulf buyers keep showing up despite regional headwinds, and a new 400-km master plan could reshape the whole coastline before summer’s out.

Over this season’s series, stay tuned to see who’s really buying Sahel, where the money’s coming from, and what could still go wrong.

Plus, the hotels, restaurants, and openings worth checking out this summer.

Tap or click here to subscribe to the Egypt edition, coming out in your inbox, Wednesday, 29 July.

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