TODAY: What if the next gas hub is a fleet, not a terminal?

Good morning, friends. We're opening with a question we've been circling for weeks: Does an LNG hub actually need a terminal, or just a well-positioned fleet of ships? The Gulf war has become an unexpected stress test. Some LNG carriers got stranded, freight rates hit multi-year highs, and the disruption is forcing a rethink of whether pipes matter as much as optionality.

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Europe joins the mine sweep

Tehran is weighing whether to let European nations help clear mines from Hormuz — a concession that could tie an emerging US-Iran de-escalation to the practical reopening of the waterway, Bloomberg reports. The plan is conditional on a lasting ceasefire, Iranian security guarantees for the European vessels, and sign-off from the IRGC, where some officials still want Iran to handle the operation alone.

The proposed mission is tied to an Iran-Oman plan for a new central shipping channel through the strait. That route is thought to be mined, making clearance work a prerequisite for turning any political agreement into an operational passage. Even a cleared channel wouldn't resolve the bigger dispute as Tehran is still seeking authority over the strait and the right to charge ships for access — a core point of contention with Washington.

Not the first time: The US had already begun setting the conditions for mine-clearance operations and expanded war–risk support for transiting vessels to USD 40 bn in an effort to keep the limited corridor usable. But a Pentagon assessment warned that fully clearing Hormuz could take up to six months and may not begin until the war ends.

Making room for LPG

Iraq has begun trial operations at a new LPG storage depot in Najaf with capacity of 3k cbm, Shafaq News reports. The facility is part of a wider program to expand LPG production, storage, transport, and distribution capacity. LPG will move directly by pipeline instead of tanker trucks — reducing road traffic and strengthening supply reliability between production facilities and local storage. The project comes as Iraq's LPG market tightens, with daily output of around 4.5k tonnes trailing demand of roughly 4.7k tonnes, leaving strategic reserves at about 50k tonnes.

Market watch

Oil prices eased this morning on Iran-Oman talks and prospects for reopening Hormuz, Reuters reports. Brent crude futures slipped USD 0.33 to USD 79.12 / bbl by 04.18 GMT, while West Texas Intermediate (WTI) decreased USD 0.42 to USD 74.80 / bbl.

The Baltic Index gains ground: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — jumped 4.3% to 3,063 points on Wednesday, buoyed by the bigger segments. The capesize index climbed 6.6% to 5,094 points, while the panamax gained 2.2% to 2,236 points. The smaller supramax eased 0.1% to 1,612 points.

Data point

52.7 — that's the UAE's non-oil PMI reading in July, up from June's five-year low of 50.8, and the sharpest improvement in business conditions in four months, according to an S&P Global note (pdf). The reading pushes the index further above the 50-point line separating growth from contraction.

New orders, exports, and hiring returned to growth: New orders accelerated to their quickest rate since February on the back of infrastructure projects and an uptick in sentiment, despite persistent tight budgets, while export orders saw their first expansion since March. A pickup in domestic demand led to hiring expansion after June’s six-year low and prompted a slight output expansion, but with a growing backlog of work due to freight congestion.

Margins are still getting squeezed: Inventories shrank at their fastest rate since December 2025 as delayed deliveries kept supply schedules stretched. Input costs, meanwhile, crept close to April's peak on higher fuel, food, software, shipping, and staff costs — costs businesses could not fully pass on to customers given how competitive the market remains, S&P Global Principal Economist David Owen said.

Smoother sailing through Hormuz is helping. Owen added that easing shipping disruptions through the strait, plus a rebound in client confidence, suggest firms are managing the war's 2Q fallout better than the headline numbers alone might suggest.

Dubai's own PMI told a similar story: It rose to 51.7 from June's 50.7, powered by a rise in new business and consumer demand — even as business activity growth hit its weakest pace since June 2021.

Looking ahead: Business confidence is still low, with only 7% of surveyed firms expecting an uplift in output over the coming year.

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