TODAY: Is bypassing Hormuz creating a tanker bottleneck?

Good morning, friends. Today’s theme is routes: some being rerouted, others being built from scratch. Iraq’s Somo is now offering Basrah crude for ship-to-ship pickup near Oman next month — the first time Iraqi barrels have been sold outside the Arabian Gulf since the war began. Meanwhile, Saudi Arabia signed several MoUs with Damascus this week covering roads, rail, and aviation, with parallel talks on a submarine cable and a Flynas-backed Syrian airline.

Then Hormuz reminded everyone that the calm was borrowed time: US forces targeted two Iranian rocket launchers on Larak Island in the Strait of Hormuz. US officials called the action a preemptive strike, reporting that Iranian forces were preparing to deploy sea mines into the waterway. Iran responded by launching missiles toward Jordan, though they were reportedly intercepted.

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Qatar’s LNG freeze drags on

Qatar’s LNG cancellations are stretching into November: QatarEnergy has extended force majeure on LNG deliveries to Italy’s Edison until early November, canceling another five cargoes due between late September and the beginning of November, Reuters reports. That brings Edison’s total canceled Qatari deliveries since supplies stopped in April to 29 cargoes — equivalent to 3.8 bcm of gas. Edison’s 25-year supply contract with QatarEnergy covers 6.4 bcm annually, or around 10% of Italy’s gas consumption.

Edison has so far been able to replace most of the physical supply through other LNG purchases. The Italian firm says it sourced 21 replacement cargoes through the Adriatic LNG terminal as of 28 August and can continue meeting its commercial commitments.

Qatari LNG exports have fallen 96% since the Iran war began, with just 18 cargoes shipped over roughly six months compared with 509 over the same period last year. The shortfall has helped push US LNG exports higher and comes as Europe enters the final stretch of its winter storage build, making every additional month of disrupted Qatari supply harder to absorb cheaply.

Egypt’s container upgrade

Egypt’s Transport Ministry plans to invest c. USD 160 mn to build four new container ships in China, with manufacturing set to start in 2028 and take about four years, Asharq Business reports, citing three government officials. A final agreement is expected by the end of 2027, and the ships would be self-financed through the Holding Co. for Maritime and Land Transport and its subsidiary National Navigation Company (NNC). Transport Minister Kamel El Wazir is conditioning the agreement on Chinese participation in a new ship-repair yard in Alexandria — backed by three Egyptian entities — as part of a push to localize repair and maintenance work and cut reliance on foreign yards.

For NNC, the order would be a notable change in what it carries. The company has 16 vessels today — 15 bulk carriers and one container ship, according to its website. Four new container vessels would materially increase its exposure to container shipping rather than simply add to its existing dry-bulk fleet.

Market watch

Oil prices surged more than 2% this morning after US-Iran strikes in Hormuz escalated the six-month-old conflict, Reuters reports. Brent crude futures increased USD 2.51 to USD 90.61 / bbl by 02.41 GMT, while West Texas Intermediate (WTI) gained USD 2.13 to USD 85.53 / 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 2.5% to 3,186 points on Friday. The capesize index climbed 3.9% to 5,336 points, while the panamax rose by 1% to 2,315 points. The smaller supramax edged up 0.1% to 1,647 points.

The Drewry World Container Index slipped 1% to USD 4,473 per 40-ft container last week, according to the latest index readings. Transpacific rates weakened — Shanghai-New York went down 2%, while Shanghai-Los Angeles was unchanged. Asia-Europe lanes also moved lower, with Shanghai-Rotterdam down 3% and Shanghai-Genoa down 2%. The market remains volatile as Hormuz uncertainty, Asian port congestion, low Rhine water levels, and tighter Panama Canal capacity disrupt flows, even as some carriers cautiously return to the Suez Canal.

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