TODAY: Saudi wants to pipe 10 mn bbl / d around Hormuz + Iraq’s first crude trucks could reach Syria soon

Good morning, friends. Gulf producers are busy building ways to move crude around Hormuz, and today’s issue tracks how fast that’s happening.

Saudi Arabia wants to pipe up to 10 mn bbl / d of crude outside the Gulf within two to three years, well above the 7 mn bbl / d its East-West Pipeline can carry today.

Iraq hopes to start trucking crude through Syria by mid-October, about three months late. At full stretch, the route would move roughly 220k bbl / d, a small slice of Iraq’s exports. Tanker truck queues outside Baniyas have already stretched past 30 km, and they’re only carrying fuel oil so far.

The gas crunch gave Egypt every reason to speed up its energy transition, and the question now is who builds it and who pays for it.

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Issue II looks at how the deals behind these projects work, who is lending to them, and why the country is building a nuclear plant at El Dabaa alongside its solar and wind farms. We also look at whether the regional crisis has finally pushed industry toward renewables, and at the factories Egypt is counting on to build its own panels, batteries, and turbines.

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Barrels for roads

Iraq is working on paying Turkish contractors in oil for the USD 17 bn Development Road. Baghdad’sTransport Ministry said it’s setting up an oil-backed fund with Turkey that would pay Turkish companies to build the corridor in exchange for crude, INA reports. The project is still in design, with work planned in three phases running to 2050. Of the USD 17 bn, USD 6.5 bn goes to the highway and USD 10.5 bn to an electric railway, with the phases targeting 2028, 2033, and 2050, AGBI reported.

A World Bank loan covers the first phase: It upgrades existing rail lines from Baghdad to Basra and Umm Qasr in the south and to Mosul in the north, with connections to Al-Faw Port and the Turkish border at Fishkhabur. The bank approved USD 930 mn to modernize more than 1k km of the network.

Oil-for-projects surfaced in August, and Iraq has a precedent. Baghdad and Ankara held two rounds of financing talks in August, including discussions on setting up a dedicated project account and using crude to pay for all or parts of the corridor. Meanwhile, Iraq already uses a similar financing model, with China’s Sinosure financing USD 10 bn of infrastructure that is repaid in crude lifted by Zhenhua Oil and Sinochem.

Fujairah’s party of none

Empty supertankers are turning away from Fujairah — the hub off the UAE where Gulf crude changes ships outside Hormuz, as attacks in the area intensify. At least 10 very large crude carriers (VLCC) and several Suezmax tankers have either halted their journeys or reversed course while approaching the UAE port in recent days, Bloomberg reports.

Fewer ships arriving to take on cargo means longer waits for the shuttle tankers that bring it. Shuttle tankers run Gulf crude through Hormuz and pass it to larger ships waiting off Fujairah and Oman. That workaround helped Gulf exports recover toward pre-war levels, but transfers were already slow. A transfer off Oman was already taking nearly 10 days by late September as tankers waited for crews and equipment.

Shipping costs are the second squeeze:n Supertanker rates from the Middle East to China hit a record USD 656k per day in late August, more than 10 times a year earlier. Hiring a supertanker from the US to China now costs USD 80 mn more than a roughly USD 74 mn SpaceX Falcon 9 launch, Bloomberg reported, citing shipbroker Gibson. One recent booking hit USD 41 / bbl, up from an average USD 4.5 / bbl last year.

Some of the transfers have moved as far as India: Two VLCCs recently moved Gulf crude to other supertankers in India’s Gulf of Kutch, and the receiving ships sailed on toward Singapore and South Korea.

Ammonia is back on the move

A ship has sailed into the Gulf to load ammonia for the first time since the war began, aside from Iranian-linked vessels, and its cargo is headed for India. The 25k-ton Gas Aqua loaded at Saudi Arabia’s Ras al-Khair on 3–6 October, crossed Hormuz, and transferred its cargo to the Searambler off Oman on 11–12 October, S&P reports. Kpler expects it to reach India’s Paradip port by 20 October, where it will most likely go to contract customers who haven’t received Saudi volumes since March, Argus Media reports. Saudi producers delivered more than 1 mn tons to India in 2025, against 146k tons so far this year.

Most owners have stayed away, because ammonia is toxic and can be explosive, Argus says. Only three non-Iranian cargoes have crossed Hormuz since the war began, all on ships already inside the Gulf, S&P reports. With no pipeline around the strait and less room to absorb rising freight and war-risk costs, t ammonia shipments had all but stoppedeven as Gulf crude exports returned to roughly prewar levels by the end of September.

Market watch

Oil prices rose this morning after two vessels were hit in Hormuz and Iran vowed to step up attacks on shipping, Reuters reports. Brent crude futures increased USD 0.63 to USD 106.32 / bbl by 03.45 GMT, while West Texas Intermediate (WTI) gained USD 0.622 to USD 94.80 / bbl.

The Baltic Index continues its losing trajectory: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 1.8% to 2,801 points on Tuesday. The capesize index dipped 3.7% to 3,994 points, while the panamax remained unchanged at 2,432 points. The smaller supramax inched up 0.7% to 1,833 points.

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