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Wednesday, 21 Oct 2026

What We’re Tracking Today
The Big Story Today
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Fuel costs are making Gulf airlines rethink how long to keep older jets flying

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Today at a glance

1

The Big Story Today

Fuel is now 31.4% of airline costs, and Gulf carriers are splitting on older jets.
2

STORAGE + WAREHOUSES

Egypt readies four more strategic warehouses for PPPs as costs double the 2022 budget.
3

WHAT WE’RE TRACKING TODAY

Egypt and Chevron initial Aphrodite’s fiscal agreement, but a pipeline fee dispute is still open.
4

WHAT WE’RE TRACKING TODAY

Aramco and Asian refiners are at odds over whether spot barrels count toward 2026 contracts.
5

Logistics in the News

The war is fueling an energy export boom across the Americas.

Wednesday, 21 Oct 2026

What We’re Tracking Today
The Big Story Today
Storage + Warehouses
Also On Our Radar
Logistics In The News
Calendar
1

WHAT WE’RE TRACKING TODAY

TODAY: Gulf airlines rethink older jets + Egypt opens more warehouses to investors

Good morning, ladies and gents. We’ve got another full runway today. Our big story looks at how fuel, now set to make up 31.4% of airline operating costs this year, is pushing Gulf carriers to rethink how long to keep older jets flying. Qatar Airways is retiring its A330s, Emirates is spending on retrofits, and Saudia is bringing in newer aircraft.

Also in today’s issue: Egypt and Chevron have initialed the fiscal agreement for Cyprus’ Aphrodite gas field, but a fight over the pipeline fee is still open. Aramco and its Asian buyers are at odds over 2027 contracts ahead of the usual end-October deadline, and Asyad Group is selling up to 6.25% of Asyad Shipping. Egypt is also preparing four more strategic warehouses to offer to private investors.

Pipe dreams

Egypt and Chevron have initialed the fiscal agreement for Cyprus’ Aphrodite gas field. The agreement sets the fiscal regime for developing the field and connecting it to Egyptian infrastructure, according to an Oil Ministry statement. The plan is for Egypt to receive, process, and liquefy the gas, then send it to local and global markets depending on demand and the project’s economics, the ministry said, without disclosing terms.

A dispute over the pipeline fee is still open. Chevron and its partners have proposed a transport charge of around USD 3/mmBtu for the Egyptian section of the pipeline, against the roughly USD 1/mmBtu previously envisaged, Mees reports. Cyprus has asked the partners for a more competitive proposal, and the dispute is complicating talks on a binding gas sales agreement with Egas.

The fee fight is putting pressure on the investment timetable. The Egyptian section will be built and run by Aphrodite Midstream, which includes the field partners and an Egypt-appointed entity. A higher tariff would raise its earnings while increasing the cost of the gas to Egas, Mees says. At plateau sales of 700 mmcf/d, it would add about USD 500 mn a year in transport charges. Cyprus has no stake in the pipeline company, so its revenues from the field could fall, though by less than that amount. The partners face a contractual June 2027 deadline for a final investment decision, but NewMed now lists it in 2028, with first gas in 2031, Mees reports.

REMEMBER- Egypt has agreed to buy all of Aphrodite’s gas: EGAS signed a term sheet in April for the field’s entire output over 15 years, with up to 700 mmcf/d landing at Port Said for the first six years.

Spot check

Aramco and its Asian buyers are at odds over this year’s spot purchases, complicating their 2027 supply agreements, Bloomberg reports, citing traders familiar with the talks. The refiners’ annual contracts commit them to buy set volumes of Saudi crude. During the Hormuz disruptions, some of that crude was bought on the spot market instead, through one-off agreements. The two sides now disagree over whether those spot barrels count toward the refiners’ 2026 commitments — at least one refiner was reportedly asked to make up this year’s shortfall by committing to more crude in 2027.

Refiners are wary of bigger commitments amid shipping uncertainty. They are reluctant to accept larger volumes amid uncertainty over shipping, pricing, and future demand, according to the report. Adnoc has let some refiners count spot purchases toward their 2026 commitments, but hasn’t decided whether that will carry into 2027. Talks usually wrap up by the end of October, before buyers book January cargoes in November.

REMEMBER- Aramco has already been selling outside its usual channels: It sold about 20 mn barrels to Asian refiners in one week in September, to be transferred between tankers at sea in the Gulf of Oman, just outside Hormuz. It is also discussing 2027 terms that would load cargoes outside the strait and have Aramco ship them to Asian buyers itself.

Float on

Asyad Group is selling up to 6.25% of its MSX-listed subsidiary Asyad Shipping in a two-tranche follow-on offering, according to a disclosure (pdf) from the company. The secondary offering is split into a 5% institutional tranche and a retail tranche of up to 1.25%. Oman Investment Bank and Sohar International are acting as joint global coordinators and issue managers.

Pricing will be set once the institutional order book closes on 22 October, and will be announced with allocations on 26 October based on institutional demand. Retail investors will then buy at that same price when their tranche opens, but an exact date is yet to be determined.

A sweetener is involved: Asyad Shipping expects to declare a fixed USD 150 mn annual dividend for FY 2026 (c. OMR 58 mn), split 50-50 between September 2026 and March 2027. Guaranteed dividends have been a key incentive leveraged by the Oman Investment Authority to drum up demand for IPOs of their portfolio companies in the last two years, we reported before.

IN CONTEXT- The issuance will put Asyad’s free float above the Muscat Stock Exchange’s 25% minimum, a post-IPO compliance step that Asyad Group was required to wrap within two years of a 20% float on MSX that raised USD 332.8 mn in March 2025. The announcement also comes a day after Asyad Shipping posted a 107% y-o-y jump in 9M net income to OMR 67.7 mn, driven by a surge in crude and liner rates due to Hormuz disruption.

Diesel diplomacy

The UAE, Saudi Arabia, and Bahrain have pledged diesel to France. The UAE and Bahrain will each supply 100k tons — roughly 746k barrels — a month for an unspecified period, while Saudi Arabia has pledged 95k tons monthly for October and November, with the possibility of extension, Bloomberg reports, citing the French presidency. TotalEnergies will sign a supply agreement “dedicated to France” with national oil companies, CEO Patrick Pouyanne said, adding that the arrangement would ensure the country has enough diesel this winter.

IN CONTEXT- European diesel prices have more than doubled this year. It’s trading at almost USD 200 a barrel, up from around USD 80 at the start of the year, amid the Middle East conflict and Ukrainian attacks on Russian refineries. European refiners were already running near maximum capacity in late September, while Gulf diesel and gasoil exports averaged roughly a quarter of pre-war levels in August.

Market watch

Oil prices rose this morning on Middle East supply concerns, as traders weighed Red Sea shipping risks and threats to Saudi oil infrastructure, Reuters reports. Brent crude futures rose USD 0.85 to USD 109.64 / bbl by 00:22 GMT, after touching a five-month high of USD 111.99 yesterday. West Texas Intermediate (WTI) rose USD 0.76 to USD 98.58 / bbl.

The Baltic Index extends its rebound: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — rose 1.9% to 2,593 points on Tuesday. The capesize index climbed 4.7% to 3,522 points, while the panamax fell 1.7% to 2,247 points. The smaller supramax held flat at 1,868 points.

***

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2

The Big Story Today

Fuel costs are making Gulf airlines rethink how long to keep older jets flying

The fuel shock is starting to eat into the extra life airlines squeezed out of older aircraft. In recent years, delivery delays at Airbus and Boeing made almost any usable jet worth flying, even one that burned far more fuel than its replacement. Fuel is now set to account for 31.4% of airline operating costs this year, up from 25.4% in 2025, according to IATA, and that trade-off is getting harder to justify.

DATA POINT- Global jet fuel averaged USD 192.44 / bbl last week, according to IATA’s fuel monitor. IATA expects prices to average USD 152 / bbl over the full year, up almost 70% from USD 90 in 2025.

Fuel has made aircraft scarcity more expensive. Keeping an inefficient jet flying made sense when the alternative was no jet at all, but higher fuel prices raise the penalty every time it takes off, Richard Maslen, head of analysis at CAPA – Center for Aviation, tells EnterpriseAM. The question is shifting from whether a replacement can be found to whether the existing aircraft is still affordable to run, he adds.

New jets are still slow to arrive

Replacements aren’t coming any faster. Airbus delivered 72 aircraft in September but still needs a record 4Q to hit its full-year target of roughly 870 aircraft, after engine shortages and other industrial problems weighed on production. A separate quality issue with the A321neo has pushed at least 20 deliveries into 4Q. Boeing’s 777-9 is about seven years behind schedule, and Emirates now expects its first one in 2Q 2027.

Gulf carriers are reaching different answers

Qatar Airways is retiring its older widebodies. The carrier retired its remaining passenger A330s last month, as higher fuel costs sped up plans to phase them out, Reuters reported. The A330s made up around 7% of its passenger fleet as of March, and the airline expects 138 new aircraft over the next five years. The timing helped: regional disruption had already cut its capacity by 10%, which left less flying to cover in the near term.

Emirates is spending to keep its older jets in the air. With its 777-9s years late, the carrier is putting USD 5 bn into a retrofit program, covering 219 A380s and 777s, and had completed 100 by July.

Those jets can still pay their way. On busy routes, a full A380 spreads its higher fuel bill across more passengers, so its cost per seat can still compete, Wouter Dewulf, professor of air transport management and economics at the University of Antwerp, tells EnterpriseAM. The A380s and 777s are also deeply embedded in Emirates’ network, and the money already spent on retrofits gives the airline more reason to get several more years out of them, he adds.

Saudia is renewing its fleet as it grows. The Saudi flag carrier took its first A321XLR in May, the first of 15 on order, and plans to receive 12 new Airbus aircraft this year. The A321XLR burns about 30% less fuel per seat than previous-generation aircraft, according to Airbus, which gives Saudia a more efficient option on some longer routes that would traditionally need a larger widebody.

Fuel alone doesn’t explain the different choices. Each decision depends on a carrier’s aircraft-specific financial and maintenance data, Sindy Foster, principal managing partner at Avaero Capital Partners, tells EnterpriseAM. Qatar could withdraw its A330s because other aircraft can cover the flying, while Emirates can keep large older jets busy on dense routes, she says.

Airlines have more options than the scrapyard

Retirement doesn’t have to come first. Older aircraft can move to seasonal flying, peak periods, backup duty, or routes that can carry their higher costs, and airlines can cut frequencies before a jet leaves the fleet, Foster argues. Owners can also break an aircraft up and sell its engines and parts when those are worth more than the jet could earn by flying, she adds.

Age on its own says little about whether a jet pays its way. An owned 777-300ER with freshly overhauled engines can have very different economics from the same model on an expensive lease with a major engine overhaul coming up, Dewulf says. Ownership or lease costs, remaining maintenance life, how often the jet flies, fuel hedging, seating layout, premium revenue, and route economics can all change the answer, he adds.

BOTTOM LINE- “The case for renewal is getting stronger,” Foster says, but every aircraft still needs a full comparison of fuel, maintenance, financing, revenue, delivery timing, and its eventual resale or parts value. “Fuel prices sharpen those decisions; they do not produce one answer for every aircraft.”

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3

STORAGE + WAREHOUSES

Egypt is preparing four more strategic warehouses for private-sector PPPs as its first three near full operation

Egypt is lining up four more strategic warehouses for private investors. The government is preparing a second phase of four warehouses to offer under public-private partnerships, a senior government official tells EnterpriseAM. Meanwhile, the first three, in Fayoum, Suez, and Luxor, are moving toward full operation. The state wants the extra space to stock wheat and other staples for longer and to cushion the import bill when global prices jump. It would also let the market absorb more local produce at harvest, the official says.

The first three are close, but behind schedule. Fayoum finished construction in April 2026 and is in trial operations, according to the official. Suez and Luxor are 85% complete, according to the Internal Trade Development Authority (ITDA), which had expected them to be done in September and October. The plan is to finish testing and fit-out before year-end, then move all three to full commercial operation, the official says. When the Supply Ministry signed the first contracts in 2022, it expected construction to take 20-30 months.

Private builders will run the warehouses for 35 years

Each site was built and will be operated by a major Egyptian contractor. Most of the space is for dry goods (95%), with 4.5% chilled and 0.5% frozen. The sites range from about 9.1 feddans in Fayoum to 13.3 feddans in Suez. Each warehouse holds 75k pallets, 225k across the three, and serves a cluster of governorates, according to ITDA:

  • Fayoum (Orascom Construction): Fayoum, Beni Suef, and Minya.
  • Suez (Samcrete): Port Said, Suez, Ismailia, Sharqia, North Sinai, and South Sinai.
  • Luxor (Hassan Allam): Luxor, Aswan, and the Red Sea.

The model has shifted toward long-term private operation. In 2022, then-ITDA chairman Ibrahim Ashmawy told us the private partners would build, operate, manage, and maintain the warehouses, “which the government will simply buy.” ITDA now lists a 35-year operating term for each project, and it isn’t clear whether a state buyout is still in the contracts. The approach fits Egypt’s State Ownership Policy, which opens more of the economy to private investors while keeping the state able to step into strategic food markets, the official says.

The first batch cost more than double the original budget

Each warehouse now costs more than double the EGP 1 bn cap set when the first contracts were signed in 2022. The three cost a combined EGP 6.64 bn (c. USD 124 mn), according to ITDA: EGP 2.24 bn for Fayoum, EGP 2.3 bn for Luxor, and EGP 2.1 bn for Suez. Fayoum is up about 70% from the EGP 1.3 bn on its 2023 license, and Luxor is up about 50% from EGP 1.5 bn in 2024, by our math. Suez, licensed at EGP 1.98 bn in January 2025, has barely changed.

REMEMBER- The plan dates back to 2022: The ministry planned seven strategic warehouses nationwide and said the first batch would stretch reserves of basic goods to nine months from six. National storage capacity then stood at 5.4 mn tons across 44 silos and other units. The original contracts also covered a Sharqia warehouse, which isn’t part of the current phase. Sharqia is now served by Suez.

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4

Also on Our Radar

Syria gets its first Aramco fuel cargo, Jazeera takes its first A320neo

Credit where due

Syria has received its first fuel cargo from Saudi Aramco, paid for with its first letter of credit in 14 years. The tanker Starling began unloading about 63.8k metric tons of diesel at the Baniyas oil terminal on Monday, Syrian Petroleum Company (SPC) head of mooring and berthing Jamil Wahoud told state news agency Sana. The trial shipment is intended to help cover Syria’s domestic fuel needs.

Syria now has a formal banking channel for fuel imports. Syria’s central bank opened the letter of credit earlier this month with an unnamed major US bank, and SPC identified Aramco Trading as the supplier. The arrangement opens the way to wider cooperation, Wahoud said. Sana’s reports don’t give the agreement’s value, total volumes, or delivery schedule.

REMEMBER- Saudi oil has reached Syria before, as aid. Riyadh completed a 1.65 mn-barrel crude oil grant last November, with the final 1 mn barrels delivered to Baniyas aboard the Reliable Warrior.

Neo arrival

Jazeera Airways takes the first jet from its 26-aircraft order. The Kuwaiti budget carrier has taken delivery of its first Airbus A320neo, which it fully owns. The order is part of a plan to reach 50 aircraft and 100 destinations by 2030, according to a post on LinkedIn.

REMEMBER- The order comes with a bigger home base: The company ordered 18 A320neos and eight A321neos for delivery between 2026 and 2030. It also plans to expand Terminal 5 at Kuwait International Airport, which it operates, from 5 mn to 7.5 mn passengers a year. Kuwait shut its airspace on 28 February, and Jazeera Airways didn’t fly from Terminal 5 until 26 April, according to its website.

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5

Logistics in the News

The regional war is accelerating an energy export boom across the Americas

The regional war is pushing more of the world’s energy trade toward the Americas, as buyers look for alternatives to Gulf shipments. Attacks on oil infrastructure and tankers in the Strait of Hormuz have cost global markets more than 2 bn barrels of crude, the Financial Times reports. Seven months into the war, customers are signing supply contracts and investing in North and South America to secure reliable supply.

Some trade flows have already shifted. Saudi crude deliveries to the US fell to zero in July, while US imports of Venezuelan crude rose to 18.2 mn barrels that month, up from a monthly average of 15.2 mn barrels in 2Q. US exports of crude and products such as diesel to Europe, Asia, and Oceania are up 15%, according to the FT.

Output across the Americas is rising fast. Countries from Canada to Brazil have set production records this year. Total North and South American output is on course to rise 10% in the two years to December 2026, according to Rystad Energy figures cited by the FT. Venezuela’s output is up 10% this year to about 1.2 mn bbl / d. Wood Mackenzie expects US shale output to reach about 11.8 mn bbl / d by December 2027, about 1 mn bbl / d higher than before the war.

The extra supply is weakening Gulf pricing power. The Americas can’t fully replace low-cost Middle East supply, but they are moderating global prices and will limit Opec’s pricing power, analysts told the FT. “The rise in production in the western hemisphere has taken the medium-term pricing discretion away from the Gulf Cooperation Council, particularly the Saudis,” said Schreiner Parker of Rystad Energy.

If you can’t beat them

Gulf producers are hedging by investing across the Atlantic. “Even countries in the Gulf will seek diversification by investing in the Americas,” Daniel Yergin, vice-chairman of S&P Global, told the FT.

Adnoc’s XRG is building positions across the region. It holds equity in all five trains of the Rio Grande LNG project in Texas and Argentina’s Vaca Muerta basin. It also took an equal stake with BP and Qatar’s UCC in Venezuela’s offshore Loran gas license, which is still subject to definitive terms and regulatory approval.

QatarEnergy is buying American gas to keep its customers supplied. The company has purchased 33 US LNG cargoes worth around USD 1 bn since the Hormuz disruption, Reuters reported. It is also negotiating multi-year agreements for another 2-3 mtpa through 2031. Its Golden Pass LNG terminal in Texas, a JV with ExxonMobil, shipped its first cargo in April. Only the first of its three trains is running so far, out of a planned 18 mtpa.

Aramco is locking in American LNG. It signed a 20-year agreement for 1.2 mtpa from Train 4 of NextDecade’s Rio Grande project, subject to a final investment decision. It has also signed a 1 mtpa agreement with Commonwealth LNG, with an option to double it. Separately, Aramco is raising its stake in MidOcean Energy to 49%, giving it an indirect 17.2% of Peru LNG.

Is the energy map redrawing itself?

Asia is the market with the most at stake. China and India are the largest takers of liquids moving through Hormuz. Japan sourced 94% of its crude imports from the Middle East in 2025, and Middle Eastern barrels made up 70% of South Korea’s imports in January-February.

Crude grades and freight costs favor the Gulf. Brazil’s crude is mostly lighter than the medium-sour Gulf grades that many refiners are built for, and Guyana’s output is mostly light sweet crude. Moving a supertanker of US crude to Asia costs roughly USD 52 mn, or about USD 26 / bbl, as of late September.

Gulf producers are also storing crude closer to Asian buyers. Aramco holds 5.3 mn barrels in South Korea, where Seoul has emergency purchase rights. Saudi Arabia and the UAE have asked Tokyo to increase their current 8 mn bbl stockpiles in Japan tenfold.

REMEMBER- Gulf crude has recovered faster than other exports: Middle Eastern crude exports had returned to roughly pre-war levels by late September, while diesel and gasoline shipments remained at 58% of their earlier volumes. Saudi Arabia’s crude exports averaged 8.1 mn bbl / d in the first half of October, up from 7.2 mn bbl / d before the war, as its East-West pipeline recovered and tankers resumed through Bab Al Mandab.

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Calendar

21-22 October (Wednesday-Thursday): Global Ports Forum, Singapore.

26-29 October (Monday-Thursday): Air Cargo Forum, Miami, US.

27-29 October (Tuesday-Thursday): Routes World, Riyadh, Saudi Arabia.

NOVEMBER

2-5 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

10-11 November (Tuesday-Wednesday): TOC Asia, Singapore.

10-12 November (Tuesday-Thursday): Intermodal Europe, Rotterdam, Netherlands.

11-13 November (Wednesday-Friday): Logitrans, Istanbul, Turkey.

18-19 November (Wednesday-Thursday): Breakbulk Asia, Singapore.

FEBRUARY 2027

10-12 February (Wednesday-Friday): Routes Americas, San Juan, Puerto Rico.

MARCH 2027

16-18 March (Tuesday-Thursday): CMA Shipping, Houston, US.

16-18 March (Tuesday-Thursday): Routes Asia, New Delhi, India.

APRIL 2027

20-22 April (Tuesday-Thursday): Routes Europe, Antalya, Turkey.

26-29 April (Monday-Thursday): Transport Logistic and air cargo Europe, Munich, Germany.

26-29 April (Monday-Thursday): Saudi Smart Logistics, Riyadh, Saudi Arabia.

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