Good morning, friends. It’s a morning of pressure applied and pressure offered to ease, in equal measure.

Washington is squeezing Iran's airlines through the ground network that keeps them flying. Companies and airports still servicing sanctioned Iranian carriers after today risk US penalties, Treasury Secretary Scott Bessent said. However, the real exposure might sit in fuel, ground handling, and ticketing — everything around the planes, not the planes themselves — and Iraq is already weighing whether to suspend Iranian flights rather than risk it.

That squeeze comes as Saudi Arabia restores a key oil route, though only partially: The East-West Pipeline restarted yesterday after a drone attack knocked it offline last week, though it's running at a reduced rate with three of its 11 pumping stations still damaged.

Meanwhile, Tehran is floating a fast route back to normal: Tehran told Washington, through mediators, that it could reopen the strait within seven days if the US eases military pressure and lifts its port blockade, a senior Iranian official tells Reuters.

Delighted to welcome Hesham Mahran, CEO and managing director of Orange Egypt, as a guest speaker at the 2026 EnterpriseAM Egypt Forum — the AI edition.

Appointed in August 2025, Mahran brings more than 27 years of experience across telecommunications, ICT, and digital transformation. As a long-standing Orange Egypt leader, he previously served as Chief Business Officer, driving the company’s expansion into cloud, cybersecurity, IoT, and enterprise connectivity. Under his leadership, Orange Egypt has become a key partner in Egypt’s digital transformation agenda, including “Ask Mariam,” Egypt’s first AI-powered airport assistant at Cairo International Airport. He has also been closely tied to national infrastructure projects and smart city development, including the New Administrative Capital Data Center.

Join us on 5 October in Cairo. Attendance is by invitation only, and we're close to full capacity.

Request your invitation here.

Plan B

Egypt plans to build its first strategic crude oil reserve of some 16 mn barrels by year-end, a government source told Asharq Business. The reserve would comprise additional supplies of 10 mn barrels from Libya and another 6 mn barrels from Iraq, separate from Egypt's regular monthly supplies, the source said.

BACKGROUND- We reported back in May that the Egyptian government has agreed to purchase 3% of Libya’s monthly oil output at international prices, with Libya agreeing to flexible payment terms covering between 1 mn and 1.2 mn barrels per month.

How the 6 mn barrels earmarked for Egypt's reserve would be moved remains unclear. Iraq's crude exports have been among the region's most disrupted since Hormuz shut down — falling to a fraction of pre-war levels before recovering to roughly a third of pre-war exports in 1H 2026. Baghdad has since clawed back some capacity through Adnoc’s cross-strait shuttling runs, an Iranian exemption for Iraqi oil shipments, and ship-to-ship pickup arrangements near Oman. But export capacity remains well below pre-war levels, even with those workarounds.

The price tag: The crude is contracted at around USD 85 per barrel, putting the total cost at nearly USD 1.36 bn before shipping, storage, and ins. — the source didn't break out pricing by origin, so it's unclear whether that rate applies evenly to both the Libyan and Iraqi barrels. The targeted reserve would equal some 2.3 months of Egypt's reported regular crude supplies of 7 mn barrels a month, by our calculation — a measure of supply cover, not total domestic oil consumption.

Why it matters: Holding crude in reserve would give refineries feedstock to draw on when shipments are delayed, adding a buffer further up the fuel supply chain, alongside stocks of finished petroleum products.

Sharara’s shutdown problem

Libya’s Sharara oil field risks a full shutdown after an armed group closed a pipeline valve feeding crude to the Zawiya refinery, according to a statement. The country’s National Oil Corporation (NOC) warned that a prolonged disruption could halt Sharara’s production and exports entirely and force the 120k bbl / d Zawiya refinery offline — with force majeure a real possibility.

Why this matters: Libya’s import system was already stretched thin. The country spent USD 6.1 bn on imported fuel in the first seven months of 2026 — some 6.1 mn metric tons across 207 cargoes. July alone accounted for roughly USD 1 bn of fuel and petroleum-product imports — with 90k tons of diesel and 120k tons of gasoline deliveries spilling into August because berths were already congested. A prolonged Zawiya outage could push more of that burden onto an import bill that’s already climbing.

IN CONTEXT- Zawiya was already a weak line: Drone attacks repeatedly hit the refinery and surrounding infrastructure in August, damaging gasoline and diesel storage and prompting the NOC to warn that continued strikes could force the complex offline.

What’s next: Libya is trying to build its way out of that dependence, but none of the fixes are immediate. The mothballed 200-220k bbl / d Ras Lanuf refinery is being rehabilitated for a possible 2H 2027 restart, which could replace a meaningful chunk of imported products. Libya and Egypt are also discussing an 800 km Tobruk-Alexandira pipeline that could send Libyan crude to Egyptian refineries and potentially return petroleum products for Libyan consumption.

Market watch

Oil prices slipped this morning as Saudi Arabia restores pipeline flows and US-Iran talks revive diplomacy hopes, Reuters reports. Brent crude futures declined USD 0.07 to USD 99.18 / bbl by 01.19 GMT, while West Texas Intermediate (WTI) decreased USD 0.35 to USD 90.17 / bbl.

The Baltic Index ticks up: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — rose 1% to 3,432 points on Tuesday. The capesize index gained 0.9% to 5,892 points, while the panamax index increased 1.9% to 2,299 points. The smaller supramax index inched up 0.3% to 1,776 points.

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