Freighters + airlines show mixed response to the events in Israel + Palestine: UPS flights to Israel are still suspended due to security concerns amid the ongoing Gaza conflict, while DHL Express and FedEx Express are continuing operations to Tel Aviv’s Ben Gurion International Airport, supply-chain outlet FreightWaves reports.

Operations resumed, with caution: FedEx Express, which suspended flights to Israel for just one day, assessed the situation and reinstated inbound and outbound service to the country, with pick-up and delivery services resuming “according to local authority instructions, where it is safe and possible,” according to a service bulletin. Israel’s cargo operator Challenge Air has reportedly maintained services to Israel from its hub at Liege airport in Belgium, according to the outlet.

Some flight disruptions could last until the end of the month: Hong Kong flag carrier Cathay Pacific has also temporarily suspended all Cathay Pacific flights between Hong Kong and Tel Aviv till 29 October, according to a statement. Meanwhile, the US’ Delta Cargo has imposed a temporary all-product import, export, and transit restriction for Tel Aviv till 31 October, according to a statement.

Several airlines have also halted operations until further notice: United Airlines, Turkish AIrlines, Wizz Air, Air Canada, and Air France are among the global airlines that have halted operations to Tel Aviv until further notice. Lufthansa also said earlier this week it was suspending operations indefinitely due to the conflict.

AIRPORTS ALSO AT RISK-

Syria’s Aleppo International Airport resumed services on Saturday, following the halt of operations caused by Israeli air strikes last Thursday, which led to material damage, Syrian news agency SANA cites the Transport Ministry as saying. The Israeli missiles also hit Damascus simultaneously, causing damage to runways and putting both hubs out of service, according to Reuters.

Behind the attack: Sources told Reuters that the strikes — which came a day before Iran’s foreign minister was due to visit Syria — were carried out to disrupt Iranian supply lines of arms to Syria, while a Syrian military source cited by the outlet claimed that the “burst of missiles” hit the airport in a bid to distract the world’s attention from the war in Palestine. Israel has yet to comment on the strikes.

AS ARE PORT OPERATIONS-

A backlog of ships is already growing at Israeli ports while operations continue at most terminals, Reuters cites data and sources as saying. Israel closed the Ashkelon port near Gaza in response to rocket attacks from Hamas, while Ashdod port has imposed restrictions on hazardous materials, meaning slower tranists, the outlet writes. Ashdod port will continue to operate as normal, to supply Israel’s economy “around the clock,” the outlet cites a port statement as saying. MSC added that increased security checkpoints could add another hurdle, Reuters said.

Normal operations, but with some “limitations”: While 13 ships, including cargo, container, and dry bulk vessels are stuck in Ashdod port, three cargo and dry bulk ships carrying cargo bound for Ashdod had stopped in waters nearby, while another three including an oil tanker, and container ship were also halted, Reuters cites data from ship tracking and maritime analytics provider MarineTraffic. Haifa port, which also handles cargo and dry bulk goods, is also continuing to operate, but with operational and manpower limitations, the outlet writes. The shortage in manpower is making it harder to transport inventories, according to Israel’s Economy Minister, and is increasing wait time for ships docking in Israel.

A regional chokehold? Not as of now — but possibly: While the ports of Ashdod and Haifa account for some 0.4% of global container throughput, intensification of conflict beyond Israel’s borders could introduce risks to vital shipping chokepoints in the region, the outlet cites Container xChange as saying. Egypt’s Suez Canal may face disruptions, while the Strait of Hormuz could be affected Container xChange CEO Christian Roeloffs is quoted as saying.

IN GAZA- The smaller Gaza City Port was hit by Israeli air strikes earlier on Saturday, CNN reported.

MARKET REAX- Oil prices surged nearly 6% on Friday as Israel geared up for a ground invasion of Gaza, with Brent posting its highest gain since February, Reuters reports. Brent settled up 5.7% to USD 90.089 per barrel, while US West Texas Intermediate crude gained 5.8% to USD 87.69 a barrel, Reuters reports. Both benchmarks recorded their highest daily percentage gains since April. Iran’s Oil Minister Javad Owji expects oil prices to reach USD 100 per barrel due to the current situation in the Middle East, the outlet writes.

While Israel is not a large producer of crude oil, traders are keeping an eye on the conflict and possibilities of escalation, which could hurt Middle East supply and worsen an expected deficit for the remainder of the year, the outlet writes. The conflict had had little impact on the global oil and gas supply, but investors and market observers are assessing how it could escalate, and what it would implicate for nearby supplier countries, the outlet adds.

The attacks have already put Saudi-Israel normalization talks on hold: Saudi Arabia is putting its US backed plans to normalize ties with Israel on the back burner, two sources familiar with the subject said, according to Reuters. This may have implications for supply as KSA told the White House it was willing to boost its oil production early next year to help secure the agreement. It could also have an impact on a Saudi-Israel “economic corridor” posited earlier by Israeli President Benjamin Netanyahu.

Russia + KSA likely to extend oil cuts to 2024: Saudi Arabia’s and Russia’s voluntary production cuts will likely endure well into 2024, the Telegraph reports, citing comments by Russian President Vladimir Putin. The cuts by the two countries aim to buoy prices, according to the outlet.

THE POTENTIAL ECONOMIC IMPACT-

Regional escalation in the Israel-Hamas war could create a global economic downturn: The ongoing war between Israeli forces and Hamas will take a toll on global growth, says Bloomberg, but to what extent will depend on the involvement of other regional actors. In a long read, the media outlet lays out three potential scenarios for how the conflict will hit global oil prices and growth rates. In all these scenarios, the direction is the same, with more expensive oil, higher inflation, and slower growth – but with different magnitudes.

Conflict in the region can send tremors throughout the world, given the region is a crucial supplier of energy and key shipping passageway, especially as the global economy continues to suffer from the knock-on effects of the Russia-Ukraine war, the outlet writes. This war could consequently rekindle inflation, and send crude prices higher, the outlet writes.

The worst-case scenario: Bloomberg Economics estimates that if the war escalates into a direct confrontation between Israel and Iran, oil prices could spike to USD 150 per barrel, leading global growth rates to slow to 1.7%. This would chop around USD 1 tn off world output and put global inflation at 6.7% in 2024.

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