We have more details on the UAE-Oman Hafeet Railway link

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TODAY: More details on UAE-Oman Hafeet Railway link + A deep dive in the Strait of Hormuz

Good morning, folks. It’s a relatively quiet day on the news front, but we have some interesting features for you this morning with a deep dive into the implications of ship seizures in the Strait of Hormuz and a look at Morocco’s aviation manufacturing ambitions.

WATCH THIS SPACE-

Investcorp launches USD 1 bn fund for GCC, China investments: Mubadala-backed Bahraini asset manager Investcorp launched a new USD 1 bn investment fund, Investcorp Golden Horizon, geared towards investing in high-growth companies in consumer, healthcare, logistics, and business services across Saudi Arabia, the wider GCC region, and China, according to a statement. China’s sovereign wealth fund the China Investment Corporation, alongside private investors from the GCC, will anchor the fund.

Egypt’s cabinet has greenlit the establishment of a private freezone in Ras el Hekma to be set up by the Ras El Hekma Development Project Company, according to a statement. The company is being granted a golden license to develop an investment zone and private freezones, the statement said.

REMEMBER- Egypt’s Madbouly government had inked a USD 35 bn agreement with ADQ, giving the Abu Dhabi wealth fund and longtime investor in Egypt the development rights to Ras El Hekma on the North Coast.

Turkey is looking to boost annual trade with Iraq to USD 30 to 40 bn, up from USD 20 bn today, via collaborations on Iraq’s Development Road project, Anadolu Agency reports. The pair, together with the UAE and Qatar, inked a preliminary agreement to cooperate on the project earlier this week. The USD 17 bn logistics corridor initiative looks to establish road and rail networks connecting Grand Faw Port in southern Iraq to the country’s northern border with Turkey.

DISRUPTION WATCH-

Russian LNG traders continue to ship cargoes around the Cape of Good Hope since January to avoid Houthi-led attacks in the Red Sea, Reuters reports. State-controlled gas giant Gazprom has shipped its first shipment from the Portovaya plant on the Baltic Sea via the route, in a turnaround from last year, which saw two of three Asia-bound LNG shipments from Portovaya transit Suez, while another went through the arctic Northern Sea Route, the newswire said.

Looks like Houthi assurances are no longer enough: The Iranian-backed group had earlier said that it was granting safe passage to vessels from Russia, China, and “all other countries” besides the US, UK, and Israel, Houthi senior political adviser and spokesman Mohammed Al-Bukhaiti had told Russian media in January.

ICYMI- Russia is doubling down on new logistics corridors linking it with markets in Asia, in a bid to sidestep sanctions and skirt disruptions affecting Middle East trade lanes. Climate change has made the Northern Sea Route (NSR), an Arctic shipping lane connecting Russia with China, more feasible.

MARKET WATCH-

#1- Oil prices eased amid indicators of a slowing US economy and sustained concerns regarding regional geopolitical conflict, Reuters reports. Brent crude futures edged up to USD 88.11 a barrel this morning after falling 0.5% in the previous session, while US West Texas Intermediate (WTI) inched up to USD 82.88 a barrel following a 0.6% drop yesterday. A further cooling in tension between regional archrivals Iran and Israel could see oil shed another USD 5 to 10 a barrel in coming months, the newswire added, citing a note by Goldman Sachs analysts.

#2- Baltic index extended its decline on further capesize falls: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was down 4.1% to 1,804 points on Tuesday, marking its lowest since 16 April, as weaker rates across capesize vessels dragged down the index, Reuters reported yesterday. The larger capesize segment dropped 9% to 2,458, hitting its lowest since 2 April, while panamax dipped 0.7% at 1,914 points. Meanwhile, the smaller supramax segment gained 1.4% to 1,430 points, the newswire said.

OUR NEXT CONFERENCE IN CAIRO-

Foreign investors are falling in love with Egypt again… Foreign investors we speak with (debt, equity, and strategic alike) have growing appetite for Egypt. They’re buying into local debt, eyeing promising shares, and committing bns of USD to both new ventures here and the growth of their existing businesses. They like the Egypt story that’s taking shape after the float of the EGP, and its competitive advantages are clear to many of them: It’s a massive consumer opportunity and a regional export hub of tomorrow.

The Enterprise Optimism Forum 2024 will do exactly what it says on the tin: Spark conversations about a future that sees Saudi Arabia, Egypt, and the the UAE at the heart of a more vital Middle East economy — and provide an early, actionable roadmap for those who are “long Egypt.”

We’ll be talking with you about the agenda over the coming couple of weeks. It features speakers from Egypt and abroad who are future-proofing their businesses and angling to capture tomorrow’s opportunities — and who aren’t afraid to answer some tough questions.

*** Interested in attending? Tap or click here to let us know. Seating is limited.

CIRCLE YOUR CALENDAR-

Saudi Arabia will host a special World Economic Forum event from Sunday, 28 April through to Monday, 29 April in Riyadh. The event will focus on global collaboration and energy.

Qatar will host the Autonomous E-mobility Forum from Tuesday, 30 April to Thursday, 2 May in Doha. The event will gather industry experts, senior officials, policy and technology experts, as well as government, academic, and media representatives, providing a platform for stakeholders to exchange know-how and recommendations for the implementation of autonomous e-mobility in the real-world.

Saudi Arabia will host the Saudi Smart Logistics exhibition and summit from Monday, 6 May to Thursday, 9 May in Riyadh. The trade fair brings together local and international suppliers, public officials, professionals, and logistics players, and provides a platform for networking, exchanging know-how, and showcasing new technologies, products, and services.

The UAE will host the Airport Show from Tuesday, 14 May through to Thursday, 16 May in Dubai. The 23rd Airport Show will see representation from airport suppliers, airport service providers, aviation executives, and regional decision makers. The event will highlight current innovations and new technologies, while emphasizing this year’s "Sustainability and Innovation," theme.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

More details on the UAE-Oman Hafeet Railway link

The new UAE-Oman railway will boost freight between the two countries by offering the transport of 15k tons of general goods and some 270 standard containers, Hafeet Rail Deputy CEO Mohammed bin Zahran Al Mahruqi told Wam. The train’s cargo capacity is equivalent to 300 trucks, slashing up to 80% of the emissions from truck journeys needed to move the same amount of cargo, Al Mahruqi added. The link — also known as the Hafeet Railway — is 303 km long and connects Oman’s Sohar Port to Abu Dhabi.

More details: The freight train will take about 120 minutes to journey from Sohar to Abu Dhabi, Al Mahruqi said. Siemens Mobility and Egypt’s Hassan Allam Construction will build, design and integrate signaling, telecom, and power supply systems for the railway link, according to a press release (pdf).

ICYMI- Oman and the UAE took major steps to realize a joint railway initiative that has been in the works since 2022 earlier this week. Etihad Rail had inked an agreement with Omani national railway developer, Oman Rail, in 2022 to set up the Oman-Etihad Rail Company, a USD 3 bn (c. AED 11 bn) 50-50 JV, for the design, development, and operation of Hafeet Railway. The transport link between the UAE and Oman, first announced in September, is aimed at bolstering trade between the two countries and the region. The rail line will serve both passenger and freight trains.

Disruptions at the Strait of Hormuz could further impact global trade and oil markets

The Strait of Hormuz could be the next disruption flashpoint: Tit-for-tat drone and missile exchanges by Iran and Israel, as well as the recent seizure of the MSC Aries by Iranian forces have boosted risks for disruptions at the Strait of Hormuz, a key trade choke point for a substantial share of the world's oil trade. Upheaval at the strait could severely impact the global economy, triggering delays and higher inflation, with supply chains already under pressure due to persisting disruptions at the Red Sea and Panama Canal.

Tensions have been bubbling to the surface: The latest attacks mark part of a broader pattern of conflict, with both Iran and Israel frequently engaging in covert attacks against each other. Israel is concerned about Iran developing nuclear weapons and has attempted to disrupt the country’s nuclear program via targeted attacks while Iran has made use of its proxies to retaliate.

Recent hijackings are fanning flames: Prior to the MSC Aries seizure, Iran and the US have also tangled near the strait with Iran hijacking a tanker in January, a year after the US seized the same tanker — dubbed Suez Rajan at the time — in a bid to enforce sanctions. The outbreak of the Gaza War late last year further inflamed tensions in the region, with Iran calling on Muslim countries to impose an oil embargo on Israel a few weeks into the conflict.

The Strait of Hormuz is a key passage: Bordered by Iran to the north and the UAE and Oman to the south, the strait handles some 30% of the global oil trade, Bloomberg reported. KSA, Iraq, Kuwait, the UAE, and Iran, rely heavily on the waterway for their energy exports, moving 15.5 mn barrels per day (bpd) of crude and condensates through it in 1Q 2024, the outlet said. Up to 40 tankers hauling crude potentially transit the strait on a daily basis, according to BIMCO figures in 2019. The strait is also an essential to the global LNG market, with over one-fifth of the world's supply, primarily from Qatar, passing through in 1Q 2024.

A history of threats: Iran has seized tankers and posed the threat of closing the strait prior to thelatest flare up in tensions with Israel. Iran threatened to close the artery in protest to Western sanctions on its alleged Nuclear program in 2011, with Iranian officials warning that “not a drop of oil will pass through the Strait of Hormuz.” The Iran-Iraq war in the 1980s saw both sides of the conflict routinely attack tankers in an effort to curb rival’s exports, with the so-called Tanker War seeing a spike in oil prices and tanker ins., Bloomberg said.

Who stands to lose most? Iraq, Qatar, and Kuwait move 100% of their energy exports via the strait, with no alternatives available. In 2023, Qatar, the world's third-largest LNG exporter, transported some 108 billion cubic meters (bcm) of LNG through this vital chokepoint, accounting for approximately 20% of the global LNG trade.

The UAE has an alternative route: The UAE opened the 370 km Abu Dhabi Crude Oil Pipeline in 2012 to bypass the strait and provide direct access to the Indian Ocean. The pipeline stretches from the Habshan oil fields in Abu Dhabi to onshore storage and offshore loading facilities at the Emirates’ Fujairah oil and bunkering hub.

KSA also has a backdoor: Saudi Arabia, the largest oil exporter through the Strait of Hormuz, will face pressure moving its exports if the strait is disrupted. KSA could use a pipeline to the Red Sea to reshuffle some of its exports to avoid the strait, ExxonMobil’s Global Freight Analyst Matias Togni (LinkedIn) told Enterprise Logistics. Such a move would still be insufficient to stabilize global oil supply and does not help exporters like Iraq which remain highly dependent on the strait, Mattias told us.

Where do we go from here? It is still too early to say if Iran’s seizure of the MSC Aries was a one-off, or if there will be further disruptions at the strait, CEO of tech firm Vizion Inc Kyle Henderson told Bloomberg. However, a blockade of the strait could do more harm than good for Iran, which has used the strait to export “record quantities” of crude to China, earning it much needed revenue, Togni added.

GWC bottomline dips to QAR 50.88 mn in 1Q 2024

Qatari logistics firm Gulf Warehousing Company (GWC) posted a net income of QAR 50.88 mn (USD 14 mn) in 1Q 2024,down 17.25% y-o-y, according to a financial statement (pdf). The warehousing and distribution company’s topline also fell 8.96% during the same period to QAR 375.7 mn.

The drop in performance was driven by a fall in income from the outfit’s core operations, with net gains from GWC’s logistics operations, which include storage, handling, packaging, and transport, dropping 32% y-o-y to QAR 35.22 mn. Meanwhile, GWC’s freight forwarding segment saw a 65% y-o-y boost in net gains to QAR 15.17 mn.

Looking ahead: “GWC is actively implementing a strategic plan to drive growth in line with the Third National Development Strategy (NDS3) 2024-2030 which aims to reinforce Qatar’s position as a global logistics hub and position its logistics cluster as a specialized e-commerce distribution hub, focusing on re-exporting high-value items to reach up to QAR 52bn in re-exports by 2030,” GWC Chairman Shaikh Mohammed Al Thani said in the associated statement.

Recent milestones: GWC subsidiary Flag Logistics said it will establish a 50k sqm logistics hub, dubbed Flag Oman, at Oman’s Khazaen Economic City in January providing specialized areas for various logistics services including dry, ambient, chilled and frozen warehousing, bulk storage, records management and marshaling areas. GWC also kicked off the second phase of developments at its flagship Al Wukair Logistics Park in Qatar in September 2023, with expansions seeing the addition of upwards of 500 retail, warehousing, and light industry units.

UAE + Ecuador to kick off CEPA talks, Tajikistan eyes investments in Iran’s Chabahar Port

UAE + Ecuador eye CEPA agreement: The UAE’s Foreign Trade Minister Thani bin Ahmed Al Zeyoudi and his Ecuadorian counterpart Sonsoles Garcia inked a joint statement announcing plans to kick off negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between both countries, Wam reports.

REMEMBER- The UAE signed an economic and trade agreement with Colombia last week, one day after inking another with Costa Rica, the latest in a series of agreements aimed at boosting the UAE’s non-oil foreign trade.

Tajikistan is eyeing logistics investments at Iran’s Chabahar Port, Tasnim reports. The landlocked country’s Transport Minister Shayesta Moradzadeh met with Iran’s Deputy Minister of Roads and Urban Development Ali Akbar Safaei, highlighting her country’s keenness to invest at the port. Tajik investors will be able to leverage the port for transit trade via a logistics compound at the facility, Safaei said.

Moroccan officials want to make the country the world’s next aviation manufacturing hub

Morocco is looking to become an aviation manufacturing hub by attracting investment to speed up aircraft production to meet global demand, AP reports. The country’s aerospace industry — which brings in USD 2 bn annually — plans to grow by subsidizing plane manufacturing, in addition to subsidies for train and vehicle manufacturing.

The demand is there: Boeing and Airbus have increasingly been outsourcing design, production and maintenance to countries from Mexico to Thailand, while the manufacturers that build components for their aircraft do the same, the news outlet reports.

Morocco’s in a good position: “Most of the big suppliers in Europe are struggling to get people to work in this industry. We don’t have that issue,” Morocco’s national carrier Royal Air Maroc’s CEO Abdelhamid Abbou said. French aviation manufacturer Safran Aircraft Engines sends Boeing 737s and Airbus 320s engines to a repair plant outside of Casablanca every six to eight years, and accounts for one of 130 companies having aviation components produced in the kingdom.

Dnata appoints new Airport Operations Senior VP

Dubai-based air services provider Dnata has appointed Clive Sauvé-Hopkins (LinkedIn) as Airport Operations Divisional Senior Vice President, according to a statement. Hopkins will oversee dnata’s ground handling and cargo operations at 97 airports in 16 countries. Hopkins has held several senior leadership positions with Swissport, Servisair, Aviapartner, Qatar Airways, and the Abu Dhabi Developmental Holding Company, according to the press release.

Qatar’s Hamad International Airport is the "World's Best Airport”

Qatar’s Hamad International Airport (DOH) has been named World's Best Airport at the 2024 Skytrax World Airport Awards, according to a press release. The airport also bagged awards for World’s Best Airport Shopping for the second consecutive time and Best Airport in the Middle East for the tenth year running. The airport awards are based on a series of assessments carried out by air travelers.

MORE HANDCLAPS AND BACK SLAPS:

Aramex team bags award: The Westford Awards has recognized UAE-based logistics company Aramex with the award for Supply Chain and Logistics at the Business Excellence Awards. (Statement)
Aramex Oman also gets an award: Aramex Oman has won the SLB Oman Sustainability Award for its commitment to environmental sustainability. (Statement)

Saudi’s Al Ahsa International Airport expands + Egypt boosts maritime fleet

AVIATION-

Saudi’s Al Ahsa International Airport has been expanded to accommodate one mn passengers annually, up from a current 400k, SPA reports. The expansion project saw the addition of two international halls and ten departure and arrival dates for domestic and international flights.

DATA CENTERS-

German cybersecurity firm Legacy Technologies plans to break ground on a regional data center in Riyadh in early 2025 to provide sustainable solutions for vital industries in the region, its CEO Sem Köksal told Asharq Alawsat. The project, which comes under a partnership with local tech company Saudi Excellence, will provide energy solutions, AI solutions and others across various industries. It will be powered by renewable energy, according to Köksal.

SHIPPING + MARITIME-

Egypt getting new dry bulk ships: Egypt’s National Shipping Company has inked a contract with China-based Hantung Arsenal Company for two new-build dry-dock ships, according to a statement. The two 82k-ton ships are expected for delivery in 2026. Egypt is looking to expand its maritime fleet to 31 ships by 2030, the statement said.

OTHER STORIES WORTH KNOWING THIS MORNING-

China Eastern Airlines flies to KSA: The Saudi Aviation Authority has approved the launch of regular flights operated by China Eastern Airlines between Riyadh and Shanghai effective Saturday 27 April. (Statement)
Iran Air expands domestic fleet: Iran Air has added a new Boeing 737 to its domestic fleet, boosting the airline’s seat capacity by 1.2k extra seats. (IRNA)
Ship saved from sinking in Suez Canal: The Suez Canal Authority's maritime rescue units have prevented the cargo ship LABRATOS, which had 12 crew members on board, from sinking. (Statement)

Boeing’s 1Q 2024 earnings were better than anticipated

Boeing reported a narrower-than-expected loss during 1Q 2024, as well as less cashflow burn than analysts anticipated, CNBC reports. The results signal progress by the firm in stabilizing its supply chain amid the 737 Max safety crisis. The company reported an 8% y-o-y drop in revenues to USD 16.6 mn, slightly above analyst’s forecasts, while net loss stood at USD 355 mn during the quarter, down 16.47% y-o-y.

OTHER STORIES WORTH KNOWING THIS MORNING-

DHL adds new e-trucks to its fleet: DHL has introduced a number of Mercedes-Benz eActros 300 trucks to its fleet. (Statement)

Calendar

24 April-1 May (Wednesday-Wednesday): Abu Dhabi Mobility Week, Abu Dhabi, UAE.

25-26 April: Driftx. Abu Dhabi, UAE.

24-26 April (Wednesday-Friday): The Iran-Africa International Summit, Tehran, Iran.

27 April-1 May (Saturday-Wednesday): Iran Expo 2024, Tehran, Iran.

28-29 April (Sunday - Monday): World Economic Forum, Riyadh, Saudi Arabia.

29 April- 2 May(Monday-Thursday): GLA Global Logistics Conference, Dubai, UAE.

30 April- 2 May(Tuesday-Thursday): Autonomous E-mobility Forum, Doha, Qatar.

MAY

2-3 May (Thursday-Friday): Geneva Dry,Geneva, Switzerland.

2-4 May(Thursday-Saturday): The International Conference on Logistics Operations Management, Marrakesh, Morocco.

3-5 May (Friday-Sunday): The Logistics and Supply Chain Management Conference, Tunisia, Tunis.

6-9 May (Monday-Thursday): Saudi Smart Logistics, Riyadh, Saudi Arabia.

7-9 May (Tuesday-Thursday): Annual Investment Meeting (AIM) Congress, Abu Dhabi, UAE.

14-15 May (Tuesday-Wednesday): Seamless Middle East, Dubai, UAE.

14-16 May (Tuesday-Thursday): The Airport Show, Dubai, UAE.

20-22 May (Monday-Wednesday): The Electric Vehicle Innovation Summit, Abu Dhabi, UAE.

21-23 May (Tuesday-Thursday): WAGA 2024, Riyadh, Saudi Arabia.

21-24 May (Tuesday-Friday): Global Supply Chain Forum 2024, Bridgetown, Barbados.

26-28 May (Sunday-Tuesday): ProPak Mena 2024, Cairo, Egypt.

27-30 May (Monday-Saturday): Comex Technology Show, Muscat, Oman.

JUNE

2-4 June (Sunday-Tuesday):IATA Annual General Meeting (AGM) and World Air Transport Summit, Dubai, UAE.

19-21 June (Wednesday-Friday): World Freezones Organization’s Annual International Conference and Exhibition, Bari, Italy.

27 June (Thursday): East Med Maritime Conference, Beirut, Lebanon.

29 June (Saturday): The Investment Conference in cooperation with the European Union, Brussels.

OCTOBER

6-8 October (Sunday-Tuesday): Routes World 2024, Bahrain.

8-10 October (Tuesday-Thursday): The Global Rail Transport Infrastructure Exhibition and Conference(Global Rail), Abu Dhabi.

7-9 October (Monday-Wednesday): AFSIC – Investing in Africa, London, UK.

8-10 October (Tuesday-Thursday): AntwerpXL Expo, Antwerp.

22-24 October (Tuesday-Thursday): Asean Ports and Logistics, Johor, Malaysia.

NOVEMBER

11-14 November (Sunday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi.

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck (HEAT) Show, Dhahran Expo, Damman, Saudi Arabia.

DECEMBER

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai, UAE.

20 December (Wednesday): The Iran-Senegal Joint Economic Cooperation Commission, Dakar, Senegal.

EVENTS WITH NO SET DATE

1Q 2024: Construction of phase 3 of Agility’s logistic park in Abidjan, Côte d'Ivoire to be completed.

1Q 2024: Egypt’s Transport Ministry to launch pre-qualification tender for Cairo-Alex freight railway.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi - Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

The Cross-Border Digital Trade Forum, Dubai.

2025

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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