Good morning, nice people. It’s a busier news day as some key developments emerge from Saudi and Egypt in the warehousing and shipping fuel sectors, along with a basket of trade updates from across the region. Let’s dive right in.

WATCH THIS SPACE-

#1- The Abu Dhabi Exports Office (Adex) — the export arm of Abu Dhabi Fund for Development — has allocated AED 3.5 bn in funding to boost local companies’ exports, Deputy Director General of ADFD Khalifa Al Qubaisi told Wam on the sidelines of Make it in the Emirates, without clarifying the timeline of the disbursement or specific sectors it plans to target.

How does Adex help? The export office usually provides credit facilities to exporters, as well as financing and guarantees for foreign importers to support their imports from the UAE.

#2- Could Egypt become an export hub for palm oil? Malaysia intends to set up a logistics and marketing center for palm oil in the Suez Canal Economic Zone to enhance the country’s exports to Africa, Al Borsa reports, citing comments by Malaysian Plantation and Commodities Minister Johari Abdul Ghani said on the sidelines of the Malaysian Palm Oil Forum. Malaysia currently exports 2.5 mn tons of palm oil to African countries every year, Abdul Ghani added.

What’s next? Abdul Ghani will be paying a visit to the SCZone today to learn about incentives on offer.

#3- A pipeline connecting Morocco with gas fields in Mauritania and Senegal will represent the first phase of a larger Morocco-Nigeria gas pipeline project, Reuters reports, citing statements by Moroccan Energy Minister Leila Benali. The USD 25 bn Economic Community of West African States (ECOWAS) backed project will be implemented in three phases and is slated to have a 30 bn cubic meters yearly capacity, the newswire said. A final investment decision pipeline is expected in 2025.

REMEMBER: Nigeria is looking to construct a 5.6km LNG pipeline connecting to markets in Europe via Morocco. The move came after Nigerian Gas Minister Ekperikpe Ekpo met with Benali in January to fast-track an investment decision on the potential pipeline. Morocco and the UAE also inked an MoU in December that covered the establishment of an investment partnership on the Morocco-Nigeria gas pipeline and other projects.

#4- The EU has approved a law that would set methane emissions limits on all of Europe’s oil and gas imports starting in 2030, Reuters reported. Importers that exceed the limit will receive financial penalties, with the US, Algeria, and Russia predicted to be the most affected by the new regulation. The final approval — which was unanimous with the exception of Hungary — was reached during a meeting in Brussels between the EU’s agricultural ministers. The exact limits will be determined by the European Commission by the end of the decade, when the law comes into effect.

New fossil fuel import and production contracts won’t be spared: The EU also approved a rule that requires new fossil fuel import contracts signed with foreign producers to follow the bloc’s methane emissions reporting rules starting in 2027, including regular monitoring of leaks. “The EU will also require European producers to regularly check their operations for leaks of methane and bans most cases of flaring and venting,” the newswire added.

DISRUPTION WATCH-

Greek-owned bulk carrier Laax was attacked while transiting the Red Sea yesterday, causing the vessel to take on water, Bloomberg reports, citing maritime security firm Ambery. Three missiles targeted the vessel near Yemen’s Hodeidah port, Ambrey said, adding that the Laax issued a distress call stating that its cargo hold had been damaged and that flooding was causing the vessel to list. The Laax continued on its journey following the incident, Athens News Agency said. Yemen’s Iranian-backed Houthis have yet to be positively identified as the perpetrators of the attack, Bloomberg also said.

WORTH READING THIS MORNING- There are no signs that traffic will soon return to the Suez Canal as Dubai and Jeddah open new routes to Saudi Arabia and major players continue to steam around the Horn of Africa rather than transit through Egypt. The FT goes deep into how pirate attacks, instability in the Middle East, and climate change are putting mounting strains on global shipping.

Sudan’s Petrodar oil pipeline could resume operations within the next two weeks after rupturing amid fighting in February, Reuters reports, citing a South Sudan Oil Ministry official. Run by a consortium of China’s CNPC, Sinopec, and Malaysia’s Petronas, the pipeline pumps some 100k barrels per day (bpd) of crude from South Sudan to a terminal on Sudan’s Red Sea coast. Oil accounts for 90% of the country’s FX income, with Sudan also taking a portion of the returns in terms of transit fees. South Sudan is liable to economic collapse unless flows across the pipeline are restored, observers said.

MARKET WATCH-

#1- Oil prices rallied this morning as traders expect OPEC+ to maintain cuts and fuel consumption to rise as summer heats up, Reuters reports. Brent crude futures for July gained 0.2% hitting USD 83.37 a barrel by 03.04 GMT, while US West Texas Intermediate (WTI) futures for July bumped up 0.3% to USD 80.08 a barrel. The anticipation of Opec+ to extend output cuts and make an effort to stabilize prices has fueled optimism in the markets, SS WealthStreet founder Sugandha Sachdeva told the newswire.

A price cut for crude oil to Asia is in the cards: Aramco may slash prices for most crude grade sales to Asian customers in July for the first time in five months, Reuters reports, citing unnamed sources in refining. The sources expect Aramco to cut the official selling price (OSP) for flagship Arab Light Crude by USD 0.30-0.50 a barrel on the back of weakened margins and benchmarks for Asian refiners.

Thailand slashed crude imports from Saudi Arabia in April opting for low sulfur crudes from the US and Southeast Asia instead, refinery and industry sources told S&P Global. The move reportedly comes in a bid to save on refinery and logistics costs and costly Persian Gulf-East Asia tanker ins. fees. Thailand snapped up some 57.2k barrels per day (bpd) from the kingdom in April, down 66.1% y-o-y, while importing 148.6k bpd from the US, up 33.6%, customs data showed.

Curbing costs: “General freight rates have not exactly gone up a lot but it's the expensive ins. fees amid prolonged geopolitical tensions in the Middle East that could negatively impact overall refining margins,” a Thai refiner said. Thai refiners are turning to Southeast Asian suppliers in an effort to curb logistics costs by doubling down on short haul routes.

ON THE DEMAND SIDE- The demand for oil will continue rising until 2034 as the adoption of electric vehicles is forecasted to slow down, Reuters reports, citing data from Goldman Sachs. Demand is expected to peak at 110 mn bpd in 2034, followed by leveled demand until 2040, the newswire said. China, India, and other emerging economies are expected to drive the growth in demand for oil. A longer period of growing demand for oil will benefit Opec+ producers, but will also increase GHG emissions, the newswire also said.

#2- The Drewry Dry Bulk Equity Index gained 25.2% between 1 January and 23 May, outperforming the S&P 500’s 10.4% gain over the same period, Drewry reports. All stock prices factored in the index saw gains in May. Earnings for dry bulk carriers were a mixed bag in 1Q 2024, with Star Bulk and Golden Ocean noting growth in toplines and bottomlines due to high spot rates, while DS Norden saw its topline shed 8.5% y-o-y, Drewry said.

DATA POINTS-

Iran’s trade with the EU surged 8% y-o-y to EUR 1.28 bn in 1Q 2024, Mehr reports citing the EU’s statistics office Eurostat. Exports to Iran from the bloc bumped up 10% y-o-y during the period to EUR 1.06 bn, while the EU’s imports from Iran fell 3% to EUR 216 mn. Iran’s trade with the EU for the full year of 2023 stood at EUR 4.73 bn, Eurostat also said.

Oman’s e-commerce market was valued at USD 2.2 bn in 2023, Muscat Daily reports, citing an announcement at an e-commerce forum. Market volume is split between five main categories, with electronics and media accounting for 32.9% of volumes, food and personal care at 25%, fashion at 22%, furniture and home goods at 13.3%, and recreational games at 6.6%, the outlet said.

CIRCLE YOUR CALENDAR-

The UAE will host the IATA Annual General Meeting and World Air Transport Summit from Sunday, 2 June to Tuesday, 4 June in Dubai. The event will bring together aviation industry players to showcase what can be achieved through supportive government policies and decisions. Airline leaders will make decisions during the event to formalize industry positions and set IATA’s strategic agenda.

Lebanon will host the East Med Maritime Conference on Thursday, 27 June in Beirut. The event will gather industry leaders to discuss the latest developments in shipping, maritime, and offshore industries to discuss industry innovations, alternative fuels, and decarbonizing emissions in the maritime sector and ports.

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