Good morning, friends. It’s a big day for financing and supply agreements for our regional logistics players, with updates from Hafeet Rail and QatarEnergy. But first, the latest on the aftermath of two super storms coming in quick succession on the southern US coastline…

THE BIG LOGISTICS STORY ABROAD- Hurricane Milton is expected to significantly disrupt southern US energy infrastructure. The hurricane made landfall on the coast of Florida as a dangerous Category 3 storm before weakening to a Category 2 storm as it came ashore early this morning. Over the course of a mere 12 hours, the hurricane escalated from Category 1 to a Category 5 storm earlier this week as it swept over the Gulf of Mexico and sustained winds of 160 mph as of yesterday morning. High winds, flooding, and storm surges are expected to potentially damage power plants, power transmission lines, and fuel terminals.

Nothing coming in or out: Several ports in Florida have been closed, with inbound and outbound traffic to Tampa Bay shut down, according to a US Energy Information Administration statement.The port, which oversees 43% of Floridia’s petroleum products, is responsible for some 17 mn tons of oil and natural gas related products moving through it annually. Energy giant Chevron has shut down its US Gulf of Mexico oil platform Blind Faith until further notice, halting a production capacity of around 65k bpd. Multiple airports across Florida, including Tampa International Airport (TPA), have suspended all cargo and commercial flight operations as of Tuesday in preparation for the hurricane, The New York Times reports.

The developing story is grabbing a lot of ink in the int’l press: Reuters | AP | Bloomberg | Financial Times | Washington Post | The New York Times | CNN | BBC | The Guardian

WATCH THIS SPACE-

#2- Iraq to adopt prepayment mechanism for importing from Türkmengaz via Iran: Iraq has inked an agreement with Turkmenistan national gas company Türkmengaz to implement a prepayment system for importing gas via Iran, according to a statement. Supplier Loxstone Energy will facilitate the transaction through a swap mechanism under a contract with the Iraqi government, which will be exempt from standard public contract procedures and federal budget regulations for the next three years, Iraqi news outlet Shafaq reports.

#1- Hapag Lloyd and Maersk are adding the East-West Service Network 2025 to their Gemini cooperation to connect cargo across key trade routes, according to a statement. The two firms are also phasing in the Cape of Good Hope Network in February 2025. The network will boast 29 mainline services, 28 shuttles, and around 340 vessels with a total capacity of 3.7 mn TEUs.

REMEMBER- Hapag Lloyd and Maersk have said they will provide alternative networks to their Gemini Cooperation if Red Sea disruptions continue. The two network options would see both shipping giants either returning to the Trans Suez Canal or continuing the alternative route around the Cape of Good Hope.

What is Gemini? The Gemini Cooperation is an alliance by Hapag Lloyd and Maersk that aims to offer a flexible ocean network with schedule reliability above 90% for services under the Gemini umbrella, according to the statement. We first caught wind of this partnership back in January, but the US Federal Maritime Commission (FMC) held up the launch in July pending the divulgence of additional information needed to determine the venture’s competitive impact.

MARKET WATCH-

#1- Oil prices rose in early morning trading on the back of an anticipated spike in fuel demand due to Hurricane Milton and potential supply disruption from the Middle East, Reuters reports. Brent crude futures were up USD 0.63 to USD 77.21 a barrel at 04.23 GMT, while US West Texas Intermediate (WTI) futures gained USD 0.63 to USD 73.87 a barrel. The storm drove up demand for gas in Florida which has helped prop up crude prices. Israeli Defence Minister Yoav Gallant declaring an Israeli strike against Iran would be "lethal, precise and surprising" is also leaving investors wary of escalating tensions between the two countries.

#2- Global oil demand growth will fall below prior expectations next year due to lower economic activity in North America and China, Reuters reports, citing a US Energy Information Administration report. World oil demand is now forecasted to rise 1.2 mn bpd to hit 104.3 mn bpd in 2025, some 300k bpd below prior expectations. Demand is slated to come in at some 103.1 mn bpd this year, around 20k bpd lower than prior forecasts. Declining imports and refinery runs in China, the world’s top buyer of crude, have been driving down forecasts.

IN OTHER OIL NEWS- Kazakhstan continues to flout Opec+ production limits: Oil production at Tengiz, Kazakhstan’s largest oil field, hit a record 699k bpd this month as production at the site continues to ramp up following the conclusion of maintenance in August, Reuters reports, citing sources with knowledge of the matter. The boost in output makes it less likely that Kazakhstan — which was cited by the oil producing cartel along with Iraq and Russia for lack of compliance in a meeting earlier this month — is adhering to Opec+ limits.

And numbers seem to confirm that Kazakhstan cheated in September: Meanwhile, Kazakhstan’s production for the previous month exceeded its 1.468 mn bpd limit by some 170k bpd, the newswire said citing its own tally. The country is set to swing back to compliance this month as some oil fields go offline for maintenance, but excess production is expected to resume once more in November as maintenance efforts wrap up.

Are we seeing the last day of Opec+ voluntary cuts? Continued lack of compliance could push Saudi Arabia and other OPEC+ members to abandon oil cuts altogether, RBC Capital’s Helima Croft had told Reuters earlier this month.

Meanwhile Russian Deputy PM Alexander Novak expressed uncertainty about future market demand, saying it was “too early,” to determine if a plan to wind back some of the cuts and reintroduce 180k bbl / d of production was justified by market conditions, Reuters reported yesterday.

REFRESHER- Opec+ opted to stay the course on its planned production targets at its policy meeting last week, including plans to phase out supply cuts by December. The meeting also saw the Saudi-led cartel say that it was increasing its scrutiny of members that have a patchy compliance record. The group is scheduled to reconvene on Sunday, 1 December to decide whether to hold steady or adjust according to market conditions.

#2- Baltic index continues dipping: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 3.3% to 1,799 points on Wednesday, registering its lowest level since late August. The capesize index dipped about 6.8% to 2,786 points, while the panamax index gained 16 points to 1,457 points. The smaller supramax notched up 6 points to 1,270 points.

PSA-

Maersk applies new PSS on cargo from East Med to Canada: Shipping giant Maersk has issued a new USD 2k peak season surcharge (PSS) on all dry containers traveling from the East Mediterranean to Canada, effective 23 October, according to a statement. The PSS will apply to shipments originating from Egypt, Lebanon, Turkey, Israel, Romania, Bulgaria, and Georgia.

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CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Global Logistics Forum from Saturday, 12 October to Monday, 14 October in Riyadh. The forum will gather key industry players, government officials, and industry experts to discuss optimizing operations and driving growth in the logistics sector. The event will take a specific look at how the sector can adapt with regards to global climate change and incorporate sustainability into their supply-chain operations.

Saudi Arabia will host the Global Airport & Aviation Forum from Wednesday, 16 October to Thursday, 17 October in Jeddah. The forum will bring together aviation leaders and experts to discuss future projects in the aviation industry, including new airport developments, capacity upgrades and expansions, new aircraft orders, and important airport services.

Saudi Arabia will host the Smart Ports & Logistics Transformation Summit on Monday, 21 October and Tuesday, 22 October in Riyadh. The two-day conference aims to discuss strategies, innovation, and technologies in line with Saudi Arabia’s Vision 2030, which aims to position KSA as a logistics hub in the MENA region.

The UAE will host the International Conference on Tourism, Transport, andLogistics on Saturday, 26 October and Sunday, 27 October in Dubai. The event will gather scientists, scholars, and engineers from around the world to discuss new ideas and research development projects in the industry.

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