KSA’s AviLease and Riyadh Air place Airbus orders in Paris

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What we're tracking today

TODAY: Disruption at sea and The Paris Airshow both roll on

Good morning, nice people. We have a brisk issue this morning with the latest disruption watch news as Israel-Iran tensions continue to escalate, and the latest from the orderbooks shaping up at the Paris Airshow. Let’s dive right in.

WATCH THIS SPACE-

#1- At least 900 vessels in the Arabian Gulf and the Strait of Hormuz reported disrupted signals over the weekend increasing the likelihood of collisions, Bloomberg reports, citing its own data and that of Starboard Maritime Intelligence. The international taskforce Joint Maritime Information Center claims it found signs of “extreme jamming” from Iran’s Bandar Abbas port, yet downplayed the likelihood of a blockade in the waterway. Reports of signal jamming — which scramble a ship’s reported location — come as conflict escalates between Iran and Israel.

Dire Straits: The Israel-Iran conflict has potentially put crucial shipping routes — the straits of Hormuz and Bab-el-Mandeb — at risk of disruption. Greece and the UK advised shipping firms to avoid sailing through the Southern Red Sea and the Gulf of Aden as well as log any and all movements through the Hormuz Strait. Iran is also said to be mulling the closing of the Strait of Hormuz, responsible for the passage of around a fifth of the world’s total oil consumption, but analysts have downplayed the likelihood due to the country’s reliance on oil shipments revenues especially to China.

#2- Egypt lends a helping hand despite shortages: Egypt is currently exporting some 100 mn cf/d of natural gas to Jordan to address the kingdom’s severe supply shortage, an Egyptian government source told EnterpriseAM. Exports could reach up to 400 mn cf/d if supply chains are further affected. The country also quadrupled the electrical power capacity via the electricity interconnection line with Jordan to some 400 MW to address the energy crunch, a separate source told us.

IN CONTEXT- Israeli gas suppliers formally invoked force majeure and suspended exports, including those to Jordan and Egypt — which stood at around 800 mn cubic feet per day (mcf/d) last week. This came after Tel Aviv shuttered the offshore field as well as the Karish field as Iranian retaliation to Israel’s strikes of nuclear and energy facilities, as well as assination of top nuclear scientists and military commanders.

#3- State-owned Air Algérie, Tassili Airlines, oil giant Sonatrach, and fuel firm Naftal have established a committee to explore domestic sustainable aviation fuel (SAF) production, Air Algérie CEO Hamza Benhamouda told Asharq Business earlier this week. The plan includes an Air Algérie fleet renewal, employing more fuel-efficient aircraft, and using emissions-reducing aviation tech. Air Algérie is already studying its fleet’s carbon footprint to build a database to aid future decisions across its operations.

In numbers: Algeria’s flag carrier, Air Algérie currently operates over 56 aircraft covering 44 international routes, according to its website. Its cargo arm — Air Algérie Cargo — is based in Houari Boumediene Airport and operates four freighters, according to its website.

The SAF drive is slow going: SAF production is projected to double and hit 2 mn tons in 2025 — only making up 0.7% of airlines’ total fuel consumption. Other regional players such as Emirates are investing over USD 200 mn in SAF, while actively testing SAF-powered flights from Singapore, Amsterdam, and London. Joramco is also investing in DHL’s GoGreen Plus program to integrate SAF practices into its operations.

#4- Microsoft, e& enterprise double down on AI push: Emirates Telecommunications Group’s (e&) e& enterprise is partnering with Microsoft to deploy AI and data-led solutions across the MENAT region, according to a press release. The partnership will focus on sector-specific tools for the public sector, as well as for the banking, financial services, ins., telco, and retail industries.

Who is doing what: Microsoft will provide a full stack of AI and data tools via its Azure platform to support organizations and business in operations like fraud detection, predictive analytics, and data warehousing. e& enterprise will provide its cloud migration, managed services, and hybrid cloud offering.

MARKET WATCH-

#1- Oil prices climbed in early morning trading as the Israel-Iran escalation continues to threaten supply flow from the Middle East, Reuters reports. Brent crude futures rose by USD 0.34 to reach USD 73.57 a barrel, while the US West Texas Intermediate (WTI) climbed USD 0.29 to USD 72.06 a barrel by 03.40 GMT. Both contracts rose over 2% earlier in the trading session.

The escalating conflict is placing MENA oil supplies at serious risk with key energy infrastructure already under attack, Bloomberg reports, citing a note by RBC Capital Markets’ analyst Helima Croft. Oil is now “clearly in the crosshairs” as both sides have struck facilities crucial to global supply.

Potential scenarios include an Israeli strike on Iran’s Kharg Island, which processes 90% of Iranian crude exports, and retaliatory attacks by Iranian proxies on oil facilities in Iraq, Bloomberg adds. The White House is reportedly urging Israel to avoid targeting Kharg Island due to the severe impact it could have on global energy markets. The conflict also caused speculation about disruptions to oil shipments through the Strait of Hormuz, a critical chokepoint for global crude flows.

There's more: The oil-options market saw a surge in bullish activity on Monday, Bloomberg reported. Thousands of August call options betting on crude surpassing USD 80 per barrel traded within hours, with additional high-volume contracts placed on Brent crude reaching USD 100 and USD 101. Brent's timespreads saw some 20k lots exchanged in the first five minutes.

#2- Baltic index rises once again: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was up 0.4% to 1,975 points on Monday, boosted by all vessel segments. The capesize index inched up 0.2% to reach 3,731 points, while the panamax index rose 0.6% to 1,410 points. The supramax index increased three points to settle at 939.

#3- Fitch Ratings revised its 2025 outlook for the global shipping sector from neutral to deteriorating, according to a statement published last week. The credit rating agency attributed this change to weaker expected demand, especially in container shipping and dry bulk activity. The outlook revision came one day prior to Israel’s attack on Iran last Friday, which led to escalations that disrupted shipping routes, the flow of energy, airspace and aviation. That said, the report omits crucial developments that occurred over the past weekend.

The rating agency expects freight rates to resume its “significant” downward trend, down from the highs achieved in 2024, despite short-term forces like firms front-loading demand ahead of proposed tariffs. Container volumes — previously expected to grow by 3% in early 2025 — will also either stay flat or see a slight drop. Meanwhile, global fleet capacity is predicted to surge by roughly 6%, with supply exceeding demand, despite trade tensions.

DATA POINT-

The UAE’s non-oil foreign trade rose 18.6% y-o-y to AED 835 bn in 1Q 2025, according to a Dubai Media Office statement, citing figures from Dubai Ruler Mohammed bin Rashid Al Maktoum. The UAE’s trade performance outpaced the global average of 2-3%, buoyed by record levels of “social, economic, and strategic stability and prosperity.”

Exports drove growth: Non-oil exports surged 40.7% y-o-y and 15.7% q-o-q to AED 177.3 bn during the quarter, marking the first time they’ve accounted for more than 21% of total non-oil trade. Re-exports hit AED 189.1 bn, up 6% y-o-y, while imports rose 17.2% y-o-y to AED 468.6 bn, though they slipped 1.7% from the previous quarter.

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CIRCLE YOUR CALENDAR-

The UAE will host Middle East Rail from Tuesday, 24 June to Thursday, 25 June in Dubai. The conference at Dubai World Trade Center will host over 250 speakers and a multi-brand exhibition for transport solutions.

Mozambique will host Intermodal Africa from Tuesday, 22 July to Thursday, 24 July in Beira. The conference will host 35 speakers, to address challenges in global and regional maritime trade and investment.

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

Airbus grabs the spotlight at Paris Airshow

PIF-owned aircraft lessor AviLease has placed an order from Airbus to acquire 10 A350F freighter jets and 30 A320neo Family aircraft at the Paris International Airshow, according to a statement. The order is estimated to be worth some USD 3.5 bn, according to a Reuters report, and the delivery timeline was not disclosed. The agreement also includes the option to expand the order to 77 jets — adding 12 A350F freighters and 25 A320neo Family carriers.

We saw this coming: AviLease was expected to close an agreement with Airbus for 40 airplanes during the show, which comes as part of an effort to balance supplier choices and support growth.

Airbus has offered a competitive edge: The A350F freighter model is expected to anchor the benchmark in air cargo — with expanded loading capacity, longer range capabilities, and a reduced fuel burn by a minimum of 20%. The aircraft offers a 46 tonne lighter take-off weight than the competing model on the back of over 70% of the airframe being constructed from advanced materials.

On a roll: PIF placed an order last month for 20 Boeing 737-8 jets to boost the AviLease fleet, with an option for 10 more. The White House fact sheet put the total value of the purchases at USD 4.8 bn. The PIF-owned lessor currently boasts a fleet of 200 aircraft worth USD 8 bn — which it plans to grow to 500 by 2030 by capitalizing on strong domestic demand from airlines, including Riyadh Air, Saudia, and flynas.

Who’s bankrolling this? The leasing firm had plans to issue USD 2 bn in sukuk by 2027 — starting with a USD 750 mn tranche this year. The new funding is set to add to the company's USD 2.25 bn in existing loans, bringing its liquidity to 30% of total assets. It also secured a USD 1.5 bn unsecured revolving credit facility from a syndicate of 25 local and international banks from across the globe in April to support expansion plans, including investing in more modern and energy-efficient aircraft.

WHO ELSE PLACED ORDERS?

Riyadh Air locked in an order for 25 Airbus A350-1000 carriers during the show — with a possibility of increasing the order to 50 A350-1000, according to a statement. The order is in line with the Kingdom's plans to record 300 mn annual air passenger capacity by 2030.

A first: Riyadh Air is set to be the first Saudi carrier to fly the A350-100. The aircraft model has the capacity to operate utilizing up to 50% sustainable aviation fuel (SAF) type.

Forecasts were accurate: Earlier this week, Riyadh Air was poised to finalize an order for 25 Airbus A350-1000 jets. Riyadh Air was reportedly in talks with Boeing and Airbus for months, for an order of up to 50 additional widebody jets as it looks to expand its fleet. The airline is looking to secure scarce delivery slots for Airbus A350-1000 and Boeing 777X aircraft.

Others are reportedly lining up interest: Egypt’s flagship carrier EgyptAir could tap Airbus for six more A350 jets, industry sources told Reuters. The airline inked an agreement to uptake 10 Airbus 4350-900 carriers from the manufacturer last month, and is slated to boost 70-aircraft fleet and cap carbon emissions through the move — with onboarded aircraft models designed to consume up to 25% less fuel than traditional carriers.

The waiting game: EgyptAir also purchased and is awaiting the delivery of 10 Airbus A350-900 wide-body aircraft. The airline is also currently waiting to receive the first batch of 18 Boeing 737 Max 8 aircraft, which the company purchased in 2023 on lease and are scheduled for delivery this year or the next.

REMEMBER- EgyptAir recently secured funds for fleet expansion: Egypt’s Finance Ministry provided EGP 20 bn (c. USD 396.53 mn) financing facility to Egypt Air Holding Company to help expand the airline's fleet back in January. The airline is planning to expand its fleet to 125 aircraft over the next five years, up from 65 now, while also using the funds to try to reduce its debts.

AND THERE’S A BIT OF DRAMA-

France ordered Israel’s four major defense industry firms to close down their stands after they refused to remove offensive weapons from their display, Reuters reports. Israel’s defense ministry described the move against Israel Aerospace Industries, Rafael, Uvision, and Elbit as “outrageous and unprecedented,” accusing Paris of taking the step to guard French companies from Israeli competition.

The event will run throughout this week before wrapping up on June 22. Here’s a rundown of our previous coverage, in case you missed it:

Moroccan flag carrier Royal Air Maroc is close to finalizing an order for about two dozen Boeing 787 Dreamliners for long-haul destinations, and up to 50 Boeing 737s and 20 Airbus A220s for short-haul routes;

VietJet is in talks to acquire 100 A321neo narrow jets from Airbus;

Malaysian airline AirAsia is set to ink an agreement for nearly 100 regional jets at the Paris Airshow, but remains undecided between Airbus’ SE A220 or Embraer SA’s E2;

IndiGo is eyeing a 30 to 50 large order of ATR 72-600 planes.

A primer on alternative fuel bunkering and its MENA presence

Where do we stand on the switch to alternative shipping fuels? The shipping industry's decarbonization efforts hinge on the switch, but this transition presents significant challenges in terms of cost and production timelines. Switching to alternative fuels is projected to cost 1.5-4x more than traditional fuel by 2030, according to a report (pdf) by ship classification society ClassNK, and achieving net-zero emissions by 2050 would require the share of zero-emission fuels in shipping to rise to 25% by 2030, according to the International Maritime Organization’s (IMO) 2023 greenhouse gasses strategy. The projection — which factors in the whole lifecycle of fuels — focuses on ships with 5k gross tonnage and above.

The alternative-fuel tradeoff: Alternative fuels entail a trade-off in the required fuel storage volume and weight on board, a major consideration for ship design and cargo capacity, the ClassNK report outlines. Ammonia and methanol contain less chemical energy by weight compared to liquefied natural gas (LNG) — a ship running on ammonia or methanol will require roughly double the amount of conventional fuel for the same route. In numerical terms, a little over 1k tons of ammonia or methanol are needed for a route otherwise fueled by 420 tons of LNG or 435 tons of liquefied petroleum gas.

In cost terms: The price gap is expected to narrow over time as production swells and new incentive policies and legislation are introduced. The transition to alternative fuels will likely bring about a rise in shipbuilding and fuel costs, and a drop in regulation-associated costs, thanks to new rules expected to be adopted by the IMO.

Massive investments in greener shipbuilding and fuel production will be needed to meet the target, which would require production to reach around 106 mn tons for green methanol or 114 mn tons for green ammonia. The world’s shipping fleet would also need to ramp up the uptake of greener ships to reach a cumulative capacity of 352 mn gross tonnage.

REMEMBER- The IMO is set to ratify its net-zero framework next October, introducing new fuel standards and a global pricing mechanism for emissions in the shipping industry. If ratified, changes will take effect by 2027 and apply to ships over 5k gross tons, covering 85% of international shipping emissions. The framework draft was passed in April with support from 63 countries and 16 voting against it, including Saudi Arabia and the UAE.

What’s the status in our region? Oman's Sohar Port planned last year to adopt biofuel bunkering for its tugboat operations, following successful trials with the B20 blend — a formula consisting 20% biofuel, 80% diesel. The adoption of biofuel is expected to help the port lower its greenhouse gas emissions towards an initial target of 17% to conform to the country’s net-zero 2050 goal.

Fujairah Port is also on the job: Over in the UAE, Fujairah Port will see methanol and LNG dominating its alternative bunker fuels, with biofuels and ammonia following, Reuters reported in 2023, citing an online poll at the Fujairah Bunkering and Fuel Oil Forum. Dutch firm Vopak supplied its first biofuel for ship use at its terminal in Fujairah.

Other regional players are lining up interest: Adnoc Logistics and Services aims to significantly boost the supply of alternative marine fuels within the UAE and wider region through its subsidiary Integr8 Fuels, CEO Abdulkareem Al Masabi told S&P Global last week. This strategic move will be crucial for decarbonizing the Middle East's bunker mix.

Other possible first movers in the region:

Egypt’s Suez Canal Economic Zone (SCZone) was looking to roll out green methanol bunkering services before the initially expected launch date of 2027. Shipping behemoth Maersk reportedly held talks with the SCZone for bunkering services to fuel its green methanol-powered vessels in 2022.
Oman’s state-backed Asyad Group signed a joint study agreement late last year with energy firm OQ Alternative Energy and Sumitomo Corporation Middle East to ascertain the country’s potential to become a low-carbon fuel bunkering hub.
The UAE’s AD Ports Group signed an agreement this month with Masdar, Advario, and CMA CGM to explore developing an e-methanol bunkering and export facility at Abu Dhabi's Khalifa Port and Kezad.

Updates on zones, trucking, and maritime from Libya, Jordan, and UAE

ZONES-

China’s CHEC mulls projects in Libyan freezone: Libya’s Sirte Freezone Authority and maritime infrastructure player China Harbor‎ Engineering Company (CHEC) are considering several strategic projects in the zone, according to a statement. The projects include the development of Sirte Freezone port’s third phase, possible collaboration on port activities — such as supplying specialized equipment like cranes and marine tugs — as well as possible partnerships on rail, airport, and road projects.

Latest on Libyan zones: Egypt is pursuing plans to establish two industrial zones in Libya with investments of USD 250 mn, with some 22 Egyptian companies eyeing projects in the Libyan zones, Federation of Egyptian Industries’s Arab Cooperation Committee member Alaa Nasr told EnterpriseAM earlier this year.

TRUCKING-

Jordan amends, unifies fees on Syrian trucks: Jordan has lowered fees for Syrian trucks from 5% to 2% to expedite transit traffic and flow of goods between the two countries, according to a statement. The reduced fees apply to loaded or empty Syrian trucks, including refrigerated vehicles, transiting through Jordan or entering and exiting its freetrade zones — excluding trucks whose final destination is Jordan. Jordan has also suspended the JOD 200 fine for transporting cargo through the Jaber-Nassib border crossing.

SHIPPING + MARITIME-

#1- Fujairah Terminal, FFZA eye maritime investments: AD Ports logistics solutions subsidiary Fujairah Terminals has inked an MoU with the Fujairah Freezone Authority (FFZA) to develop Fujairah’s maritime sector capabilities, according to a statement. Under the agreement, the pair aim to attract further investment, boost operations, and support sustainable growth in Fujairah. The two parties seek to exchange statistical data, business forecasts, and other intelligence regarding container movement by road and sea.

Why the terminal is important: Developed in 2017, the Fujairah Terminals — located on UAE’s eastern coast — boasts a multi-purpose area for cargo services and offers several services, including container handling, general cargo, cruise, transshipment and others. It serves as a maritime gateway that aims to boost trade between GCC countries, India, the Red Sea, and East Africa.

#2- The Saudi Ports Authority (Mawani) added the IM2 shipping service, operated by Emirates Line and Wan Hai, to Jeddah Islamic Port, according to a statement. The new service — with a capacity of 2.8k TEUs — will connect the port to three regional and international ports, including Mundra in India, Alexandria in Egypt, and Mersin in Turkey.

ICYMI- Mawani recently added four new shipping services to Jeddah Islamic Port, including CMA CGM’s MEDEX with a capacity of 10k TEUs, SeaLand’s WARM with a handling capacity of up to 600 TEUs, 5CX with a 1.5k standard container capacity, and RESIN with a 1k standard container capacity.

Secondary tariffs to torpedo oil market, trip up future levies, BMI report finds

Trump's secondary tariff threats on oil trade could disrupt the global oil market and throw a wrench in the efficacy of future US sanctions, according to a BMI report published last week. The administration’s possible expansion of the sanctioning tool — secondary tariffs — is set to disrupt the markets in the short term, while accelerating efforts on the longer term to decouple from the US-dominated financial system, especially in the oil market, the report said.

SOUNDS SMART- Secondary sanctions are a type of punitive foreign policy tool that the US deploy to deter third party firms (non-US) and other countries from doing business with a designated entity. The tool entails threats against firms and countries which are found in violation of the sanctions from the international financial system, effectively raising pressure on their primary target.

The threats: US President Donald Trump is threatening a 25% supplemental tariff on goods imported into the US from any country purchasing Venezuelan oil on or after 2 April. Subsequent threats have targeted Russia and Iran, including a 500% secondary tariff on Russian oil and gas proposed by a bipartisan group of US senators.

A shake up of oil markets: Fitch predicts oil prices could hit USD 110-130 / bbl if the US goes ahead with its secondary sanctions threats. This risk is especially acute in the case of Russia given it holds both a large share of global oil production and a diversified range of buyers.

Would Opec+ come for rescue? While OPEC+ has spare capacity to largely offset this potential loss, bringing it online would take months and incur significant costs, and the volatile geopolitical situation and uncertainties on US policies may also act as a deterrent for such a move, according to BMI.

Calendar

JUNE

16-22 June (Monday-Sunday): International Paris Air Show, Paris, France.

17-18 June (Tuesday-Wednesday): Abu Dhabi Infrastructure Summit, Abu Dhabi Energy Centre.

17-19 June (Tuesday-Thursday): Terminal Operations Conference & Exhibition, Rotterdam, Netherlands.

18-19 June (Wednesday-Thursday): Eurasia Rail, Istanbul, Turkey.

18-27 June ( Wednesday-Friday): The International Maritime Organization’s Maritime Safety Committee meeting, London, UK.

19 June (Thursday): East Med Maritime Conference, Athens, Greece.

24-25 June (Tuesday-Wednesday): Middle East Rail, Dubai World Trade Center.

25-26 June (Wednesday-Thursday): Decarbonizing Shipping Forum, Hamburg, Germany.

JULY

1-3 July (Tuesday-Thursday): ASEAN Ports and Logistics, Jakarta, Indonesia.

22-24 July (Tuesday-Thursday): Intermodal Africa, Beira, Mozambique.

SEPTEMBER

1-3 September (Monday-Wednesday): Transport Middle East 2025, Salalah, Oman.

3-4 September (Wednesday-Thursday): Sustainable Maritime Industry Conference, Jeddah, Saudi Arabia.

4-10 September (Thursday-Wednesday): Intra-African Trade Fair, Algiers, Algeria.

7-10 September (Sunday-Wednesday): Comex Global Technology Show, Muscat, Oman.

24-26 September (Wednesday-Friday): Routes World, Hong Kong.

25 September (Thursday): World Maritime Day 2025.

30 September - 2 October (Monday-Thursday): Global Rail Transport Infrastructure Exhibition and Conference, Abu Dhabi, UAE.

OCTOBER

The International Maritime Organization (IMO) is set to formally adopt the Net-zero Framework this month, stipulating new fuel standards for ships and a global pricing mechanism for emissions.

1-2 October (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, Saudi Arabia.

7-8 October (Tuesday-Wednesday): Global EV & Mobility Technology (GEMTECH) Forum, Riyadh.

13 - 17 October (Monday-Friday): The Marine Environment Protection Committee’s second extraordinary session, London, UK.

14-15 October (Tuesday-Wednesday): Investing in Africa Conference and Expo, London, UK.

28-30 October (Tuesday-Thursday): Borneo International Maritime Week, Sarawak, Malaysia.

NOVEMBER

3-6 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

4-6 November (Tuesday-Thursday): Air Cargo Forum, Abu Dhabi, UAE.

17-21 November (Monday-Friday): Dubai Airshow, Dubai, UAE.

24-26 November (Monday-Wednesday) The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh.

EVENTS WITH NO SET DATE

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 two of Jafza Logistics Park to be completed.

2026

27-29 January (Tuesday-Thursday) Transport Middle East 2026, Abu Dhabi, UAE.

28-30 April (Tuesday-Thursday) Mediterranean Ports and Logistics, Porto, Portugal.

24-26 June (Wednesday-Friday) Transport Logistic & Air Cargo 2026, Shanghai, China.

7-9 July (Tuesday-Thursday) Asean Ports and Logistics, Kuala Lumpur, Malaysia.

17-19 November (Tuesday-Thursday) Intermodal Africa 2026, Luanda, Angola.

UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia.

2027

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

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