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.

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