TODAY: Rail is advancing, but not at network scale

Good morning, ladies and gents. The path forward for US-Iran talks remains murky — with US Secretary of State Marco Rubio signaling that Tehran won’t loosen its grip on Hormuz.

And as efforts to find workarounds around Hormuz continue, we revisit a question we raised earlier in the war: can inland routes meaningfully step in? More than six weeks on, rail has yet to provide a clear answer. It remains caught in a strategic gray zone — developed enough to feature in contingency planning, but too fragmented to function as a reliable backbone.

In slightly more upbeat news: An LNG tanker operated by Adnoc Logistics & Services appears to have passed through Hormuz, possibly becoming the first vessel of its kind to do so since the outbreak of the regional war, Reuters reports, citing ship-tracking data. After weeks without broadcasting its location, the vessel appears to be off the west coast of India.

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ZONES — Egypt’s government is moving to build a USD 600 mn integrated petroleum logistics zone at Alexandria Port, a government source tells the Arabic press. The first phase will cover some 300k sqm and include a 900-meter marine berth as part of a wider Greater Alexandria Port development.

What’s next: Egypt’s Transport and Oil Ministries are still wrapping up contracts, including the usufruct fee payable to the Alexandria Port Authority and a financing structure blending foreign and local currencies. Full details — including partners and equity splits — are expected to be announced soon.

The Red Sea is already in play: Alongside working to rent our warehouses on the Red Sea for crude oil and refined products to AD Ports, we’ve already offered 10 crude and petroleum storage facilities for lease on the east coast, aiming to attract oil deliveries from Saudi Arabia, Kuwait, Iraq, and Qatar.

BACKGROUND- Egypt has around 29 mn barrels of spare storage across its main ports — a figure that positions it as a viable option for traders looking for optionality and strategic location. The country operates 19 commercial ports, 14 of which are undergoing revamps, alongside nearly 79 petroleum storage facilities built or upgraded in recent years.

TRADE — Pumping gas to Lebanon soon? Energy officials from Syria, Jordan, and Lebanon reviewed the final steps and launch timelines needed to reactivate the Arab Gas Pipeline and prepare trial pumping to Lebanon. Technical tests have been completed on the route from the Jordanian-Syrian border to the Lebanese border.

Why it matters: The power system in Lebanon is running on emergency math, as state supply remains capped well below full-day coverage. Unpaid public-sector bills are further limiting the ability to buy fuel and add supply hours.

ENERGY — Goldman Sachs is calling a fast comeback for Gulf oil: Goldman Sachs estimates Gulf oil production — which took a hit during the war — to rebound within months of a full reopening of Hormuz. However, it flags a slower grind back to pre-war levels, citing external estimates that 70% of lost output could return within three months and roughly 88% within six months.

The scale of the shutdown: Goldman estimates some 14.5 mn bbl / d — about 57% of pre-war Gulf supply — was taken offline this month, driven largely by precautionary shutdowns and inventory management rather than physical damage.

The real constraint could be logistics: Available empty tanker capacity has dropped by nearly 130 mn barrels — or 50% — limiting how fast crude can actually move once exports resume. At the same time, prolonged well shutdowns risk reducing flow rates.

Not all producers are playing the same recovery game. Goldman flags higher risks for Iran and Iraq, where reservoir conditions, infrastructure constraints, and sanctions complicate recovery, while the UAE and Saudi Arabia can lean on spare capacity to bring barrels back relatively fast.

It all comes down to the strait, with the bank noting that a safe and sustained reopening of Hormuz — in the absence of renewed attacks on oil infrastructure — would allow production to bounce back quickly.

REMEMBER- There’s no consensus on recovery timelines: Goldman’s “months” estimate sits within a widening range of projections, including IEA head Fatih Birol’s two-year outlook. These recovery paths diverge based on assumptions about the extent of infrastructure damage — and its USD 58 bn repair bill — as well as restart capacity and whether flows will totally normalize in Hormuz. For the full play, check our deep dive onthe Gulf’s energy reset.

Market watch

Oil prices rose 1% — extending gains as US-Iran talks stall and Hormuz remains largely shut, keeping Middle East supply constrained, Reuters reports. Brent crude futures for June increased USD 1.41 to trade at USD 109.64 / bbl by 04.00 GMT, while US West Texas Intermediate (WTI) gained USD 1.27 to USD 97.64 / bbl.

The Baltic Index maintains its rising trajectory: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — was up 0.04% to 2,666 on Tuesday.

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