When can we see oil flows actually resume through the strait?

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WHAT WE’RE TRACKING TODAY

TODAY: Hormuz reopening won’t spark an immediate recovery in oil flows

Good morning, friends. We lead today with a question the market is still working through: Hormuz may be reopening, but when does the oil actually start moving? With mine-clearing, vessel bunching, and port congestion, the physical restart is a much longer road than the headlines suggest.

The framework for why that matters is now clearer. The details of the US-Iran agreement are out: a USD 300 bn development fund — already half committed — anchoring the agreement, with energy, logistics, manufacturing, and transport as the focus areas, sources tell Reuters. Under the terms, the US will also release all frozen Iranian funds and assets and lift all sanctions. Upon signing the framework agreement this Friday, the US will lift its naval blockade and — alongside Iran — ensure traffic through the Strait of Hormuz reaches pre-war levels within 30 days.

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Gigabytes and ambitions

Our friends at Hassan Allam’s digital infrastructure arm have committed USD 400 mn for the first phase of a new data center in Egypt, after securing a cloud-computing license from the National Telecom Regulatory Authority. Hassan Allam Digital Infrastructure and Data Center Solutions will execute a phased expansion plan for the facility, according to a statement.

Why it matters: Egypt wants to become a regional data-center hub, but it has some serious catching up to do. The country currently hosts only 14 facilities — representing just 5.5% of the region’s data centers, according to Data Center Map. Hassan Allam’s new facility gives Egypt more room to keep data within our borders, cutting latency and making financial transactions, AI processing, and cloud services more reliable.

Opening up the taps

Adnoc appears to be making up for lost time. The company has sold at least 30 mn barrels of spot crude to Asian refiners and trading houses so far in June, Reuters reports, citing trade sources in the know. Adnoc has been looking to boost its exports during the ceasefire, with more barrels being offered this week. The sales include Das, Upper Zakum, and Umm Lulu crude for June-August loading.

Who’s buying? Indian refiners purchased some 6 mn barrels, while China’s Unipec reportedly bought 6-8 mn barrels of Upper Zakum crude. South Korea’s SK Energy took 7 mn barrels of Umm Lulu crude, while Japan’s Eneos bought 3 mn barrels of Das crude.

IN CONTEXT- The sales come after Adnoc spent much of the conflict finding workarounds for exports from fields inside the Gulf. The company moved cargoes through Hormuz with transponders switched off and relied on ship-to-ship transfers outside the Gulf to reach buyers. Adnoc had also cut exports by more than 1 mn bbl / d from pre-war levels as disruptions hit flows through the strait, Reuters reports separately.

Adnoc is also preparing for future disruptions: As we previously reported, the company is considering a multi-fuel pipeline capable of exporting gasoline, jet fuel, and diesel, complementing existing efforts to build export routes less dependent on the Strait of Hormuz.

Market watch

Oil prices edged lower this morning as traders weighed the US-Iran agreement and Hormuz risks, Reuters reports. Brent crude futures declined USD 0.16 to trade at USD 78.80 / bbl by 03.40 GMT, while US West Texas Intermediate (WTI) slipped USD 0.25 to USD 75.80 / bbl.

The Baltic Index extends its downturn: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — was down 1.8% to 2,670 points on Tuesday, driven by the bigger vessel segments. The capesize index slipped 3.5% to 3,911 points, while the panamax index fell 1.1% to 2,266 points. The smaller supramax index rose 1.3% at 1,686 points.

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Hormuz may be reopening — but shipping’s physical restart will take much longer

The US-Iran agreement to reopen Hormuz is thawing the market — but has not opened it. Japan’s Mitsui OSK Lines CEO Jotaro Tamura — the world’s largest tanker operator by vessel count, with more than 900 ships — said shipowners will wait until the agreement is “material” and visible inside the strait before resuming crossings, the Financial Times reports.

And already, analysts are slashing their forecasts for oil prices. Goldman Sachs cut its Brent crude forecast for 4Q to USD 80/bbl, down from USD 90, and trimmed its 2026 average outlook to USD 75/bbl from USD 80 — the bank’s second downward revision in a week. It also expects Gulf exports to normalize to pre-war levels by end-July, earlier than Goldman’s previous end-August forecast.

Adnoc CEO Sultan Al Jaber’s estimate for how quickly flows will recover was a lot more bearish. Al Jaber said earlier it could take at least four months after the war ends for global oil flows to recover to 80% of pre-conflict levels, while a full return to normal volumes through Hormuz may not come before 1Q or 2Q 2027.

The checklist before ships move: naval safety assessments, insurer guidance, and no further attacks. “Vessel scheduling adjustments and reductions in emergency surcharges would be early indicators of growing confidence,” Antonella Teodoro, senior transport consultant at MDS Transmodal, tells EnterpriseAM.

The International Maritime Organization is still assessing whether vessels can safely transit — clearing mines, managing congestion, and establishing an evacuation corridor for seafarers stuck inside the Gulf for more than 100 days.

What happens when ships return all at once? Capacity that has been absorbed into longer voyages during the disruption gets released back into the market suddenly — creating a real risk of vessel bunching, port congestion, and pressure on hinterland logistics before networks can rebalance, Teodoro tells us.

Mine-clearing could be the slowest part of the restart — and it cannot be rushed. Mine-scouring using conventional minesweepers and underwater drones could take weeks — approximately 40-50 days — keeping shipowners cautious even after a political agreement is formally in place, Reuters reports.

Middle East crude is pricing the reopening before shipping has. Dubai and Murban curves

have flipped into contango — meaning futures prices are higher than spot prices, a signal that traders believe supply will return — for the first time since the war began, Bloomberg reports.

SOUND SMART- Contango is when future prices are higher than spot prices — the opposite of the backwardation that typically signals tight near-term supply. A flip into contango means traders expect supply to ease.

Around 500 ships are waiting to exit the Gulf through a strait that has gone from around 135 daily crossings to a trickle. Some vessels have reportedly tried to slip out under cover of darkness with GPS switched off.

Recovery ≠ rewind

Carriers will not simply reverse into their pre-war routes. “The recovery phase presents a window for carriers to reassess networks, vessel deployment, and capacity allocation rather than simply reverting to previous configurations,” Teodoro tells us. Shorter routes might be especially prioritized at the beginning — cutting voyage times and lifting vessel productivity before longer-haul reconfiguration happens, she adds.

Premiums could start falling within days of a stable security environment, but don’t expect everything to normalize at once. Carrier surcharges will adjust over subsequent sailing cycles; costs tied to schedule recovery and equipment repositioning will take longer, Teodoro notes.

But it could get worse before it gets better: If too much capacity returns quickly, there could be a rate risk, she explains. Freight rates have already been elevated: The Platts VLCC benchmark stood at USD 278.7k per day by the end of May, more than double the USD 75.9k per day average since the index launched in March 2024.

What shipping agencies and port operators will need to do is coordinate a managed trickle back into the market, not a flood — whether by adjusting service frequencies, rationalizing port calls, or potentially keeping some of the network changes introduced during the disruption.

Tankers are likely to move first; container lines, last. Energy trades are concentrated around the region and benefit directly from shorter transits — so tankers have the clearest commercial incentive to return quickly. Container lines face a more complex calculation: any routing change ripples through global service networks and schedules reliability across multiple trades, Teodoro says.

The 90-day test is not whether individual ports have normalized — it is whether carriers are making long-term network decisions rather than short-term routing patches. "Some ports may have largely normalized, while others continue to experience knock-on effects from schedule recovery, equipment repositioning, and changing service patterns," Teodoro says. Longer-term commitments are the clearest sign of durable confidence.

Dubai to award more than AED 55 bn in Al Maktoum Airport contracts in the coming months

The UAE is pushing ahead with its expansion of Al Maktoum International Airport, setting aside more than AED 55 bn in contracts tied to the project to be awarded by the end of the year, Dubai Crown Prince Hamdan bin Mohammed bin Rashid Al Maktoum said on X. The first phase of commercial operations is slated for 2032.

REMEMBER- This is the execution leg of the USD 35 bn airport plan approved in 2024. Sheikh Mohammed bin Rashid approved the design plan for the new terminal two years ago — and at full build-out, the airport is set to handle more than 260 mn passengers, 12 mn tons of annual cargo, around 400 aircraft gates, and five parallel runways.

This is also the planned handover from DXB to DWC: Al Maktoum International Airport — also known as Dubai World Central — will become the main hub for Emirates, Flydubai, and other airline partners. The new hub is planned to be five times larger than Dubai International Airport, with operations expected to move from DXB to DWC over the coming years.

Foreign suppliers are already in the orbit: UK Export Finance issued a USD 3.5 bn expression of interest in 2025 to support British participation in the airport’s expansion. Emirates is already earmarking USD 10-12 bn in investments for Al Maktoum International Airport.

Egypt eyes USD 120 mn Toshka logistics zone + Zhejiang Hongda picks Qantara West for USD 20 mn textile plant

Shoring up southern logistics activity

New Toshka logistics zone in Egypt? Egypt’s General Authority for Land and Dry Ports is reportedly seeking tenders for the establishment, management, and operation of a USD 120 mn specialized logistics zone in Aswan’s Toshka area, Al Borsa reports. The authority is seeking companies in the agricultural and agro-processing space to establish the facility on a plot of land spanning 1 mn sqm. The deadline for receiving applications is the end of October 2026.

Prioritizing agricultural storage and trade: The project aims to establish cold storage infrastructure for crops, silos for grain and cereals, and processing and packaging centers. A container and truck handling yards will also be set up to organize commercial transport movement between Egypt and African markets, especially targeting Sudan’s Qastal and Arqin land ports.

More investment for Upper Egypt: The project would partially ease some of the logistical difficulties inherent to agricultural and land reclamation projects in the area, namely, the EGP 4.7 bn five-year initiative by Egyptian agribusiness SEKEM. Refrigeration and nearby silos would help prevent spoilage under the desert heat prior to transit up to Cairo or northern ports, providing massive freezing warehouses and advanced silos right at the source to preserve the yields.

Another Chinese textile project

China’s Zhejiang Hongda will set up a USD 20 mn textile manufacturing and processing plant in Qantara West under a newly inked contract with the Suez Canal Economic Zone. The project will earmark 70% of its output to international markets and create 500 direct jobs.

DATA POINT- Qantara West has so far secured 53 projects worth USD 1.5 bn and spanning industry, service, and logistics.

Saudi Arabia accelerates pivot to land logistics amid regional instability

Saudi Arabia’s trucking corridors are proving vital in times of regional instability. As the US-Iran war has kept Hormuz in a state of limbo, logistics providers are turning to land routes to circumvent the maritime corridor — and Saudi Arabia is poised to capture the upside of this pivot, according to Bloomberg.

“Alternative routing such as land bridges and smaller ports may be more cumbersome, but it is working,” freight intelligence platform Xeneta’s Peter Sand told the business information service. The strategy paid off for German industrial giant Siemens Energy, which identified a 2k-km overland route linking Jeddah to Dammam that helped the firm to keep its business running despite shipping disruptions, Siemens’ Karim Amin said. And Siemens wasn’t alone: MSC alerted customers back in March of inland alternatives connecting King Abdullah and Jeddah ports to ports in the Arabian Gulf, allowing cargoes to bypass the Strait of Hormuz on their way to Asian destinations.

The pivot could become permanent: Although a US-Iran agreement seems to be imminent, logistics players are still wary of returning to traditional routes. “Even if the Strait of Hormuz reopens, shippers will be cautious about returning to an over-reliance on ports such as [the UAE’s] Jebel Ali because the geopolitical situation will remain fragile and a sudden deterioration puts them back to square one,” Sand said.

IN CONTEXT- The war seems to have fast-tracked the Kingdom’s land and rail ambitions. Saudi Arabia Railways launched five freight routes connecting ports on the Arabian Gulf to the Kingdom’s northern and central logistics zones, and at the end of May, Saudi Arabia joined the GCC railway agreement, which plans to link the six Gulf states via a 2.1k-km railway. There’s also the USD 7 bn Riyadh-Jeddah Landbridge rail project, set for completion by 2034.

^^ Want to read more? Check out our deep dive into how Gulf supply chains rerouted overland when Hormuz went dark.

Calendar

JUNE

21-24 June (Sunday-Wednesday): Saudi Smart Logistics, Riyadh, Saudi Arabia.

22-23 June (Monday-Tuesday): Decarbonizing Shipping Forum, Rotterdam, Netherlands.

AUGUST

30 August-1 September (Sunday-Tuesday): Air Cargo Middle East, Riyadh, Saudi Arabia.

30 August-1 September (Sunday-Tuesday): Saudi Warehouse and Logistics Expo, Riyadh, Saudi Arabia.

SEPTEMBER

16-17 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, Saudi Arabia.

22-24 September (Tuesday-Thursday): Seamless Middle East, Dubai, UAE.

28-30 September (Monday-Wednesday): Transport Logistics Middle East, Riyadh, Saudi Arabia.

OCTOBER

12-14 October (Monday-Wednesday): The Airport Show, Dubai, UAE.

21-22 October (Wednesday-Thursday): Global Ports Forum, Singapore.

26-29 (Monday-Thursday): Air Cargo Forum, Miami, US.

27-29 October (Tuesday-Thursday): Routes World, Riyadh, Saudi Arabia.

NOVEMBER

2-5 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

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