Good morning, friends. We’re wrapping up the week with a brisk read focused on the Gulf’s logistics buildout, led by a fresh USD 300 mn wager on warehouses and distribution centers by Octo and GFH as well as a SAR 3.2 bn pipeline of new ports, rail, and logistics projects in Saudi Arabia’s Eastern Province.

There’s one logistics story overshadowing all the others this morning. Conflicting reports from Iran and the US have left the status of Hormuz unclear, with Tehran saying the waterway has been closed to shipping and Washington maintaining that commercial traffic continues to transit the strait.

Markets are reacting accordingly: Oil jumped on the news, with Brent crude rising over 2% to USD 95.14. Asian markets opened lower — extending losses initially triggered by a tech selloff — and in the US, equities are on track to open in the red with futures down in response to the attacks.

Yanbu keeps Europe flying

Saudi Arabia’s jet fuel exports to Europe are on track to surpass pre-war levels, with exports from Yanbu to the EU and UK hitting 118k bb / d in the first week of June, quantities not seen since mid-2025, according to Kpler and Vortexa data cited by Reuters. Our monthly high this year was the 77k bb / d seen in January.

The workaround is simple: Before the closure, the Middle East was Europe’s main jet fuel supplier, sending around 300k bbl / d through Hormuz out of the continent’s total 550k bbl / d imports. With the waterway largely blocked, Saudi Arabia is leaning harder on Yanbu, turning the Red Sea port into a critical pressure-release valve for Europe’s aviation fuel supply chain.

Europe is filling the rest of the gap elsewhere: The Saudi flows are landing alongside higher imports from the US and Nigeria, which averaged around 200k bbl / d in May. That is why Europe has so far avoided a visible jet fuel shortage, even as fuel prices remain the bigger pain point for global carriers’ bills.

Kuwait looks back at the game

Kuwait is offering spot crude cargoes to Asian refiners for the first time since the disruptions began. At least 4 mn barrels of medium-sour Kuwait Export Crude are being marketed to refiners in China and South Korea, Bloomberg reports, citing traders familiar with the matter. The barrels are being offered directly by Kuwait Petroleum Corporation rather than through intermediaries, with the cargoes already positioned outside Hormuz and available for prompt delivery into Asia.

The move points to a small but notable increase in tanker activity around Kuwait's export system. The VLCCs Al Riqqa and Dar Salwa were last tracked loading at Mina Al Ahmadi in late May and early June before their AIS signals stopped transmitting, according to Bloomberg vessel-tracking data. Their current locations remain unknown, but the timing suggests Kuwait may be building a buffer of export barrels beyond the strait to preserve access to Asian buyers.

On a long-term fix: Kuwait Petroleum is in discussions with Saudi Arabia and the UAE about expanding their existing pipeline systems to accommodate Kuwaiti crude exports, CEO Sheikh Nawaf Al Sabah said. No timeline was provided, and the stage of the discussions remains unclear.

Market watch

Oil prices climbed this morning after Tehran announced the closure of Hormuz and Washington threatened further strikes, Reuters reports. Brent crude futures increased USD 1.48 to trade at USD 94.58 / bbl by 02.43 GMT, while US West Texas Intermediate (WTI) gained USD 1.71 to USD 91.74 / bbl.

The Baltic Index continues to slide: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — was down 1.7% to 2,771 points on Wednesday. The capesize index slipped 3.2% to 4,301 points, while the panamax index was up 0.3% to 2,211 points. The smaller supramax index was up 0.3% to 1,618 points.

PSA

Maersk adds heavy-load surcharge: Danish shipping firm Maersk will apply a USD 500 heavy-load surcharge to 20-ft dry and tank containers moving from North India, Pakistan, and the Middle East to North America, effective 9 July. The fee will apply to boxes with a verified gross mass (VGM) above 24 metric tons, with VGM including the cargo, packing and securing materials, and container tare weight. The charges apply to all Ocean products except SPOT and Maersk Go.

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