Good morning, nice people. We have a brisk issue to kick off the week with news emerging from Egypt’s West Port Said Port along with a pile of 1Q earnings flowing in as earnings season pushes on. First, sparse but positive news emerges from US-China talks in Geneva…

THE BIG LOGISTICS STORY- US + China wrap Geneva trade talks: The US is saying it reached an agreement to reduce its trade deficit after reaching an "important consensus" with Chinese officials. Details are set to emerge in a joint statement later today and a new economic dialogue forum between the pair is on the horizon, with Chinese Vice Commerce Minister Li Chenggang saying the statement would contain "good news for the world."

The buildup: US President Donald Trump is mulling the idea of imposing an 80% tariff on Chinese goods as a de-escalation move from his intended 145% tariff slap, according to Trump’s post on Truth Social posted on Thursday. The US government was looking at reducing tariffs to less than 60% ahead of its talks in Geneva that concluded yesterday — citing China’s willingness to match.

MARKET REAX- Asia-Pacific markets rose this morning in reaction to the news. Hong Kong’s Hang Seng Index gained 1.03%, while mainland China’s CSI 300 index notched up 0.89%. Over in Japan, the country’s benchmark Nikkei 225 and broader Topix index showed early gains to trade flat, while in South Korea, the Kospi index rose 0.47%.

Oil prices also rosein reaction to the trade talks progress, with Brent crude futures gaining USD 0.27 to USD 64.18 a barrel at 00.01 GMT, while the US West Texas Intermediate (WTI) edged up by USD 0.28 to reach USD 61.30 a barrel by 06.32 GMT.

The US also inked a limited bilateral trade agreement with the UK maintaining a 10% blanket tariff on UK imports into the US from the current 27.5%. The adjusted rate will be applied on the first 100k British vehicles. The US also agreed to give the UK preferential treatment in any further tariffs imposed under probes conducted for national security threats, including the ongoing probe on pharma and semiconductors.

That’s not all for Britain: British airplane parts entering the US will be exempt from tariffs, including Rolls Royce engines and other similar parts. The new agreement will make sure the aerospace industry sees “zero tariffs,” UK Secretary of Business Jonathan was quoted as saying.

This story grabbed a lot of ink in int’l press: Reuters | Bloomberg | CNBC | The Guardian | BBC | CNN | Financial Times | The New York Times | The Washington Post

HAPPENING THIS WEEK-

US President Donald Trump will land in the Gulf tomorrow in a bid to drum up investment and expand trade with our region. Agreements in investment, oil, defense, AI infrastructure, and nuclear power, are all in the cards when Trump starts his tour in Saudi Arabia on Tuesday before heading on to the UAE and Qatar.

The swing through the region is set to see “a huge number of investment and trade [agreements] happening,” Arab News’ Faisal Abbas told CNBC, stressing that injections of capital should be a two-way street. A potential lifting of the 10% tariff on aluminum and steel could also be on the agenda, CNBC reported elsewhere. Gulf officials are actively looking to tie fresh investment and big purchases of US goods to preferential tariff treatment for exports from our region.

Eyes on the prize: Major regional airliners are readying big Boeing orders during Trump's visit. Qatar Airways is set to take the lead by finalizing an order of 100 Boeing-made widebody jets that will include Boeing 787 Dreamliner aircraft along with a smaller number of 777x jets, the sources said. UAE’s Emirates and flydubai are also mulling widebody jet orders, with flydubai eyeing hundreds of 737. A potential easing of access to Nvidia chips for the UAE and a broader bilateral chip agreement could be on the table during talks.

WATCH THIS SPACE-

#1- Budget carrier Flynas is due to announce its IPO indicative price range today, kicking off institutional bookbuilding through to Sunday, 18 May. The PIF-backed firm is taking a 30% stake to Tadawul’s main market in a hybrid offering of new and existing shares, with proceeds set to be split between funding fleet expansion, and partially cashing out selling shareholders.

Flynas is poised to become the region’s first airline to IPO in nearly two decades, and only the third carrier to list after Air Arabia and Jazeera Airways went public in the early-2000s. The low-cost airline, which secured regulatory approval last month, is now on track to beat Abu Dhabi’s Etihad Airways to market, after shelving plans for a 2018 listing.

#2- UAE carriers are progressively restoring flight operations to Pakistan following the reopening of Pakistani airspace yesterday after a temporary closure due to heightened tensions with India. All airlines advised passengers to check their flight status and notifications.

Emirates has resumed its scheduled services to Pakistani cities, including Karachi, Lahore, Islamabad, Sialkot, and Peshawar, the airline said in a travel update. Air Arabia has also fully resumed its operations to and from Pakistan, according to their travel update, while Flydubai announced the commencement of daily flights to Peshawar starting May 15, 2025, expanding its network within Pakistan, it said in an announcement.

Etihad Airways has reinstated most of its flights between Abu Dhabi and Pakistan. However evening return journeys from Karachi and Islamabad, remain canceled as of today, according to a travel alert.

#3- Will Egypt welcome startups in its freezones? Freezones in Egypt will begin hosting export-oriented service startups for the first time, General Authority for Investment and Freezones (GAFI) head Hossam Heiba said. An area of 9k sqm will be allocated for the administrative and operational headquarters of startups, with the aim of attracting investments from companies operating in software exports and AI-powered applications.

Support on ground: The zones will house supporting institutions for startups in consulting, marketing, and legal service, Heiba said.

AND- A law regulating financial and business centers will be out this year as part of wider efforts to “transform Egypt into a regional hub for investment funds, particularly VCs to mobilize local and foreign funding for Egyptian startups,” Heiba added.

ALSO- Could we see confidence returning to the Suez Canal soon? Suez Canal Authority head Osama Rabie urged global shipping lines to reassess their routes and consider a gradual return to the canal amid improving security conditions in the region. This came during a meeting with representatives of 25 shipping lines, during which Rabie pointed towards the US’ recent ceasefire with Yemen’s Houthis as a sign of reduced maritime risk, according to a statement released on Friday.

Logistics players respond with cautious optimism: Representatives from major global shipping lines — including Maersk, CMA CGM, and Evergreen — expressed tentative support for resuming Red Sea transits during the meeting, though most agreed that sustained stability is key to restoring confidence and fully returning to the canal. Several industry executives proposed measures to ease cost pressures on operators, including temporary incentives, renegotiating ins. premiums, and expanding ship repair services.

#4- US sanctions China refinery for Iran crude links: The US Treasury Department has sanctioned the China-based independent refinery Hebei Xinhai Chemical Group in addition to three port terminal operators in Shandong Province for allegedly buying hundreds of mns of USD worth of Iranian crude, according to a statement released last week.

Third time this year: The Trump administration sanctioned Shandong Shengxing Chemical Co, another independent Chinese “teapot” refinery last April, one month after its first sanction salvo of the kind on Shandong Shouguang Luqing Petrochemical.

The fallout: Successive sanctions on Chinese teapots have disturbed the refineries’ ability to receive Iranian crude and prompted them to sell under different names, Reuters reported last week, citing unnamed sources. The threat of sanctions have also reportedly deterred larger-scale Chinese refineries from snapping up Iranian crude, with five plants pausing orders lest Washington sanction them as well, two trading executives told Reuters.

MARKET WATCH-

#1- OPEC oil output dips in April despite planned hike: Opec+ crude output dipped by 30k barrels a day (bbl / d) m-o-m to 26.6 mn bbl / d in April, according to a Reuters survey released last week, as a sharp drop in Venezuelan exports and smaller declines in Iraq and Libya offset gains from Iran. This came despite the group’s long-awaited output hike that saw Opec+ begin rolling back cuts last month. The group is also set to increase hikes in the coming months, citing healthy market fundamentals, despite weak oil prices.

#2- China refiners look to Adnoc’s Murban: Two independent Chinese refineries have purchased 1 mn barrels of Abu Dhabi’s Murban crude each — at a premium of USD 5 a barrel to August ICE futures, defying habitual reliance on cheap crude shipments from Russia and Iran, people familiar with the matter told Bloomberg. The spot buys of Adnoc’s flagship oil — made by China’s Fuhai Group and Shaanxi Yanchang Petroleum — are scheduled for delivery in June. Analysts reportedly attributed the move to the Middle East’s ample supply of crude — resulting in competitive prices — while others pointed to the rising cost of fuel oil alternatives.

India has also been snapping up Murban crude: Indian and Chinese oil refiners were reportedly resorting to Murban earlier this year, when the market was concerned over possible restrictions on Russian and Iranian crude tightening global supply. Indian state refiners bought up to 6 mn barrels, while China’s Sinopec subsidiary Unipec also snapped up barrels.

#2- Baltic index takes a dip: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was down 1.3% to 1,299 points on Friday. The capesize fell nearly 2.5% to 1,709 points, while the panamax slipped by 0.7% to 1,353 points. The smaller supramax index grew one point to 969.

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CIRCLE YOUR CALENDAR-

The UAE will host the Seamless Middle East from Tuesday, 20 May to Thursday, 22 May in Dubai. The event will cover topics including digital marketing, e-commerce, and retail and merchant payments.

Saudi Arabia will host the Saudi Warehousing & Logistics Expo from Tuesday, 27 May to Thursday, 29 May in Riyadh. The expo will host over 18k supply chain industry professionals and more than 400 exhibitors. It will also explore over 3.5k solutions.

Morocco will host the International Conference on Logistics and Supply Chain Management from Wednesday, 28 May to Friday, 30 May in Casablanca. The conference will cover scientific research, technologies, and environmentally friendly digital solutions in the logistics, transport and supply chain sectors.

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