Good morning, friends. It’s a relatively calm start to the week, although we have plenty to keep you busy on this (very) warm Monday morning.

WATCH THIS SPACE-

#1- US lawmakers are calling for a probe into Microsoft-G42 partnership: Republican lawmakers are calling on the Biden administration to prepare a formal intelligence assessment of Microsoft’s USD 1.5 bninvestment in Emirati state-owned AI firm G42 in a letter (pdf) addressed to US National Security Advisor Jake Sullivan, citing concerns over the IHC-backed AI outfit’s ties to China.

The letter referred to the investment as one of the most “consequential US investments in the Middle East in decades,” and urged the administration to implement national safety safeguards, highlighting risks posed by transferring “highly sensitive, US-origin technology” and “[the US’] most critical AI technology,” without a proper regulatory framework. The congressmen asked for the assessment to be conducted before the partnership enters its second phase, which will involve the export of US technologies.

REFRESHER- In February, G42 was reported to have already offloaded all of its investments in China — including a USD 100 mn stake in ByteDance — reportedly in a bid to appease US partners, culminating in Microsoft investing some USD 1.5 mn in G42. The second phase of the agreement entails Microsoft exporting large-scale AI components to the UAE, which will require licenses from the US government. Concerns that the US might pull the plug on the partnership have been swirling for weeks now, with Bloomberg recently saying that Pentagon officials are doubting G42’s commitment to fully divest from China.

The story was picked up by Bloomberg, Reuters, and the Financial Times.

#2- Off-the-record shipments of Kurdish oil to Iran are on the rise despite the closure of the oil pipeline between Iraq’s semi-autonomous Kurdish region and Turkey last year, a Reuters investigation found on Thursday. Some 1k tankers transporting around 200k barrels of cut-price oil travel to Iran, and on a smaller scale Turkey, each day, amounting to around USD 200 mn per month. The volume of unofficial exports is a factor in Iraq’s failure to adhere to the OPEC+ output cuts this year, an Iraqi official told the newswire.

The exports have not been approved by the Iraqi government, Iraqi Oil Ministry spokesperson Assim Jihad told the newswire, while Iranian and Turkish officials failed to respond to requests for comment. The US, a close Kurdish ally, is assessing if the trade breaches its economic sanctions on Iran, an unnamed US official told the newswire. Evaluating the trade may be tricky, however, as its proceeds are not accounted for or registered by the Kurdish Regional Government (KGR).

#3- Kuwait’s warehouse rental prices have doubled to KWD 400 following the Mangaf fire last month, the Arab Times reported last week. The increase in rental prices is largely due to “crisis traders” leasing unused residential spaces as warehouses and charging inflated prices, according to Director General of the Kuwait Industries Union Huda Al-Baqshi. The surge threatens food and pharma security in the country, experts warn.

#4- Egypt denies Suez Canal sale rumors: Egypt’s cabinet has denied rumors about a government plan to sell the Suez Canal for USD 1 tn, saying the canal will remain fully owned by the Egyptian state, according to a Saturday statement. The cabinet explained that according to the Egyptian constitution, “the state is committed to protecting, developing, and preserving the Suez Canal as an international waterway that it owns.”

MARKET WATCH-

#1- Baltic index records weekly gain: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was up 2.6% to 1,997 points on Friday, logging a weekly gain impacted by high vessel rates, Reuters reports. Capesize increased 3.6% to 3,296 points, while the panamax index inched up 2.4% to 1,678 points. The smaller supramax segment rose 0.2% to 1,364 points.

#2- Oil prices eased on Friday as investors considered weak US consumer demand against an anticipated Fed rate cut in September, Reuters reports. Brent crude futures were down USD 0.37 to USD 85.03 / bbl, while US West Texas Intermediate fell USD 0.41 to USD 82.21 / bbl.

DATA POINT-

The Saudi General Authority of Civil Aviation (GACA) recorded a 41% y-o-y increase in airfreight volume in 1H 2024, hitting 606k tons, according to a statement. The authority saw a 17% y-o-y increase in passenger numbers to 62 mn, while the number of flights saw a 12% y-o-y growth to 446k.

Saudi Ports Authority (Mawani) saw 9.2% y-o-y growth in cargo throughput in June, hitting 27.6 mn tons from 25.3 mn tons in the same month last year, according to a statement. Exported containers went up 7.8% to 228k TEU, while imports rose 9.9% to 245.6k TEU. Meanwhile, transshipment container volumes dropped 54.9% y-o-y to 121.3k TEUs.

CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Warehousing and Logistics Expo on Monday, 2 September to Wednesday, 4 September in Riyadh. The event will bring together leaders in the supply chain, warehousing, and logistics industry from across the Kingdom to discuss investments, trade, geopolitical risks, and localized manufacturing.

Egypt will host the Egypt International Airshow on Tuesday, 3 September to Thursday, 5 September in El Alamein. The event will host a range of discussions touching on industrialization, digitalization, and globalization in the regional commercial aviation sector. During the event, aircrafts and innovative aerospace products, and services will be showcased.

Saudi Arabia will host SkyMove MENA on Tuesday, 10 September and Wednesday, 11 September in Riyadh. The event will gather global industry stakeholders, experts, and service providers to discuss challenges in the regional aviation industry.

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