Good morning, everyone. Today’s issue is basically a map of multiple plan Bs around Hormuz in motion. Three separate stories cover three separate corridors: gas, crude, and now a decades-old pipeline pulled off the shelf.

Adnoc Gas’ 2Q net income halved on Hormuz disruptions as LNG and LPG cargoes piled up with nowhere to go — and the company’s answer is a new export terminal on the UAE’s east coast.

Egypt and Libya are dusting off an old pipeline plan. An 800-km line that would deliver Libya’s oil to Egypt’s refiners by pipe instead of by tanker.

Iraq is running a similar playbook on a bigger scale. The country is after a USD 15 bn pipeline system to move up to 2 mn bbl / d of Basrah crude north, as it aims to never let a single chokepoint squeeze its exports again. Let’s dive in.

Destination Sahel Issue III drops this week, and we’re diving into how the North Coast is adapting to a changing market.

Developers are recalibrating as buyer behavior shifts, luxury retail is carving out a bigger piece of Sahel’s economy, and the wellness and sports scene has become a summer destination on its own.

In this issue, we get into what’s actually changing on the ground, from how developers are adjusting their pitch to where to shop and how to stay active this season.

Coming straight to your inbox tomorrow, 12 August.

Ways out for Basrah crude

Iraq is putting USD 15 bn behind a pipeline system designed to keep crude moving when Hormuz doesn’t. The Iraqi Oil Ministry agreed with a global consortium led by US energy major Chevron to build a crude pipeline from Basra to Iraq’s far north with capacity of up to 2 mn bbl / d — an expanded version of the USD 4.6 bn Basra-Haditha pipeline already headed to tender.

The country is accelerating plans to diversify its crude exports after regional disruptions cut shipments to 1.5-1.7 mn bbl / d from some 3.4 mn bbl / d before the war, Oil Minister Basem Mohammed Khudair said at a press conference carried by the Iraqi News Agency. Production currently stands at some 2.7 mn bbl / d, with oilfields ready to restore output and exports once shipping conditions improve, he added.

The plan is diversification on all fronts: Iraq has been widening its routes, including a one-year agreement with Ankara allowing Iraqi crude exports through Ceyhan at up to 750k bbl / d. It’s also been trucking fuel oil to Syria’s Baniyas to stress-test that corridor. Overseas, Baghdad is working to establish storage in several countries to increase export flexibility, echoing similar moves by Saudi Arabia, the UAE, and Kuwait.

It all traces back to Hormuz: Iraq was one of the Gulf producers hit hardest when access through the strait tightened. Its March export collapsed to 17.4 mn barrels from 101.7 mn barrels a year earlier, while southern storage constraints pushed output sharply lower as barrels had nowhere to go. Baghdad’s wager is that no single route should ever again be able to freeze its exports.

Suez comeback continues

Shipping giants Maersk and Hapag-Lloyd rerouted their joint AE19 Gemini service from around the Cape of Good Hope to the Suez Canal, according to a press release. The companies called the move a “step towards a gradual return to the trans-Suez corridor,” following assessments of the security situation in the Red Sea. The service connects Asia, Saudi Arabia, Egypt (via Port Said), and other Mediterranean ports, before doubling back to Singapore.

The broader comeback: The decision comes after Maersk rerouted three services through the Suez Canal last month — most recently resuming the WAF6, MECL, and the jointly operated A15 loop.

US-bound crude exports fall to zero

Saudi crude exports to the US fell to zero throughout July, the first full month without Saudi shipments since 1985, Bloomberg reports, citing preliminary data from the Energy Information Administration. The drop marks a sharp reversal from 1Q this year, when US refiners were taking an average of more than 500k bbl / d of Saudi oil, roughly 15.5 mn barrels a month.

A second disruption layered on top of Hormuz is behind the shift. The Kingdom had been routing crude west through the East-West pipeline to Yanbu to sidestep the strait, but last month’s Houthi threats against vessels calling at Saudi ports in the Red Sea made that bypass commercially risky for Western firms, closing off both routes at once.

Venezuela is the clearest beneficiary: US imports of Venezuelan crude rose to 18.2 mn barrels for the month, roughly 586k bbl / d, from a monthly average of around 15.2 mn barrels in 2Q.

The halt may prove temporary: Saudi shipments to the US are expected to recover to around 300k bbl / d in August, the business information service reports, citing Kpler data.

Cheap crude, costly ride

Hormuz disruption is making the trip expensive… India’s Reliance Industries has booked a Sinokor supertanker to lift 2 mn barrels of Iraqi crude from Basrah, paying a record USD 23-25 mn for the voyage versus roughly USD 2 mn before the war, Reuters reports. The tanker was fixed at 1.2k Worldscale — the standard reference cost for transporting oil on a route, around 12x the benchmark rate — as the pool of shipowners willing to send VLCCs through Hormuz remains thin.

…but the barrel itself is cheap: Iraq’s Somo is offering Basrah crude at around USD 25-27 / bbl below Dubai benchmarks, a markdown steep enough that Reliance expects to save several mns on the cargo even after the record freight bill. The catch is that Somo is selling on a loading basis, leaving buyers to arrange their own vessels and carry the freight and transit exposure themselves.

Market watch

Oil prices held near a one-week high on Tuesday, as traders grew less confident that the U.S. and Iran would reach an agreement to reopen the Strait of Hormuz, Reuters reports. Brent crude futures fell USD 0.11 to USD 87.62 / bbl by 04.05 GMT, while West Texas Intermediate (WTI) climbed USD 0.05 to USD 82.08 / bbl.

The Baltic Index barely moves: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 0.2% to 3,083 points on Monday. The capesize index dropped 0.5% to 5,105 points, while the panamax rose by 0.4% to 2,306 points. The smaller supramax slightly changed to 1,603.

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