id: 2024-07-23-05:34:11:041t

Good morning, friends. It’s a busy morning with a basket of updates cutting across the entire industry from Oman, Iran, UAE, and Saudi Arabia. First, there’s more trouble ahead on the heels of Israel’s attack on Hodeida Port …

WATCH THIS SPACE-

#1- Fuel shortages are expected to hit northern Yemen as the result of an Israeli attack on Yemen’s Hodeida Port on Saturday, as rebuilding the damaged infrastructure will most likely be a lengthy and costly process, The New York Times reports, citing an unnamed senior regional expert from research firm Navanti Group. The fire could take days to put out, says the S&P analysts citing port officials. The Houthi-controlled Hodeida port is a key entry point for fuel imports and international aid for Houthi-held areas of Yemen.

The port is a vital point of infrastructure for over 20 mn Yemenis residing in the north, who depend on aid, food imports, and other goods entering the country via the gateway, NYT writes. Attacks on Yemen's port infrastructure are unlikely to prevent further Houthi attacks, but will escalate human suffering, regional experts told the news outlet.

Background: A blaze erupted in Yemen’s Hodeida Port on Sunday following an Israeli strike on the harbor that killed at least three people. The attack by Israel comes in response to a Houthi drone strike on Tel Aviv last Friday.

#2- Boeing delays thwart flydubai’s expansion plans: UAE’s budget carrier flydubai’s expansion plans will be significantly hampered by delays in Boeing’s delivery schedule, the company said in a statement yesterday. The airline is now working on “evaluating its route development plans and potential frequency revision across the network due to a lack of new aircraft deliveries over the next few months.” The delay is also expected to affect flydubai’s customers and its financial performance, it said in the statement. Fourteen 737 MAX aircraft, scheduled for delivery this year, will not be handed over to flydubai per Boeing’s schedule revision.

It’s not just flydubai who’s frustrated with Boeing: Emirates’ Tim Clark told Bloomberg he doesn’t expect Boeing’s 777X aircraft to enter commercial services before 2026, and that he “would not take kindly” to further delays caused by a growing backlog of orders. Both carriers have been resorting to retrofit programs in order to grapple with the delays.

#3- Is Russia expanding its dark fleet? Several companies — largely registered in the UAE — with alleged links to Russia have been acquiring dozens of LNG vessels as part of a plan by Moscow to expand its dark fleet operations, The Financial Times reports, citing shipping industry insiders. Since 2Q 2023, more than 50 LNG vessels have changed ownership to UAE-based companies, the outlet reported, citing Windward. The developments in the LNG tanker market could point “to a complex network of maritime operations potentially linked to Russian interests,” data and analytics group Kpler told the FT.

How do we know it’s Russia? The increased buying spree echoes a previous move by Moscow where it established a dark fleet of tankers to shuttle oil across the world in the face of Western sanctions, often using the UAE as a center for energy trades, the FT writes. The UAE-based firms also have vague ownership structures that are similar to those that operate Moscow’s dark fleet operations. The newly acquired LNG vessels are also now using routes traditionally used for transporting gas from Russia, and Kpler’s ship-tracking data showed one vessel loading LNG from Yamal, Russia’s flagship export hub.

Why now? As the US and Qatar increase their LNG production, the potential for market disturbances could decrease, and Russian projects like Yamal LNG could potentially come under sanctions. “The trade-off is simple. If the sanctions do not happen, they have their own fleet and use it, and if the sanctions do happen, they are not stuck and can continue their trade,” senior fellow at Carnegie Endowment for International Peace Sergey Vakulenko told FT.

MARKET WATCH-

#1- Oil prices steadied in early morning trading after dipping in two previous sessions as investors weigh up expectations of supply and demand, Reuters reports. Brent crude futures for September gained USD 0.02 settling at USD 82.42 a barrel by 03.20 GMT, while US West Texas Intermediate (WTI) futures for September dipped slightly to USD 78.38 a barrel.

#2- Industrial and logistics demand in Dubai rose 185% y-o-y in 1H 2024, logging almost 18 mn sqft of new requirements for industrial and logistics assets in the emirate, according to a report by global property consultant Knight Frank picked up by Construction Business News. The emirate saw increased interest from institutional investors from the US, China, and Europe, driven by globally attractive sector yields of around 8.3%.

Biggest sectors: The manufacturing and construction sectors comprised 11.7% and 11.1% of demand, followed by logistics, which made up 10.2%.

Rentals edged up: Jebel Ali Industrial (Grade B) logged the highest rental growth during the period at 38.5%, reaching AED 36 per sqft.

A shortage of new warehouses in Dubai sent demand spilling over to Abu Dhabi and Al Ain, with Abu Dhabi’s Kezad Group — representing 55% of UAE’s industrial supply — recording 88% occupancy in 1Q 2024. The warehouse also witnessed longer lease commitments, with the average lease length increasing to almost six years from four years in 2022.

More supply coming? Some 660k sqft of new supply is expected in Dubai in 2024, with an additional 1.3 mn sqft slated for handover in 2025.

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.