Good morning, friends. It was only a brief reprieve as the two-week ceasefire is looking increasingly fragile by the hour, and we’re bracing for the uncertainty of what comes next. Let’s dive right in.

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The big logistics story abroad

Iran responded to an Israeli attack on Beirut, which threatened to unravel the two-week US-Iran ceasefire, by halting the passage of two oil tankers through the Strait of Hormuz. Tehran aims to impose tolls — to be paid with cryptocurrency — on oil tankers passing through the waterway, an Iranian official told the Financial Times. Ship-tracking data by Bloomberg showed the strait remained largely blocked as of yesterday. More than 800 vessels remain stuck in the Gulf.

Watch this space

M&A WATCH — DP World eyeing USD 13.2 bn stake in UK’s biggest port operator? A controlling 64% stake worth USD 13.2 bn in the UK’s largest port operator, Associated British Ports (ABP), is up for grabs, and DP World is reportedly interested, Bloomberg reports, citing people it says are familiar with the matter.

Currently, nothing is set in stone, and discussions are still underway. The likes of Brookfield Asset Management, KKR & Co, and BlackRock’s Global Infrastructure Partners are also reportedly interested in snapping up the stake from Canada Pension Plan Investment Board and Toronto-based Omers Administration Corp.

The target: As the UK’s largest port operator, ABP handles roughly a quarter of the UK’s maritime trade.

IN CONTEXT- DP World already operates two deepwater ports and freight rail terminals at Southampton and London Gateway, the latter of which it had previously committed to investing GBP 1 bn into.

DISRUPTION WATCH — Saudi’s lifeline under fire? Hours into the ceasefire announcement, the East-West pipeline — the Kingdom’s only way to move oil around the once-again closed Strait of Hormuz — was hit in a drone attack, according to unconfirmed reports from the Financial Times and Bloomberg. Neither Saudi officials nor local media have addressed the reports, and Aramco declined to comment on the matter when EnterpriseAM reached out.

REMEMBER- The Kingdom began rerouting crude exports to the Red Sea’s Yanbu port in early March to bypass the strait, and maxed out capacity on its East-West pipeline this week after pumping close to 5 mn bbl / d to the west coast. This helped KSA export around 50% of its normal oil volumes, but the pipeline shutting down — while Hormuz remains closed — could mean Saudi oil exports dropping to near zero.

SHIPPING — The US-Iran ceasefire has given shipowners and charterers a reason to start moving again, with operators inside the Gulf lining up departures as the two-week truce raises the prospect of Hormuz opening — even as the terms of safe passage and transit protocols remain unclear.

The backlog is the real story: More than 800 vessels have been stuck in the Middle East since late February, with the priority now likely to be clearing laden tankers out. At least one charterer was already looking to start pricing ballast voyages after the ceasefire announcement.

Why it matters: The ceasefire may create room for ships to move, but major operators are still treating Hormuz as a risk-managed corridor rather than a normal trade lane. Maersk said the truce may open some transit windows, but still lacks full maritime certainty and will keep decisions tied to updated risk assessments and official guidance.

PORTS — Iraq’s subsea tunnel at Grand Faw is moving toward launch. The Iraqi Transport Ministry said the tunnel will be inaugurated soon as part of the wider Grand Faw Port buildout. The submerged link is around 2.5 km long and sits inside an infrastructure package meant to connect the port more efficiently to Iraq’s inland road network.

AVIATION — Airspaces clear after ceasefire announcement: Iraq and Syria both moved to reopen their airspace and resume normal civil aviation activity after weeks of war-driven closures and severe disruption across the Middle East. The Iraqi Civil Aviation Authority said the country’s airspace and all of its airports had reopened effective immediately. Syria followed with its aviation authority restoring all previously closed air corridors and relaunching operations at Damascus International Airport.

Market watch

Oil prices rose slightly this morning as the ceasefire starts to look shaky, sparking fears about further bottlenecks at Hormuz, Reuters reports. Brent crude futures fell USD 1.96 to trade at USD 96.71 / bbl by 11.02 GMT, while US West Texas Intermediate (WTI) dropped USD 2.60 to USD 97.01 / bbl.

The Baltic Index continues to rise: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — was up 2.1% to 2,139 on Wednesday.

Data point

38.7 — that’s the headline seasonally adjusted purchasing managers’ index (PMI) for Qatar in March, according to the latest S&P Global Qatar PMI (pdf). The reading marks a dramatic decoupling from February’s 50.6, signaling the most severe deterioration in non-energy private sector conditions since the height of the pandemic in May 2020. While the index has hovered near the 50.0 “no-change” mark for months, the outbreak of the US-Iran war has triggered an immediate and historic contraction.

The breakdown: New business inflows collapsed at a survey-record pace in March, with 64% of firms reporting a drop in orders as regional instability froze spending. This drove the fastest output contraction in nearly six years and a deterioration in purchasing activity not seen since the 2020 lockdowns. While employment saw marginal growth, the rate of hiring slowed to a 19-month low.

Margins are under fire: Input cost inflation hit a 15-month high, even as firms faced a sharp drop in inventories amid the slowdown. Companies are caught in a classic squeeze as rising purchase prices and high wage inflation — although slower in March — are colliding with a marketplace where activity is slowing at a historic rate.

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