Good morning, nice people. We’re starting the week with a brisk read, though it’s certainly not void of important updates. Yes, regional disruptions are still impacting shipping flows in Hormuz, but some vessels have been spotted strutting the strait. Does this mean Hormuz is open? Well, not quite.

Plus: Israeli flows to Egypt from the Leviathan and Tamar gas fields have returned to pre-war levels — potentially giving the Egyptian government a bit of breathing room, given the LNG’s relatively lower price.

Watch this space

ENERGY — Flows from Israel’s Leviathan and Tamar gas fields to Egypt have returned to pre-war levels, with around 1.1 bcf/d passing through the East Mediterranean Gas pipeline, a government official tells EnterpriseAM. The restart of sizable exports to Egypt and Jordan comes just two days after Israel resumed production in the Leviathan gas field.

Why this matters: With global energy prices rising and LNG shipments in short supply — as Qatari flows remain blocked by the Strait of Hormuz closure — imports from Israel at comparatively lower prices give the government a little bit of breathing room, we’re told.

However, the additional pipeline supplies aren’t enough to eliminate the need for additional LNG. The Madbouly government is on track to order 20 LNG cargoes for April to bridge the gap between supply and demand and front-run expected higher prices ahead of summer, when seasonal demand is expected to come in about 7% higher than last year. Supply from Qatar, meanwhile, remains offline.

Despite the squeeze, industrial users and power plants have still been getting their full quotas, the official tells us. Coordination between the oil and electricity ministries, the presence of sufficient floating regasification units, and a strong existing relationship with foreign suppliers have helped the country support spot cargoes quickly, they added.

TRADE — Exim has made it easier for Egypt to import US LNG: The Export-Import Bank of the US (Exim) approved over USD 2 bn in export credit ins. to support US LNG shipments to Egypt through 2027, according to a statement out last week. The agreement backs contracts between the Egyptian General Petroleum Corporation and Hartree Partners.

The government has been angling to secure USD 11 bn in LNG across 130 shipments starting this June, two government sources told EnterpriseAM earlier this year. A government source in the oil sector had previously confirmed that Hartree Partners is among the players with whom the state plans to renew supply agreements.

SHIPPING — The US underwrites the route: The US has doubled its reins. for ships transiting Hormuz to USD 40 bn to lower “war risk” barriers for shippers. The US International Development Finance Corporation (DFC) expanded the program with insurers including AIG, Berkshire Hathaway, Travelers, Liberty Mutual Ins., Starr, CNA, and Chubb.

Upping the ante: The move builds on a USD 20 bn DFC program launched last month to revive shipping through the strait, but operators remain deterred by drone, missile, and naval mine risks — while the lack of naval escort protection continues to weigh on confidence.

Why it matters: The US has had to sweeten the pot because the strait’s disruption has driven up global energy prices, pushing US gasoline prices above USD 4 per gallon. Analysts say ins. costs and shipping activity are unlikely to normalize unless Iran’s military threat is reduced.

But there are other routes, courtesy of Saudi: The Kingdom’s East-West pipeline officially hit 100% capacity late last month at 7 mn bbl / d. This bypass is credited with preventing oil prices from hitting catastrophic highs. Meanwhile on land, Saudi Arabian Railways launched a new 1.7k km rail freight route last month, connecting the Eastern Province to the Jordanian border and the Red Sea to bypass the strait entirely for non-oil goods.

Market watch

Oil prices climbed this morning amid fears that regional disruptions could hit supply, Reuters reports. Brent crude futures gained USD 1.71 to trade at USD 110.74 / bbl by 00.57 GMT, while US West Texas Intermediate (WTI) increased USD 0.71 to USD 112.25 / bbl.

Meanwhile, Opec+ decided to boost oil output by 206k bbl / d for May, with Saudi Arabia alone contributing 62k bbl / d, according to a statement. The hike may only take effect on paper as key nations remain unable to raise production amid the US-Iran conflict, Reuters reports.

The move indicates a willingness to raise output once the Strait of Hormuz reopens, sources in the eight-member bloc told the newswire. The hike — which only amounts to 2% of the supply disrupted by Iran’s closure of the waterway — is expected to add “very few barrels to the market,” former Opec official Jorge Leon said.

The organization “expressed concern regarding attacks on energy infrastructure, noting that restoring damaged energy assets to full capacity is both costly and takes a long time, thereby affecting overall supply availability.”

The Baltic Index keeps the rally going: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — rose 1.8% to 2,066 points on Thursday. The capesize climbed 2.1% to 3,086 points, the panamax index rose 1.5% to 1,784, and the smaller supramax advanced 1.2% to 1,224 points.

The Drewry World Container Index was unchanged at USD 2,287 per 40-ft container last week, according to the latest index readings. The rise is driven by an increase across transpacific and Asia-Europe rates, especially Shanghai-Genoa (2%) and Shanghai-New York (1%), with spot rates expected to face fresh upward pressure in the coming weeks as rising bunker costs prompt carriers to roll out fuel surcharges.

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