Good morning, friends. It feels like we’ve taken a time machine and traveled back a few months, with the first missile alert in over a month arriving on our phones yesterday afternoon. The Defense Ministry later confirmed it detected two ballistic missiles launched from Iran, both of which fell into the sea.

In response, the UAE halted all trade and financial transactions with Iran, citing escalations that undermine regional peace.

That, along with the uncertainty over the future of the US-Iran conflict (with no ceasefire renewal and no talks scheduled), is fueling anxiety, especially as we approach back-to-school season in two weeks.

In other disappointing news this morning, we’ve had another major event cancelation: OFFLIMITS festival, which was taking place in Abu Dhabi in November, has been canceled. Organizers gave no reason for the cancellation but said they hope to return in 2027, according to the event’s website. The festival had been set to bring Shakira, the Jonas Brothers, and Ne-Yo, and had already been delayed from April due to the conflict.

Meanwhile, Dubai’s hospitality sector is still reeling from the uncertainty and the usual summer lull, though Cavendish Maxwell expects recovery to begin in 4Q 2026.

Abu Dhabi’s investment machine is still running at full speed despite everything, with Mubadala subsidiary Abu Dhabi Investment Council making another USD 1 bn investment in a hedge fund.

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AD Ports’ tender clock starts

AD Ports’ minority shareholders now have until 3pm on 15 September to tender their shares to ADQ, after the L’imad subsidiary submitted a formal offer of AED 6.25 per share for the 24.58% stake it does not already own, according to the offer document (pdf).

REFRESHER- We reported yesterday that the offer values AD Ports at around AED 31.8 bn and would cost ADQ roughly AED 7.8 bn to buy the remaining stake, according to our math. The move follows L’imad’s recent Taqa takeover and points to a broader push to bring strategic capital-intensive platforms fully under its control.

What to watch for: AD Ports’ board is due to meet this Friday, 21 August, to review the offer. Offer results are expected on 16 September, unless the acceptance period is extended. The key question is how many minority investors choose to lock in the 23% premium now, versus staying exposed to a growth story L’imad says is capital-intensive, long-term, and potentially heavier on leverage.

ADVISORS- Rothschild & Co Middle East is financial adviser to ADQ, while Allen Overy Shearman Sterling is providing counsel. Emirates NBD Capital and FAB are joint lead managers, EFG Hermes UAE is co-lead manager, and Emirates NBD Bank and FAB are joint lead receiving banks.

Iran claims UAE-linked tanker detained at Hormuz

Iran’s Islamic Revolutionary Guard Corps (IRGC) has allegedly detained a UAE-linked oil tanker while it was transiting the Strait of Hormuz, claiming the vessel refused to use Iran’s designated northern route and failed to pay transit service fees, Iranian state news agency Fars said on X.

The claim is unverified, and Fars has not named the tanker or its owner. Bloomberg has reported that a Liberian-flagged tanker operated by UAE-based Superfleet sailed empty into the Arabian Gulf on Monday before making at least five U-turns and coming to a standstill near Iran’s Qeshm Island.

REMEMBER- The Strait of Hormuz is growing quieter by the day, with just five commodity vessels crossing the strait on Saturday, and none passing through on Sunday, versus 31 over the previous weekend. Adnoc had reportedly been moving tankers through the strait in dark mode by switching off transponders, and has been a major user of “shuttle trade” — where crude is moved out of the Gulf and transferred between vessels in the Gulf of Oman to help maintain exports while reducing exposure to Hormuz. Three of its tankers came under attack in the past week, and the end of the US and Iran’s ceasefire agreement on Monday is keeping shipowners and charterers even more wary.

Aramco’s Fujairah workaround

Fujairah is becoming a critical staging point for Gulf crude exports as prolonged Hormuz disruptions force producers to find alternative routes to Asian buyers, Reuters reports. Saudi Aramco is in talks with Asian refiners to supply Arab Medium and Arab Heavy crude through ship-to-ship transfers off Fujairah, mirroring Adnoc’s strategy. It has also redirected Arab Light to Saudi Arabia’s Red Sea port of Yanbu and offered cargoes from Egypt’s Sidi Kerir after Red Sea tensions, allowing Asian customers to receive cargoes without sending their own tankers through the high-risk chokepoint.

Adnoc has already sold more than 100 mn barrels through tenders, using arrangements that allow buyers to receive Gulf crude without sending their own tankers through the strait.

They’re not the only ones rerouting: Two of China's biggest state shippers have simply stopped sailing the risk zone. Cosco Shipping Energy Transportation and China Merchants Energy Shipping loaded crude via ship-to-ship transfer at Fujairah in July, per Vortexa, and about a dozen more from each carrier are booked to load outside the Gulf between now and mid-September — mostly at Fujairah and near Omani ports, chartered largely by Chinese refiners, Reuters reports. The two companies — which run more than 100 VLCCs between them and normally carry roughly half of China's Middle East crude imports — have kept tankers outside both Hormuz and Bab Al Mandab amid security concerns.

UAE-EU trade talks still on track

The UAE and European Union are pushing to wrap up their trade agreement this year, with the conflict making the case for closer economic ties stronger, EU ambassador to the UAE Lucie Berger said, according to a press release from the EU Delegation to the UAE.

“We haven't been derailed by the geopolitical shifts in the region,” Berger said. “On the contrary, I think we are even more serious about concluding the agreement.” The two sides have completed six rounds of negotiations, an unusually rapid pace for the EU, which, Berger said, has historically taken one to two decades to negotiate trade agreements.

The UAE is the bloc’s largest export destination and investment partner in the region, with bilateral goods trade estimated at EUR 57 bn (USD 67 bn). The trade agreement would be the EU’s first with a Gulf country.

REMEMBER- Just last month, UAE Foreign Trade Minister Thani Al Zeyoudi flagged a slow rate of progress on the comprehensive economic partnership agreement talks with the bloc. The delay, according to analysts we spoke to, has been attributed to a heavier agenda on the table, spanning services, investment, digital trade, energy, procurement, and sustainable development.

Has KSA tightened oversight of UAE transfers?

The Saudi Central Bank (Sama) reportedly placed financial transfers to the UAE under additional scrutiny, unnamed sources told Reuters. The UAE is reportedly among more than half a dozen countries in the region deemed high-risk for financial crimes by Sama.

What’s going on? The central bank reportedly notified major banks earlier this year to apply such measures to settlements with the UAE. Several executives told the newswire that Saudi banks delayed or returned transfers in various currencies without providing an official explanation. A banking source had also told EnterpriseAM last month that some payments from banks in Saudi Arabia to accounts in the UAE have been delayed, returned, or blocked outright since at least May, confirming reports first picked up by the Financial Times and Bloomberg.

Some Saudi clients have asked UAE-based firms to relocate operations elsewhere entirely. The head of a Dubai-based consultancy told Reuters that some of his Saudi clients were struggling to pay him — and had suggested he do just that. Other companies said local authorities had asked them not to do business with UAE-based firms.

BUT- The official line, on both sides, is that there’s no story. Sama denied the presence of restrictions on specific countries, and a UAE official also told Reuters that the Economy Ministry received no reports from firms about facing such difficulties.

Background: The UAE and the Kingdom have had conflicting views over oil quotas and geopolitical influence and have competed for foreign capital and talent for the past couple of years. The rift later reached a boiling point over tensions over Yemen in December and was not helped by Abu Dhabi’s April exit from Opec.

Gulf oil looks east

The UAE and Saudi Arabia want to expand oil reserves outside the conflict-prone region, with each engaging in talks to expand reserves in Japan and South Korea, the New York Times reports, citing unnamed sources. Both nations asked Tokyo to increase their crude storage in Japan tenfold from the current 8 mn barrels each. Talks continue on final volumes and cost-sharing, with joint stockpiles expected to grow markedly.

The problem? The requested volumes likely exceed Japan’s storage capacity and face logistical challenges, the sources said. Since the East Asian country imports almost all its fossil fuels — with 90% of crude sourced from MENA — the proposed move will help stave off supply disruptions, but will limit capacity for domestic refiners and national reserves.

A trick from the old playbook: Last May, the UAE expanded its joint crude oil stockpiles in Japan, which relies on Abu Dhabi for about 40% of its crude imports — both countries already operate joint crude storage facilities under a longstanding agreement. Abu Dhabi also arranged to store more than 6 mn barrels of crude in South Korea in March.

A third hedge, for good measure: Earlier this year, Adnoc agreed to increase its crude storage presence in India to as much as 30 mn barrels — nearly triple the roughly 11 mn barrels-equivalent it already leases there through India’s strategic reserve system.

PSA

WEATHER- The mercury tops out at 44°C in Abu Dhabi and 43°C in Dubai — although it will feel closer to 48°C — with lows of 33-34°C in both emirates, according to our favorite weather app.

The big story abroad

In the absence of a major development in the regional war, the global press has set its sights on a number of stories. Here are the most notable headlines.

A bond yield problem: Sovereign borrowing rates are surging across the globe, with yields on 30-year US Treasuries reaching their highest levels since 2007 this week — rates in France, Germany, the UK, and Japan have also risen dramatically in recent days. A confluence of factors — largely Washington’s Iran offensive and tariff campaign — is pushing debt in developed countries to unsustainable levels.

Ottawa in the tariff target: Canada is bracing for a salvo of US tariffs on USD 20 bn worth of exports, while US President Donald Trump is reportedly mulling a last-minute agreement to avert the duties. After rounds of talks, the White House called on Canada to scrap its retaliatory auto tariffs and provincial liquor bans, while Ottawa angled to lower duties on automobiles. The tariffs are due to come into effect at midnight Eastern Daylight Time.

And in the AI world: Anthropic’s pre-IPO revolving credit facility is set to rise above its roughly USD 10 bn target, as Wall Street banks line up to lend massive sums to signal confidence and clinch a slice of one of the largest tech IPOs in history. The terms are still under negotiation, and the company could choose to cap or reduce the credit line.

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