Good morning, folks. It’s a busy start to the week in the regional logistics sector with news flowing in fast across all parts of the industry. There’s a mixed bag of ports, aviation and rail updates this morning from Morocco, the UAE, and Saudi’s sovereign wealth fund the PIF. Let’s jump right in.

WATCH THIS SPACE-

#1- SAR expands North Train line to boost mining: Saudi Arabia Railways (SAR) is expanding its North Train freight line at a cost of SAR 5 bn, Saudi Transport Minister Saleh Al Jasser announced at the Supply Chain and Logistics Conference. The expansion aims to strengthen the connection between the Kingdom’s rail networks and east coast ports to support its growing mining sector.

ALSO- The Kingdom is currently developing 18 logistics hubs with SAR 10 bn in investments, Arab News reports, citing unnamed senior officials. The Kingdom plans to increase the number of logistics zones to 59, up from 22 by 2030, Al Jasser said at the conference.

#2- London-based Gulfsands Petroleum is calling for changes to Syria’s sanctions to allow foreign oil companies to return to business and help boost oil production, Managing Director John Bell told the Financial Times. The country’s overall oil production has fallen from 400k b/d in 2011 to 80k b/d, he added. Gulfsands, which operates in a region controlled by the Syrian Democratic Forces, hasn’t received revenue from Syria since sanctions were imposed back in 2011. The company’s oil production stood at 20k b/d pre-sanctions. Other global companies including Shell and Total also suspended operations in Syria, but did not disclose whether they would be resuming operations in the country again.

#3- Exxon Mobil is putting forward a five-year plan to expand output and increase earnings by USD 20 bn by 2030, on top of projected earnings of USD 34.2 bn this year, Reuters reported on Friday, citing comments made by CEO Darren Woods at a media briefing. The oil producer wants to boost oil and gas output by 18% to 5.4 mn barrels per day and increase annual spending between USD 28 bn to USD 33 bn between 2026 and 2030. The new targets come on the heels of Exxon’s Guyana high-profit generating operations, its US shale business, and its increased project spending which is projected to “generate returns of more than 30% over the life of its investments,” Woods said.

#4- Qatar Airways is reportedly seeking to replace the Boeing the 25 737-10 aircraft currently on order with smaller 737-8s due to the model no longer meeting its requirements, Bloomberg reported on Friday, citing people with knowledge of the negotiation. Qatar airways would likely pass the 737-8s to Rwanda Air and Virgin Australia for use, the sources said. The move comes on the back of Qatar Airways’ reconciliation with Airbus back in March, reinstating its order of 50 A321 jets, making its order of the Boeing 737-10 now redundant.

Airbus on the mind: Qatar Airways was reportedly thinking about acquiring Airbus A330s formerly owned by American Airlines’ (AA) on the back of aircraft delivery delays, including Boeing’s latest postponement of 777X deliveries.

Boeing’s order book woes are in Airbus’ favor, “the declining demand of plane orders by airlines for Boeing aircrafts might just get directed towards Airbus instead, and doesn’t just disappear,” chief economist at Revelio Labs, Lisa Simon, told CNN back in March. Airbus delivered some 735 aircraft in 2023, far ahead of Boeing’s 480, solidifying its title as the world’s largest plane manufacturer for the fifth straight year, and casting doubt on whether the commercial aircraft market is still characterized by the long-running Boeing-Airbus duopoly.

#5- The European Commission approves Adnoc’s acquisition of Navig8: The European Commission has approved Adnoc Logistics and Services’ acquisition of an 80% stake in Navig8 and its subsidiary, Integr8, for USD 1 bn, with a deferred payment for the remaining 20% in 2027, according to a statement.

Background: Adnoc agreed to acquire an 80% stake in Navig8 last June, pending regulatory approvals. The acquisition will boost Adnoc L&S’ services portfolio to include bunker trading, pooling and other services, as well as expand its presence to new locations. Navig8 will retain joint control over its subsidiary, Integr8 Fuels, until June 2027, Offshore Energy reports.

MARKET WATCH-

#1- Oil prices dipped in early morning trading as investors await the outcome of a Fed meeting later this week and the possibility of further cuts to interest rates, Reuters reports. Brent crude futures slipped USD 0.21 to USD 74.28 a barrel by GMT 04.24, while US West Texas Intermediate (WTI) dropped USD 0.40 to USD 70.99 a barrel.

#2- Global oil markets are destined to be oversupplied in 2025 based on expected supply and demand levels, despite Opec’s plans to delay output hikes to 2Q 2025, according to the International Energy Agency’s (IEA) oil market report. A lifting of production cuts in April 2025 will still lead to an oversupply of 1.4 mn bbl / d, though the IEA is assuming a 950k bbl / d overhang even if Opec+ does not commit to this timeline.

The breakdown: These expectations are based on a predicted global consumption level of 103.9 mn bbl / d in 2025, compared to an anticipated supply of 104.8 mn bbl / d, even if Opec+ delayed or scrapped plans to phase out cuts. Meanwhile, non-Opec+ supply will increase by 1.5 mn bbl / d next year, led by the United States, Brazil, Guyana, Canada and Argentina.

ICYMI- Opec slashed this year’s oil demand growth forecast by 210k bbl / d to 1.6 mn bbl / d, after accounting for “recently received bearish data for 3Q 24.”

#3- Baltic index dips once again: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 0.4% to 1,051 points on Friday, driven by lower rates across smaller vessels. The capesize index rose 11 points to 1,263 points, while the panamax index dipped 25 points to 995 points. The smaller supramax index eased 2 points to 959 points.

#4- The Drewry World Container Index remained steady at USD 3,529 per 40-ft container on Thursday, according to the latest index readings. Spot rates for 40-ft containers are now 66% below the previous pandemic peak, but remain 148% above the pre-pandemic rate of USD 1.4k. The average composite index YTD is USD 3,949 per 40ft container, which is USD 1,091 higher than the 10-year average rate of USD 2,858

#5- LNG freight rates drop amid oversupply of vessels: Charter rates for ships carrying LNG have fallen by c. 80% since the summer — the lowest on record, as the sector faces an overproduction of ships due to Europe’s energy crisis two years ago, Financial Times reported on Saturday. Around 650 LNG carriers were in operations as of last year, with 68 vessels added by the end of 2024, and another 88 vessels due in 2025, according to International Gas Union and Flex LNG

Rates for older and steam-run turbine vessels have decreased, “the earnings, once elements such as operational costs are deducted, are in a lot of cases negative or near zero,” a broker told Financial Times. This could lead to a period of readjustment in the industry, by getting rid of the old ships as shipowners will not be able to cover their costs.

#6- Fitch Ratings has upgraded its 2025 outlook for global container shipping from ‘deteriorating’ to ‘stable’ on the back of improvements in tankers and bulk sectors, according to a statement released last week. The rating agency is expecting stability for tankers and dry bulk, with a solid performance for tankers. Container shipping is projected to reach an oversupply in the upcoming year driven by new vessel deliveries, which will likely help in reducing freight rates.

Shipping giant Maersk expects global container market volumes to grow between 5% and 7% in 2025, pushed up by strong demand from the US due to looming trade tariffs and potential US East Coast and Gulf Coast port strikes, North America President Charles van der Steene told Reuters last week. “Resilient” demand from US firms and the continued rerouting of vessels to avoid the Red Sea are driving up container demand, he added. “We’re [in] discussions with our customers as to how they can prepare for … what will likely be another year of disruption and the need for supply chain resilience,” Van der Steene told CNBC on Friday.

#7- Diesel prices likely to see a bump in 2025 amid refinery closures: The global diesel market is expected to find price support in 2025 on the back of the closure of c.1% of refining capacity, which should offset the market’s current weak demand as the world turns to cleaner fuels, Reuters reported on Thursday, citing unnamed traders and analysts.

The outlook: Some 1 mn barrels per day of refining capacity in Europe and the United States is projected to close permanently next year due to low profits, even as global demand is expected to see a modest increase, according to Reuters calculations. “For 2025, we are constructive on European diesel prices due to the capacity closures, still low forward margins that will keep utilisation levels relatively low, and a slight rebound in demand,” Energy Aspects analyst Natalia Losada said.

JP Morgan expects European diesel margins to trade at c.USD 17-19 a barrel next year, increasing to USD 21 in 2026 as refinery shutdowns surpass the level of decrease in demand. It expects US margins to remain stable, averaging USD 25 in 2025 and USD 28 in 2026.

DATA POINT-

Oman’s ports see growth in trade: Oman’s total volume of exports and imports reached over OMR 11.4 bn (c. USD 29.6 bn) in 3Q 2024, with Sohar Port’s total volume of goods standing at OMAR 5.6 bn during the same period, Oman Daily reported on Thursday. Khasab, Duqm, and Salalah ports also contributed to the numbers, with Khasab representing the largest volume in re-exports. Recent upgrades, such as the development of Al Suwaiq Port, are set to enhance the country’s logistics and food import capacity.

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CIRCLE YOUR CALENDAR-

Switzerland will host the World Economic Forum Annual Meeting from Monday, 20 January to Friday, 24 December in Davos. The conference — under the theme Collaboration for the Intelligent Age — will gather global leaders to address geopolitical shocks and stimulate growth across five thematic priorities; rebuilding trust, reimagining growth, investing in people, safeguarding the planet, and industries in the intelligent age.

Belgium will host the World Cargo Summit from Monday, 27 January to Wednesday, 29 January in Ostend. The event will focus on air cargo economics, strategy, and market trends with a specific focus on how the industry will tackle disruptions and how firms can adapt their business models.

The UAE will host the ShipTek International Conference from Wednesday, 29 January to Thursday 39 January in Dubai. The two-day conference will gather industry experts, including managing director at Hapag-Lloyd Carolin Stumm, CEO Adani Ports Nicolai Friis, VP International Maritime Industries Justin Taylor, CEO Tristra Tim Coffin, and others to discuss new tech and developments in the maritime industry.

The UAE will host the Middle East Bunkering Convention from Monday, 3 February to Wednesday, 5 February in Dubai. The event will focus on the marine fuels sector to address the future of the industry in light of geopolitical issues, environmental regulation, and the future of artificial intelligence and digitalization.

Saudi Arabia will host the Airport Expansion Conference from Tuesday, 4 February to Wednesday, 5 February in Riyadh. The two-day conference will feature over 30 speakers to discuss challenges faced by Saudi Airports and highlight Saudi Arabia’s Vision 2030 with a clear focus on expansion, tech, and strategic partnerships.

The UAE will host the Middle East Breakbulk Conference from Monday, 10 February to Tuesday, 11 February in Dubai. The event gathers giant manufacturers, EPCs, and service providers to discuss the latest solutions in breakbulk and heavy-lift logistics across the Middle East and Africa. The two-day event features an artificial intelligence (AI) seminar, heavy lift workshop, chartering workshop, and a women in breakbulk panel.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

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