Did You Know That…

 

…Chinese VLCC granted Houthi passage as militia tightens Saudi blockade.

• Cosco Shipping’s VLCC Xin Long Yang has secured Houthi clearance to transit the Bab el Mandeb strait after two U-turns in the Red Sea

• Chinese tankers returning from Yanbu could negotiate passage on a case-by-case basis, although vessels heading to load remain in a holding pattern

• Expected transit comes as Houthis claimed to have attacked two Saudi tankers earlier today, escalating from blockade to direct military strikes.

Chinese vessels appear to retain partial safe passage through Houthi-controlled waters even as militia strikes Saudi tankers.

…The Panama Canal is growing more important. And the challenges to it are getting more acute. When Donald Trump’s war with Iran first closed the Strait of Hormuz this year, the effects were felt swiftly on the other side of the world. Demand for passage through the Panama Canal, the 80km waterway linking the Atlantic and Pacific Oceans, shot up to near its maximum capacity of 36 to 40 transits a day. The number of ships carrying fuel through the canal rose sharply as countries turned to American energy. The number of liquefied-natural-gas (LNG) cargoes transiting almost doubled in April, compared with the same month last year. The Panama Canal carries just 5-6% of world maritime trade. That is less than some other chokepoints, such as the Strait of Malacca near Singapore. Yet its importance is growing, both because of the Middle East war and because of enduring changes to flows of goods and energy. This could be a boon to the country of 4.6m people that hosts it, but only if it can avoid becoming a pawn in the rivalry between China and the United States. The goods that pass along the canal run the gamut, from toys to cars, fertilizers to fruit. But its significance as a route for energy shipments is especially striking, largely due to the United States’ rise as an exporter of LNG and liquefied petroleum gas (LPG). The canal built the infrastructure needed to accept this traffic in 2016. It currently moves around 1m barrels of LPG a day, much of it travelling from the Gulf Coast to petrochemical plants in Asia.

…Brussels proposes extending ETS to smaller ships, reserves billions for green shipping.

• Ships 400 gt and above would be subject to revised ETS

• 110m ETS allowances reserved for green shipping, MRV reporting simplified

• Avoidance of double-taxation if a global IMO measure is adopted, but no outright promise to remove the ETS.

The European Commission’s plan to overhaul the Emissions Trading System from 2030 would earmark billions for shipping decarbonisation and include more neighbouring ports to stop evasive call.

…Gulf states race to make Hormuz less relevant.

• Gulf states are fast-tracking pipelines, export terminals and logistics corridors to reduce reliance on the Strait of Hormuz after the latest disruption exposed the region’s vulnerability to geopolitical conflict.

• Existing alternatives such as the UAE’s Fujairah pipeline and Saudi Arabia’s East-West Pipeline are gaining strategic importance, while new projects could eventually divert more than 10m barrels per day from Hormuz.

• The shift could redraw Middle East energy trade, boosting ports including Fujairah, Yanbu and Sohar, while creating longer-term challenges for tanker markets as more crude moves through overland infrastructure.

The latest Iran-Hormuz crisis has accelerated gulf states’ efforts to build pipelines, ports and rail links that bypass the world’s most important oil chokepoint, reshaping regional trade flows and potentially altering tanker demand for decades.

…SCFI falls again as peak season appears to have peaked.

• SCFI global composite is down 7% vs the high reached two weeks ago, but is still up 87% year on year

• WCI global composite dips 2% versus last week but is still up 75% year on year

• Financial disclosures by Asian carriers show that rate upside began boosting revenue in the second quarter, particularly in June.

The good news for ocean carriers is that spot rates remain exceptionally high, despite the recent pullback, implying strong profits for the current quarter.

…Green Freight Logistics, our esteemed member in Vietnam has opened their Hai Phong office. Please join me in congratulating Ms. Hien Tran and her team with this milestone for their enterprise.

…The first four months of 2026 has seen Argentina export 209 agro-industrial products with year-on-year growth, totaling 29.67M tons in volume and generating US$11.318BN in export revenue. The range of products which experienced significant increases in export volumes include sunflower seeds (up 1,366%), dried shelled black beans (up 865%), cotton yarn (up 863%), dried beans (up 381%), sesame (up 190%), stemmed tobacco (up 132%), butter (up 109%) as well as other forage products, pork & pork products, honey, wheat, lemons, sunflower oil and more.

…China’s shadowy maritime militia is worryingly active. Big new formations north of Taiwan suggest officials are testing out its capabilities. The bays of the Zhoushan archipelago are crammed with blue-hulled fishing boats, laid up after a busy season scouring the East China Sea for crabs and croaker. Some of the boats, though, have been doing more than just fishing. In December over 1,000 vessels from Zhoushan and other parts of China’s eastern seaboard did something unprecedented. They lined up to form an L shape in the seas north of Taiwan, held the formation for more than 12 hours, then dispersed. Over the next few months Chinese fishing boats coalesced again in the East China Sea, on four more occasions. Chinese state-run media claim all this is normal commercial activity. Something fishier is surely going on. China is unusual in having three separate maritime forces at its disposal. The first two are the navy and the coastguard. But since as far back as the 1950s, China’s leaders have also commandeered part of the country’s fishing fleet as a paramilitary “maritime militia”. This shadowy force is made up of a mixture of normal fishing boats and larger, steel-hulled ones which appear to be purpose-built for aggressive maneuvers. It is notorious for its activities in the South China Sea, where militia boats are often sent to disputed reefs and islets to secure China’s sovereignty claims, sometimes violently. Fishing boats in the East China Sea had largely stuck to trawling. That may be changing. The recent formations there were far larger than anything seen before, even in the South China Sea, so it seems likely they brought together many ordinary fishing boats alongside formal militiamen. They were packed densely enough that some cargo ships appeared to change course to go around them. The maneuvers suggest Chinese officials are testing out their capabilities—and some fear that could give China an edge in a conflict over Taiwan.

…China’s economy grew by 4.3% in the second quarter, year on year.

…The AI boom powered ASML to another bumper quarter. The Dutch maker of lithography machines used to produce high-end chips recorded a 21% jump in sales, year on year, to $10.7bn and raised its annual outlook. TSMC, the world’s biggest contract-manufacturer of chips, reported a 77% rise in net profit and lifted its revenue projections.

…Electric aviation is taking off. Hybrids, rather than fully electric planes, are likely to triumph. TAXIING TOWARDS the runway, the propeller stops turning as your correspondent pulls the throttle back to await take-off. On a single-engine light aircraft, that is usually a worrying sign of engine failure. Yet this plane is powered by an electric motor and, just as when you come to a halt in a Tesla, the motor stops until it is needed again. On advancing the throttle the propeller springs back to life and the aircraft is soon briskly climbing, in an eerily quiet manner. The two-seater Pipistrel Velis Electro is the first electric aircraft to be certified for pilot training. Besides its low noise, it has other unusual features. Instead of the lengthy series of engine checks a combustion-engine plane requires before take-off, the Electro is ready to go with the flick of four switches. Since it has few moving parts, it is also cheaper to maintain. And without directly producing any nasty emissions it can claim to be green, especially if recharged with renewable power. Topping up the battery takes just over an hour.

…DP World plans new terminals to bypass Strait of Hormuz. The project will feature a container terminal and general cargo terminal. When complete, the container terminal will be able to handle up to 2.5m teu per year, crucially on the UAE’s east coast on the Gulf of Oman.

…SpaceX’s stock slipped below $135 it was listed at in initial public offering on June 12th. More than $11trn has been wiped off the company’s market value since the share price hit a peak in mid-June.

…Border controls between Gibraltar, a British overseas territory, and Spain were abolished.

… Difficult roads often lead to beautiful destinations.”

 

Have a great weekend!

 

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