Iran picks which ships can and can’t enter Strait of Hormuz

Iran is moving to turn its effective shutdown of the Strait of Hormuz into regulating passage of ships from selected countries through the strategic waterway.

Traffic through the Gulf channel has climbed to its highest level in weeks as more countries and shipping firms secure passage agreements with Iran, Bloomberg reports. 

Liquefied petroleum gas carriers and tankers linked to countries including India have been among the most active, with ships transiting under negotiated arrangements as Tehran permits carefully vetted cargoes to move.

Malaysia-linked and Iraqi crude shipments are also moving, including a Petronas-chartered tanker carrying about 1 million barrels, after Tehran granted exemptions or toll-free passage following diplomatic engagement. At the same time, Japanese, French and vessels from selected other countries have crossed along carefully managed routes.

Governments from the UAE and India to the Philippines, meanwhile, are bracing for fallout in the coming days when the deadline U.S. President Donald Trump set for Iran to open the Strait of Hormuz expires. 

Trump said U.S. forces would destroy Iranian power plants and bridges if Iran fails to comply with his ultimatum by 8 p.m. Washington on Tuesday – 3:30 a.m. Wednesday in Tehran. Iranian officials say they won’t obey Trump and have promised to respond with attacks on power plants in Israel and Arab states allied with the U.S.

The shutdown of the Strait of Hormuz is threatening income flows to the Philippines by disrupting economic activity across Gulf states where more than 2 million Filipino workers are employed. As companies cut operations, transfers sent home through banks and exchange agencies have been slowing, putting pressure on household incomes in a country where remittances account for roughly 10% of GDP.

At the same time, the disruption is hitting India’s fertilizer supply chain, which depends heavily on Gulf exports of urea and ammonia that move through Hormuz during the peak planting season. With shipments delayed or halted, Indian importers face tighter supplies and rising costs, raising the risk of lower yields and higher food prices in the months ahead.

Saudi sovereign fund mulls LIV Golf’s future after $5B in losses

After pouring nearly $5 billion into its upstart LIV Golf tournament, Saudi Arabia’s Public Investment Fund is facing questions about whether its high-stakes confrontation with the PGA was worth it.

Inside the $925 billion sovereign wealth fund, senior officials are reflecting on nearly four years of sparse attendance, lower-than-expected TV ratings and sagging global influence as they make decisions on whether to keep financing LIV, Bloomberg reports.

The PIF, which is led by Aramco Chairman and golf enthusiast Yasir al-Rumayyan, rattled the PGA when it signed some of the sport’s biggest names with nine-figure contracts, including Phil Mickelson, Jon Rahm, Bryson DeChambeau, and Dustin Johnson.

U.S. President Donald Trump is one of LIV’s biggest fans and hosted several of its tournaments at his golf resorts in New Jersey, Virginia and Florida.

Since its splashy first year, competitive pressure from the Tour has intensified with moves such as a “Returning Member Program,” which lured Brooks Koepka back to the PGA fold under the threat of heavy financial penalties.

Attempts to merge the LIV with the PGA have faltered, meanwhile, leaving the Saudi backers to carry continued operational losses and come up with a formula for reviving the league or pulling the plug.

All eyes on Aramco as world’s top oil company set to alter dividend

Investors around the world are watching Saudi Aramco, which is scheduled to announce changes on Tuesday to the way its $124 billion annual dividend gets paid out.

Two scenarios are being considered as the kingdom tries to address its weakened finances, Bloomberg reports.

Aramco, the world’s biggest oil company, could continue some elevated payments and let its balance sheet take the increasing pain. On the other hand, it could cut distribution of the dividend and risk widening the Saudi budget deficit.

The company’s action would also affect debt issuances by Saudi Arabia, whose nearly $15 billion in bond sales this year make it the biggest borrower in emerging markets, the news agency said.

Crude sales and Aramco’s large annual payouts are central to funding Crown Prince Mohammed bin Salman’s Vision 2030 economic transformation plan. The level of the dividend’s distribution, however, has grown beyond the company’s earnings and dried up the $27 billion in net cash it had just over a year ago.

Aramco’s net income has declined year-on-year for seven consecutive quarters, and analysts are forecasting another drop in the fourth quarter. The company’s shares have declined 3% this year.

Etihad Airways moves ahead with plans for a possible IPO

Etihad Airways is moving ahead with plans for a possible IPO, the first for a major airline in the Middle East, CEO Antonoaldo Neves said in an interview with Bloomberg.

The potential listing comes amid booming demand for air travel globally.

Airlines have raised their profit forecast to $30.5 billion this year as passenger count is expected to reach a record 5 billion, the International Air Transport Association said during its annual meeting, which wraps up in Dubai today.

Middle East carriers are faring particularly well, set to earn a net profit of $3.8 billion this year, up from $3.1 billion last year, according to the IATA.

Profit per passenger is among the highest in the world, netting $15.20 compared to the global average of $6.

Etihad, which has already recruited more than 1,000 cabin attendants this year, announced this week it is looking to add another 1,000 crew members.

The UAE flag carrier will host recruitment drives from June until the end of the year in 19 locations, including Athens, Vienna, Singapore, Cape Town, Colombo and Jaipur.

UAE likely to hit oil capacity target one year early

The UAE is likely to achieve its full oil capacity target of 5 million barrels a day more than a year earlier than expected, Bloomberg reports.

ADNOC, the state-owned oil company, is on course to reach the threshold by the end of next year or early 2026, which is ahead of the 2027 goal the company had set, according to people with knowledge of the operations.

The higher capacity will be a potential source of tension as OPEC+ debates new production quotas later this year, the news agency said.

OPEC and its partners have been restricting output for years to shore up the market and raise prices.

The UAE – which said this month that it had raised capacity from last year’s level – has been eager to use some of its spare volume, according to Bloomberg.

The country has occasionally clashed with Saudi Arabia on the issue, risking a split among the group three years ago, before a compromise was found.

Abu Dhabi’s IHC reportedly mulling IPO for 2PointZero

Abu Dhabi’s largest listed company, International Holding Co., is planning to hold an IPO next year for its new 2PointZero subsidiary, IHC’s CEO Syed Basar Shuebis said in a Bloomberg interview.

Shuebis put the value of the firm, which has interests ranging from financial services to mining, at “north of 100 billion dirhams ($27 billion).”

IHC, which is listed on the Abu Dhabi Securities Exchange (ADX), is chaired by Sheikh Tahnoon bin Zayed, a brother of the UAE’s President and the country’s National Security Adviser.

Mariam Almheiri, the UAE’s former Minister of Climate Change and Environment, was named as 2PointZero’s CEO earlier this year.