AGP Executive Report

Hormuz Crisis: Iran’s attacks on shipping have sunk two vessels and driven oil exports lower, renewing pressure on global supplies. The IEA warns diesel could remain tight, while the IMF expects conflict-hit oil exporters to contract in 2026 before rebounding next year. Saudi Security: Houthi strikes damaged an administrative building at Aramco’s headquarters, with the group threatening further attacks on oil facilities. Iraq’s prime minister told Riyadh he would prevent attacks on Saudi Arabia being launched from Iraqi territory. US-Iran Escalation: The US military has reportedly drawn up options to use its largest non-nuclear bomb against Iranian energy and nuclear sites if President Trump orders renewed strikes; its use is not approved, and officials question its effectiveness. Supply: UAE oil output reached a record 5.3 million barrels a day in September, but fresh Hormuz attacks cloud the outlook for the Gulf’s recovery in exports. Energy Links: Azerbaijan gas and Qatari investment are helping rebuild Syria’s gas connections, including a pipeline route toward Türkiye.

Saudi Energy Under Fire: Houthis claimed missile and drone strikes on Aramco sites and Riyadh’s airport, vowing more attacks. Saudi Arabia reported intercepting missiles and a limited fire at an Aramco building, as the threat to oil infrastructure grows. Hormuz Disruption: Attacks on commercial ships, including reports of a containership sinking, are deepening risks to a waterway vital to global energy trade. Middle East oil exports have plunged, and prices remain elevated amid supply fears. Power Projects: Saudi Arabia’s Rabigh 2 gas-fired power expansion has secured a $2.2 billion construction contract, while the planned 3,000-MW Egypt–Greece renewable electricity link won international recognition, advancing a major Eastern Mediterranean connection.

Regional Energy Ties: Saudi Arabia signed energy cooperation deals with Kuwait, Qatar and Egypt spanning oil, gas, electricity, renewables, storage and grid links. Saudi Security Risk: Houthi strikes hit offices at Aramco’s Dhahran headquarters, causing a limited fire and no reported casualties. The group threatened further attacks on Saudi oil facilities and airports as missiles and drones targeted the kingdom. Oil Markets: Brent traded near $106 a barrel as attacks on shipping through the Strait of Hormuz and risks to Saudi exports unsettled markets. Power Investment: Elsewedy Electric and China’s Sinohydro won a $2.2 billion contract to add 2.3 GW of gas-fired capacity at Saudi Arabia’s Rabigh 2 plant, with operations targeted for 2029. Iraq Output: DNO’s Kurdistan Region oil sales rose 94% year on year in the third quarter, as production restarted after wartime shutdowns.

Hormuz Shipping Risk: Iran’s threats and attacks on commercial vessels are raising concerns over Gulf exports. CENTCOM rejected Tehran’s claim of control over the strait, saying US forces and partners helped move more than 19 million barrels of crude in one day. A tanker reportedly hit by three drones left one Filipino seafarer injured; its 24 other crew members were safe. Saudi-Yemen Escalation: Saudi Arabia struck a Houthi fuel depot near Sanaa, while the group renewed missile and drone attacks on the kingdom. A targeted Aramco administrative building in Dhahran suffered a limited fire, with no injuries reported. Oil Markets: Brent hovered near $106 a barrel as Gulf supply risks supported prices, partly offset by prospects for Russian diesel supplies. Egypt Exploration: Chevron and state-owned EGAS agreed to invest at least $88 million in two exploration wells and seismic work at the offshore Lotus block.

LNG Disruption: Qatar’s Amir says the Strait of Hormuz closure and damage to Ras Laffan have disrupted a significant share of exports. Qatar supplies about one-fifth of global LNG, and European gas prices have climbed above €86/MWh, their highest since December 2022. Oil Security: Tanker attacks and threats to Saudi energy sites are keeping pressure on supply, while Riyadh is weighing a major expansion of pipeline capacity to bypass Hormuz. OPEC has cut its 2026 oil-demand growth forecast to 400,000 barrels a day from 1.4 million. Market Outlook: The IMF sees oil averaging $95.74 a barrel in 2026 and warns energy-importing economies face mounting strain. Power Transition: Four-hour batteries are now cheaper than gas peaking plants in every Middle East and Africa market studied; regional storage costs are forecast to fall from $120/MWh in 2026 to $80 by 2035.

Hormuz Risk: Iran’s IRGC said it struck an oil tanker in the Strait of Hormuz, while UK maritime authorities reported a separate tanker attack near Oman; it is unclear whether the incidents are linked. US claims that Gulf oil flows have recovered to 14 million barrels a day exceed tracker estimates, which put Hormuz shipments much lower. Saudi Supply Routes: After attacks on Saudi targets heightened fears of disruption, Energy Minister Prince Abdulaziz bin Salman said the kingdom could add up to 1.2 million barrels a day of pipeline export capacity within weeks by temporarily converting a gas line. Upgrades could eventually lift bypass capacity to 10 million barrels a day. Brent rose about 2% to near $107. Iraq’s Oil Reliance: Iraq’s dinar devaluation is intensifying household and fiscal pressure. Oil supplied 78% of government revenue through July, while spending far exceeded income and foreign reserves declined.

Saudi Energy Security: Houthi attacks have forced Riyadh airport to extend its closure and raised fears of wider threats to Saudi infrastructure. Energy Minister Prince Abdulaziz bin Salman said the attacks are testing the kingdom’s resilience and warned that its response would be serious. Export Routes: Riyadh plans to lift oil pipeline capacity to destinations beyond the Persian Gulf to 10 million barrels a day within two to three years, strengthening an alternative route as regional risks mount. Hormuz Standoff: Tehran is reviewing Washington’s response to its proposal to reopen the Strait of Hormuz, but says the US has not met its conditions; negotiations remain stalled. Oil Markets: Brent remains above $100 a barrel as Saudi attacks fuel supply concerns, while uncertainty over a proposed Russia-Ukraine energy truce has added to price swings.

Saudi Energy Security: Houthi attacks hit Riyadh and Dammam airports, with the group also claiming strikes on two Aramco facilities. The Riyadh attack killed at least 12 and injured hundreds; a further strike killed one person and injured 11. The escalation puts Saudi energy infrastructure and regional supply routes at greater risk. Hormuz Tensions: Iran says a crude tanker caught fire after hitting a mine while attempting to leave the Strait of Hormuz, and Tehran has called the US response to its conditions for reopening the waterway “insufficient.” Regional Cooperation: At Riyadh’s energy forum, Qatar and Saudi Arabia signed a cooperation pact spanning oil and gas, power, renewables and hydrogen. Saudi Arabia also signed energy agreements with Kuwait, Qatar and Egypt. New Supply Links: Syria issued its first letter of credit in 14 years to finance a petroleum-products deal with Saudi Aramco. In Iraq, the government discussed raising oil and associated-gas output with TotalEnergies and ConocoPhillips, while officials prepare talks on reviving an oil pipeline to Saudi Arabia’s Red Sea coast.

Saudi Escalation: Riyadh’s main airport remains closed after a Houthi missile strike killed 12 and injured more than 300. The Saudi-led coalition vowed a decisive response, while President Trump said he is weighing US involvement—raising the risk to regional shipping and energy flows. Hormuz Disruption: A US fighter jet disabled a cargo ship near Iran after it tried to breach the US blockade. A tanker also caught fire in the Strait of Hormuz after reportedly striking a mine; tanker rates have surged to record levels as traffic and oil supplies come under pressure. Oil and Environment: Iran’s foreign minister warned that attacks on oil facilities and refineries risk long-lasting soil and water contamination. Alternative Routes: Iraq expects talks on a pipeline linking Haditha to Syria’s Mediterranean coast to conclude by year-end, potentially opening an export route outside the Gulf. Cyprus also plans to raise Turkey’s proposed undersea gas pipeline with EU counterparts.

Hormuz Shipping: A crude supertanker caught fire in the Strait of Hormuz. The UK maritime agency reported an unknown projectile strike; Iran’s IRGC said the vessel hit a mine while using an unauthorized route and warned other ships. The crew were reported safe. Saudi Security: A Houthi missile attack prompted an evacuation and flight suspensions at Riyadh airport, with injuries reported. Disruptions come just before the city hosts the World Petroleum Congress, starting October 11. UAE Rescue: Coast Guard teams rescued all 22 crew members from a separate oil tanker fire in the Arabian Gulf; all were stable. Egypt Renewables: Egypt and ICARDA are expanding work on solar-powered irrigation, desalination and water conservation under a programme running through 2027.

Hormuz and Oil Risks: Iranian forces have hit tankers in the Strait of Hormuz and threatened vessels beyond it, while Houthi attacks add pressure around Bab al-Mandab. Strait traffic reportedly fell 36% as US sanctions targeted 17 Iran-linked tankers, though Gulf crude exports have rebounded. Oil prices swung on shifting war signals and supply fears. Regional Supply Moves: Iraq is exploring a Syria truck route to bypass Hormuz risks and aims to end flaring at North Oil fields by 2027. Saudi Arabia and the UAE backed a Japanese oil initiative and agreed to strengthen power-grid links. Import Costs: Cambodia spent $2.82 billion on fuel imports in the first nine months of 2026, up nearly 54% year on year, as rising demand met higher global prices tied partly to Middle East conflict. Stranded Iranian Ships: Sri Lanka says it has no immediate plan to assist 19 Iranian vessels off its coast, which reportedly face shortages of food, water and fuel amid sanctions risks.

Iran War and Oil: Trump reopened the possibility of striking Iran before the US midterms, reversing his pledge of restraint a day earlier. He also touted a Russian diesel supply deal as a way to ease fuel prices. Hormuz Shipping: Tensions remain high despite talk of negotiations: Iran claimed a strike on an LPG carrier and threatened ships using routes it rejects, while US forces said they had diverted 133 vessels under the blockade. Sanctions: Washington added 17 tankers to its Iran sanctions list, targeting oil shipments and the remaining “shadow fleet” as the blockade squeezes Tehran’s exports. Alternative Routes: Iraq is planning to move crude by truck to Syria, seeking an export route that avoids Hormuz risks. Market Impact: Oil prices eased on Trump’s comments and expectations of renewed Chinese fuel exports, but shipping threats and tight diesel supplies keep energy markets exposed to disruption.

Hormuz Talks: Iran is reviewing US feedback on its seven-day proposal to reopen the Strait of Hormuz, with a response expected within days. Tehran’s demands include ending hostilities and the US blockade, while Washington says talks are productive. US-Iran Standoff: President Donald Trump ruled out new strikes before the Nov. 3 midterms but kept the oil blockade in place as the Pentagon prepares options that include Iranian energy sites. Oil prices eased on the pledge, but the threat of renewed conflict and attacks on shipping keeps markets volatile. Winter Gas Risk: Europe faces tight supplies after the Iran war disrupted LNG shipments through Hormuz. EU storage is about 73% full, and a cold winter could force demand cuts; UK reserves also risk running low. Oil Export Routes: Iraq and Syria are advancing plans to study a pipeline that would bypass Hormuz, with Chevron and Qatar’s UCC among the consortium partners. A report says US envoy Thomas Barrack pressed for a firm linked to his business partner to join the project, raising ethics concerns.

Hormuz and Oil Markets: Iranian attacks on vessels have cut oil flows through the Strait of Hormuz sharply from late-September levels, helping push Brent above $100 a barrel. Prices eased after Donald Trump ruled out US strikes on Iran before the November 3 midterms, but shipping risks remain. Saudi Security: Houthis claimed another missile strike on Riyadh airport and warned oil-sector workers to avoid facilities; Saudi forces said they intercepted missiles. France offered defensive support for key infrastructure, including the Yanbu terminal and East-West pipeline. Iran Sanctions and Talks: Washington announced fresh sanctions on companies, individuals and vessels linked to Iran’s oil trade, targeting what it says is the remaining shadow fleet. Tehran says it is reviewing US views on its proposal to end the war and reopen Hormuz within seven days. Gulf Energy Links: Saudi Arabia and the UAE agreed to study rail, electricity and broader energy cooperation. In Saudi Arabia, GAS Arabian Services won a contract worth at least $76.8 million to build a gas delivery system for Ghazlan 1.

Oil & Shipping: Brent surged above $105 a barrel as attacks on tankers around the Gulf and Strait of Hormuz revived supply fears. Crude flows are nearing pre-war levels, but costly, risky voyages and a shortage of supertankers are straining shipments; the IEA’s accelerated reserve release has offered limited relief. Iran Escalation: Reports that the Pentagon is preparing options for renewed strikes pushed prices higher. Possible targets include Iranian energy infrastructure, though President Trump has not decided whether to act. Gas Markets: Israel’s NewMed Energy again declared a $6.7 billion gas-supply deal with Dalia Energies cancelled; Dalia disputes the move and says it will pursue its legal rights. Storage and Renewables: AmpereHour Energy and Ampt will work together on solar, battery storage and grid projects across the Middle East and other markets.

Hormuz Risks: Iran says it will close routes it calls unauthorized in the Strait of Hormuz, as tanker attacks and harassment reached a weekly high even while Gulf oil exports rebounded. The threat keeps supply risks elevated; Brent is near $100 a barrel. Regional Fallout: Houthi attacks on Saudi airports killed three people and injured 36, prompting security warnings and deepening concern over risks to Gulf energy routes and infrastructure. Iraq has devalued its currency as the war disrupts oil shipping and export revenue. Energy Projects: Cyprus’s first offshore gas shipment is planned to travel via Egypt to Greece, with flows from the Kronos field targeted for 2028. Chevron and Egypt’s state gas company also agreed to an $88 million Mediterranean exploration deal. Infrastructure: Syria says sabotage damaged a pipeline in the northeast, the third such incident in recent weeks.