Malaysia recorded a sharp decline in crude oil imports in March as cargo arrivals from the Gulf whittled down due to the closure of the Strait of Hormuz. 

Crude oil imports from the Gulf region fell 66% on the previous month, after recovering in April supported by a rise in imports from West Asia, the Red Sea and other Southeast Asian countries, according to Lloyd’s List Intelligence. 

Iran’s closure of the Strait of Hormuz has cast a critical spotlight on the waterway, through which a fifth of the world’s oil transits. Nearly 15 million barrels per day (mb/d) of crude oil, equalling 34% of global crude oil trade, passed through the strait last year, according to the International Energy Agency.

Vast majority of the crude oil transiting the waterway was destined for Asia, with China and India receiving a combined 44% of these exports. 

Meanwhile, around 20 mb/d of oil – including crude oil and products – transited the strait in 2025, the agency said. 

The Strait of Hormuz logged increased maritime traffic between July 27 and August 2, with 84 transits up from 45 recorded in the previous week, according to data shared by the maritime data and intelligence company. Non-Iranian-linked traffic also rose modestly as containerships and gas carriers resumed trackable transits.  

The Islamabad Memorandum of Understanding signed between the US and Iran in June granted relief to vessels stranded in the Gulf, reducing trapped mainstream tankers from more than 160 to just 29.

Its collapse last month, however, left a new clutch vulnerable with 65 ships that entered during the MoU period yet to leave the region. 

“Owners and operators remain reluctant to send ships through Hormuz amid continued uncertainty,” Lloyd's List added. 

The US is maintaining its blockade of Iranian ports, with 45 merchant ships having been redirected, two vessels disabled, and two boarded.  

Iran’s Foreign Ministry spokesman said on Wednesday that talks between Tehran and Muscat on the strait have entered their final stage. The negotiations also include plans to establish a new middle corridor in the strait as well as include a service fee. 

Iran is looking to charge transiting between 5%-7% of the price of their cargoes, Reuters reported, citing a senior Iranian official. Oman is discussing fees of around 3%, while Washington is sticking to a no-fee policy.

Saudi Arabia has recorded its first quarterly contraction since the second quarter of 2024 and its steepest decline since the second quarter of 2020, as the US-Iran conflict continues to disrupted shipping activity and weigh on regional economies. 

Saudi’s gross domestic product slid 4.8% from April through June this year, driven by a 24.7% decline in oil activities, according to flash estimates issued by the kingdom’s General Authority for Statistics.

The oil sector slump and widespread implications of the regional conflict have triggered a sharp reversal from  3% growth logged in the previous quarter.   

Oil activities, which include extraction and refining of crude oil and natural gas, contributed negatively to real GDP growth by 5.4 percentage points. The overall decline was partially offset by a nominal rise in government (0.9%) and non-oil activities grew (0.6%).

Seasonally adjusted real GDP also decreased 4.9% quarter-on-quarter in Q2, led by a 21.5% slump in oil activities.

The estimate comes on the heels of the International Monetary Fund’s 2026 Article IV consultation report issued Wednesday, extoling the Gulf’s largest economy on its economic resilience during the current conflict, backed by strong fundamentals, diversified oil and logistics infrastructure. 

The IMF projected the kingdom’s economy to expand by 1.7% in 2026, against a 1.1% prediction in its World Economic Outlook report issued earlier this month. The fund’s growth projections for next year remained unchanged at 5.5%.

Saudi Aramco shuttered its 400,000-barrel-per-day Jazan refinery on July 27 following damage from an attack, according to a Reuters report.

The facility, which sustained damages to its integrated gasification combined-cycle complex and an oil storage area, is expected to resume operations by August 15.  

Aramco share price fell 1% on July 28, closing at 26.3 Saudi riyals, shedding 0.26 Saudi riyals per share from the previous day’s close of 26.56 Saudi riyals. 

Inflation is expected to rise modestly to 2.2%, the IMF has said, with higher shipping and insurance costs partly offset by subdued rent inflation and price caps on some fuel and food items. 

A modest reduction in the non-oil primary deficit is appropriate in 2026, it added, while backing fiscal consolidation and Vision 2030 reforms for sustained growth and diversification. 
 

The UAE's free trade negotiations with the European Union are advancing more slowly than talks with other partners, with the bloc's insistence on including non-trade issues identified as the key obstacle, the country's foreign trade minister has said.

The seventh round of negotiations with the EU has concluded, minister Thani bin Ahmed Al Zeyoudi said this week, adding that the EU's approach of linking trade deals to corporate sustainability reporting and labour standards "will not work with us." Several other countries, including the US, have raised similar objections to the EU's stance.

"The slow pace stems from the EU insisting on including non-trade matters," Al Zeyoudi said, a position that has drawn criticism from multiple trading partners engaged in separate negotiations with Brussels.

The comments came as Al Zeyoudi confirmed the UAE is continuing talks with at least 20 countries on comprehensive economic partnership agreements (CEPAs). Negotiations with Rwanda, Ghana and Zambia have reached their final stages, while talks with Bangladesh and Peru are making good progress.

The UAE has concluded 37 CEPAs to date, 18 of which are already in force. Non-oil foreign trade rose 13% year on year in the first half of 2026 to $517 billion, despite four months of geopolitical disruption stemming from the US-Israeli war with Iran. Non-oil trade with fully implemented CEPA partners reached $82.7 billion, including $52.8 billion in imports and $18 billion in non-oil exports.

Al Zeyoudi also said the UAE is working to develop logistics infrastructure and trade corridors to strengthen resilience against global supply chain disruptions.

The United States and Saudi Arabia have signed a civil nuclear cooperation agreement that would allow the kingdom to enrich uranium domestically and use American technology to develop its nuclear programme, in a deal that stops short of the safeguards typically required to prevent weapons proliferation.

The agreement, known as a 123 Agreement, does not include the gold-standard non-proliferation provisions found in comparable accords, nor does it require Saudi Arabia to adopt the International Atomic Energy Agency's additional protocol, which grants inspectors broader powers to investigate undeclared nuclear activity. The deal must pass a 90-day congressional review before entering into force.

The Department of Energy described the pact as a peaceful nuclear cooperation agreement that will create a decades-long, multibillion-dollar partnership. However, President Donald Trump cast doubt on its future shortly after signing, saying the deal would be conditional on Saudi Arabia joining the Abraham Accords to normalise ties with Israel — a step Riyadh has said it will not take without a credible roadmap to Palestinian statehood.

The agreement is understood to permit Saudi Arabia to enrich uranium domestically and reprocess spent nuclear fuel. Saudi Arabia has long maintained it will not sign the IAEA's Additional Protocol, citing national sovereignty — a position that analysts say aligns with the current US administration's scepticism of intergovernmental bodies.

Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, has previously stated that the kingdom intends to use its domestic uranium resources across the entire nuclear fuel cycle and ultimately export uranium products. Some experts question whether a nuclear programme is necessary given Saudi Arabia's existing energy assets.

The timing of the agreement raises additional questions as the US - Iran conflict, which was based on Trump's insistence on preventing Iranian nuclear weapons development, continues. 

Gulf states have explored nuclear energy for decades, but only the UAE has operationalised a plant. The Barakah facility in Abu Dhabi, which came online in 2020, now supplies around a quarter of the country's electricity, though a drone strike in May damaged an electrical generator just outside its inner perimeter.

Yemen's Houthi militia has declared a maritime blockade against Saudi Arabia, threatening to cut off a critical oil shipping route at a moment when the Strait of Hormuz is already severely disrupted.

The Iran-backed group announced the move in a televised address, framing it as retaliation for what it described as Saudi Arabia's "oppressive siege" on Yemen, including blockades on Houthi-held ports. "The Yemeni Armed Forces declare a maritime embargo against the criminal Saudi enemy, based on the equation of 'an eye for an eye', effective immediately," the group said.

With Bab al-Mandeb being Saudi Arabia's gateway to the Asian market, experts warn that the costs of forcing ships to reroute will be astronomical.

More than 7 million barrels of oil per day — around 7% of global trade — passed through Bab al-Mandab, the southern entrance to the Red Sea, in June, according to data from Kpler. EOS has identified five Saudi-flagged vessels in the Gulf of Aden heading towards the strait and another five moving down the Red Sea.

The blockade declaration compounds existing disruption to global energy flows. Before the US-Iran war began on February 28, around 20 million barrels per day — a fifth of the world's oil supply — transited the Strait of Hormuz. Traffic recovered partially after Washington and Tehran struck a preliminary deal in mid-June but has since slowed sharply following a new round of strikes across the Gulf. The Hormuz disruption had already pushed Saudi Arabia to increase exports via its Red Sea port of Yanbu, shipments that now face their own complications.

Crude futures, which briefly topped $90 a barrel on Monday, settled at $88.27 following the announcement, while the US West Texas Intermediate benchmark edged down to $82.11. Prices steadied after mediators put a proposal to Iran for a 10-day ceasefire aimed at reviving last month's interim deal.

The Houthi move comes days after the group fired missiles at Abha airport in southern Saudi Arabia, breaking a truce in place since 2022. The Houthis said the strike was a response to a Saudi bombardment of Sanaa airport.

Analysts said the announcement alone could have significant consequences regardless of whether ships are actually attacked. Most analysts believe that even if no ships were attacked in the Red Sea, the announcement alone is likely to disrupt shipping and create uncertainty.

The Houthis previously barred US, Israeli and UK ships from Bab al-Mandab in 2023, later expanding their targeting to vessels calling at Israeli ports. Saudi Arabia's blockade of Houthi-held Yemen, imposed in 2017, has been described by the United Nations as a contributor to severe humanitarian conditions in the country. Reports last week indicated that Tehran had asked the Houthi movement to stand ready to close the Red Sea if the US struck Iranian power infrastructure.

With the signing of the memorandum of understanding in June, the US war in Iran was expected to ostensibly wind down. It has not, and from recent developments, the situation is looking far worse than what one would have expected a few days earlier. 

Yahya Saree, spokesperson for the Yemeni Armed forces, announced a maritime embargo against Saudi Arabia, effectively immediately, asserting that the Bab al-Mandeb Strait will be closed to Saudi maritime traffic. 

The strait, which sat at the heart of the global shipping landscape, now finds itself at the centre of the headlines. 

What are the key things to know about Bab al-Mandeb and why does it hold relevance in the geopolitical chessboard?

• The Bab el-Mandeb Strait is a narrow martime chokepoint that connects the Red Sea with the Indian Ocean via the Gulf of Aden.

• It is a 20-mile-wide, 70-mile-long strait with the countries of Eritrea and Djibouti to the west and Yemen on its eastern edge. 

• It gain further prominence after the opening of the Suez Canal in 1869, enabling intercontinental sea trade between Asia and Europe through the Red Sea and the Mediterranean Sea. 

• The Strait owes its name to the perils of navigating the constricted waterway. The Arabic name Bab el Mandeb means Gate of Tears or Gate of Grief. 

• Bab el-Mandeb Strait accounts for about one-tenth of seaborne oil trade, making it the third busiest chokepoint in global oil trade after the Strait of Malacca and the Strait of Hormuz. 

• Bab al-Mandeb is essential to Asia-Europe trade as the alternate Cape of Good Hope route increases transport times, fuel consumption, carbon emissions and insurance premiums. 

• An average of 9.3 million barrels of crude oil and petroleum liquids transited the waterway each day in 2023, before slipping to 4.1 million barrels per day in 2024 and 4.2 million bpd in the first half of 2025, according to the US Energy Information Administration.

• The closure of Bab al-Mandeb along with a full blockade of the Strait of Hormuz could put a quarter of the world’s oil supply out of commission.