US Sanctions Ground Fly Baghdad as Gulf Air Freight Corridors Expand

By James Calloway

Fly Baghdad cancelled several flights from Baghdad International Airport this week after the US Department of the Treasury sanctioned the carrier and its CEO, Basheer Abdulkadhim Alwan al-Shabbani, on Monday. The Treasury alleges the airline delivered weapons, fighters and money to Iran-aligned militias in Iraq, Syria and Lebanon.

The Iraqi carrier has rejected the charges outright. The sanctions are "not based on any material or moral evidence," Fly Baghdad said in a statement reported by Reuters on Monday. "The company will resort to the legal method to demand material and moral compensation," it added, calling the US decision based on "misleading and unreal information."

What does this change for Iraqi connectivity? In the short term, less of it. Cancelling departures from Baghdad is an immediate network consequence, and a sanctioned CEO complicates banking, insurance and lessor relationships far beyond the flight schedule. The Treasury has not published evidence. Until it does, or until Fly Baghdad's legal challenge produces results, the airline operates under a cloud no amount of denials will lift.

A food corridor for Abu Dhabi

The headline development for cargo operators is quieter. Etihad Cargo, Abu Dhabi Airports and Abu Dhabi Food Hub have partnered to create a food air corridor through the UAE capital, an arrangement designed to move perishables through Abu Dhabi's hub with dedicated handling. The parties have not yet published volume targets, tonnage commitments or a start date. Treat the announcement as a framework, not a service. The proof will come in the first freighter schedules and cold-chain capacity figures.

Bahrain builds 25,000 square meters of warehousing

Bahrain International Airport will open its air cargo village soon, Al Ayam reports, citing Bahrain Airport Company CEO Mohammed Yousef Al-Binfalah. The project spans 25,000 square meters north of the airport and includes 10 warehouses.

No opening date was given. "Soon" is doing heavy lifting in that announcement. What is concrete is the footprint: 10 warehouses in a single development positions Manama to compete for Gulf transshipment traffic, and it lands as neighboring hubs in Abu Dhabi, Doha and Dubai keep expanding.

United Airlines asks DOT to block Saudia-Kuwait Airways codeshare

United Airlines has asked the US Department of Transportation to make its approval of a codeshare between Saudia and Kuwait Airways contingent on Saudi Arabia's General Authority of Civil Aviation approving United's own agreement with Emirates.

In a filing with the DOT, United says GACA has ignored numerous requests submitted since May, Simpleflying reports. The United-Emirates codeshare would grant customers of either airline access to more than 100 destinations, with flights between the US and Saudi Arabia at its core.

This is leverage, plainly applied. United is telling the regulator: no Saudi reciprocity, no Saudi codeshare. Whether the DOT accepts linkage between two separate commercial agreements is the open question, and the filing does not say.

Milaha adds Upper Gulf Express service

Qatar Navigation (Milaha) will add a new shipping service, Upper Gulf Express (UGX), to King Abdul Aziz Port in Dammam from tomorrow, according to a statement. The service connects Dammam to Sohar, Jebel Ali, Hamad Port, Shuwaikh Port and Umm Qasr Port, with two weekly trips of 1,000 TEU each. That is modest capacity, but it shortens feeder legs across the northern Gulf at a moment when Red Sea disruption keeps pushing cargo toward land and air alternatives.

Tanker crew negotiations inch forward

Greek shipowner Empire Navigation says it sees progress on the release of sailors aboard the St Nikolas, seized by Iran on 11 January, after the release of a cadet and a meeting between the Filipino ambassador and the 18 remaining crewmen, according to a statement released last Friday. The Marshall Islands-flagged tanker, loaded with Iraqi crude bound for Turkey, was seized in tit-for-tat retaliation for the US seizure of the same vessel last year, when it was known as Suez Rajan, to enforce sanctions. Eighteen crew remain detained. Progress is not release.

India seeks EU carbon market concessions

India will ask the EU for concessions to align its forthcoming national carbon market scheme with the bloc's emissions trading system, implemented in January, Bloomberg reports, citing sources with knowledge of the matter. India wants to integrate credits from a local fossil fuel tax with EU emissions allowances, meaning the bloc would recognize energy auditors approved by the Indian government. The move would deliver a tax exemption for small and medium-sized Indian enterprises. India plans to raise the impact of the EU's carbon border adjustment mechanism during trade agreement negotiations on 19 February.

Markets and data

• Brent crude dropped 0.74% to USD 79.47 a barrel on Tuesday; WTI fell 0.72% to USD 74.22. Brent traded below USD 80 for the first time since 26 December, as rising supply in Libya and Norway offset geopolitical turmoil and US outages.
• The Baltic Exchange's dry bulk index rose 1% to 1,518 points on Monday, a third consecutive gain and its highest since 11 January. The panamax subindex gained 1.7% to 1,576; capesize rose 1.25% to 2,272; supramax fell 3 points to 1,027.
• Iran's exports to China rose 30% year-on-year in December 2023 to USD 1.25 billion, China's customs office said, per Mehr. China exported USD 10.7 billion to Iran in 2023, up 8.6%. Total bilateral trade exceeded USD 14.6 billion but fell 6.2% from USD 15.5 billion. Iran's overall exports to China dropped 27% to USD 4.5 billion from USD 6.2 billion.

What fills the February calendar

The Middle East Bunkering Convention runs 5–7 February in Dubai, addressing marine fuel supply chains, decarbonization and new fuels. Cargo Facts EMEA 2024 convenes in Amsterdam the same dates, 5–7 February, drawing air freight leaders from Europe, the Middle East and Africa.

Sustainable Aviation Futures MENA follows 12–14 February in Dubai, with 80 expert speakers and more than 200 senior attendees covering SAF regulation, financing and investment in the region. The Future Warehouse & Logistics Conference runs in parallel, 12–14 February, on resilience, IoT and automation.

Abu Dhabi hosts the TradeTech Forum on 27 February with some 180 trade leaders. The Logistics Middle East Awards follow in Dubai on 6 March, with nominations closing 19 January. Riyadh hosts a special World Economic Forum event on global collaboration and energy on 28–29 April, and Abu Dhabi's Electric Vehicle Innovation Summit closes the run on 20–22 May.

The pattern across these items is consistent: Gulf infrastructure keeps expanding while Washington and Brussels tighten sanctions and carbon rules around it. Operators who can hedge between air corridors, feeder services and compliance regimes will set the pace through the first quarter.