How BlackRock and an Italian shipping dynasty are upending Middle East's port business

A new port power is rising in the Middle East, disrupting the traditional dominance of China's COSCO and the UAE's DP World in the region. At the heart of this rise is an alliance between US asset management giant BlackRock, with its $11 trillion in assets, and the low-profile Italian family business Mediterranean Shipping Company (MSC). Together, they are reshaping the port landscape of the Middle East.

In March, the alliance reached a $22.8 billion deal to acquire 43 ports from CK Hutchison, a Hong Kong-listed conglomerate owned by one of Asia's richest men, 96-year-old billionaire Li Ka-shing. The deal has attracted widespread attention as it will give BlackRock and MSC control of two ports at either end of the Panama Canal, a vital strategic waterway that former US President Donald Trump once threatened to control to weaken China's influence in the Western Hemisphere.

However, the impact of this deal extends far beyond Panama. The Trump administration had been working to weaken Beijing's influence on global supply chains, and the Middle East is becoming embroiled in this conflict. BlackRock and MSC will take over 12 ports located on the strategic coastlines of the UAE, Oman, Iraq, and Egypt. China's continued expansion of infrastructure construction in the Middle East through the "Belt and Road" Initiative is well known. For some, this deal foreshadows potential countermeasures taken by the Trump administration.

But the agreement between Hutchison Whampoa, BlackRock, and MSC is more complex. It happened outside the purview of diplomats, think tanks, foreign powers, and even traditional investment bankers, who should have facilitated such a deal. In short, this port deal was struck between the super-rich, highlighting how global corporate and industry giants are preparing for a more unpredictable and nationalistic trading system. BlackRock declined MEE's request for comment on the matter, while MSC did not respond at the time of publication.

Mediterranean Shipping Company, the world's largest container shipping company, will be responsible for operating the ports acquired from Hutchison Whampoa. Experts and industry insiders say that one underreported loser in this deal is the UAE, whose state-owned DP World has already established a leading position in Africa and the Middle East. "DP World will say externally that this deal does not pose a threat to its business, but internally, they are definitely angry and scared," a senior port manager in the Middle East told Middle East Eye.

Analysts say the UAE has reason to be concerned, as MSC's partnership with BlackRock highlights a paradigm shift in the shipping industry: with increasing geopolitical risks, shipowners are turning to buying ports rather than relying on operators like DP World. Peter Sand, chief analyst at shipping platform Xeneta, told Middle East Eye: "Over time, MSC will send their ships to their new assets. DP World will need to find new partners to fill this gap. Dubai does not welcome this deal."

The Middle Eastern shipping executive said that this mega-port deal also strikes at the self-esteem of the Gulf oil-rich states, as it reminds them that despite their vast sovereign wealth funds, there are still American and European entities just as wealthy as they are, and some things they cannot buy. "The Gulf rulers like big splashy deals. This is about self-esteem. Saudi Arabia and the UAE will want to know why they weren't invited to participate in buying ports in their own region," the executive said. DP World did not respond to Middle East Eye's request for comment.

Infrastructure projects such as ports are the foundation for Gulf states to showcase their economic and geopolitical influence as emerging middle powers, independent of Washington, Moscow, and Beijing. The UAE has long used DP World as a means of projecting power in the Red Sea region. Gulf states also hope to use ports to diversify their economies away from reliance on energy and leverage their position as a "crossroads" between East and West to increase revenue streams. For example, Saudi Arabia plans to quadruple its port throughput capacity by 2030.

Peter de Langen, owner and chief consultant at Ports & Logistics Advisory, told Middle East Eye that shipping companies like MSC have an advantage because they can tap into the cash reserves accumulated from high freight rates in recent years. "The Gulf states have so far failed to develop a shipping industry in the same way as developing national airlines," he told Middle East Eye. "I can imagine state-owned terminal operators like DP World wanting to acquire a shipping company, but that is an expensive acquisition," de Langen added.

Instead, Gulf states have focused on building ports. For some countries, this overexpansion of infrastructure has gone too far, and experts say there is a surplus of port supply in the Middle East and North Africa region. "The port utilization rate in the Red Sea region is 60%. That's low. A healthy utilization rate should be 75% to 80%," the port executive told Middle East Eye.

In Washington and Beijing, the sale of Hutchison Whampoa is seen as the latest move in an escalating great power competition. Trump described the Panama Canal portion of the deal as the US "taking back" a strategic asset that the US foolishly returned to Panama in 1999. Many consider this a simplified narrative of the canal's history. Ironically, however, Beijing, through its pushback, has added some weight to Trump's nationalist interpretation of the deal. Chinese state-owned newspapers have accused Hutchison Whampoa of treason for selling its ports.

Unlike COSCO, which plays a leading role in China's "Belt and Road" Initiative, Hutchison Whampoa is a private company. Any move by Beijing to block the deal could backfire, as it would undermine business confidence and portray these ports as mere tools of Chinese power. Analysts and industry executives expect the deal to proceed despite Beijing's criticism. But the deal is more complex than Beijing and Washington portray. BlackRock, which is listed in the US, appears to have capitalized on Trump's tough rhetoric toward China, which may have unsettled Hutchison Whampoa. In the weeks leading up to the deal, Trump revoked Hong Kong's special trade status. He also announced a plan to impose port fees on Chinese ships.

Peter Frankopan, a trade route expert at Oxford University and author of _The Silk Roads: A New History of the World_, told Middle East Eye that BlackRock piecing together a consortium to buy these ports "fits a tried and tested pattern of commercial interests aligning closely with US government policy." But he said the deal should not be simplified as "America trying to compete with China or the 'Belt and Road' Initiative." Frankopan added: "In my view, it is more of a defensive move, trying to stymie growing Chinese ambitions - which might sound similar, but I think is different in motivation and practice." The Trump administration has not linked the deal to broader infrastructure projects such as the India-Middle East-Europe Economic Corridor. The Trump administration also has less influence over BlackRock and MSC than Beijing has over COSCO.

BlackRock, the world's largest asset manager, is itself interested in expanding into the port sector, given that ports are hard assets that can provide a steady source of income. If ports are well-located, they can generate stable cash flow, and operating costs are easily passed on to shipowners. Experts say that BlackRock's CEO, Larry Fink, has cleverly positioned himself as serving Trump's interests. Fink has been attacked by conservatives for his alleged "woke" investing. He has been scorned by Trump's close ally Tucker Carlson, who often portrays Fink as the kind of globalist billionaire who has caused the decline of the American middle class.

In an interview with Fox News after the deal was announced, Trump said, "I'd rather deal with BlackRock than a company based in China, and BlackRock is good." This is not the first time Fink has tried to get ahead of geoeconomic trends, especially in the Middle East. Fink has cultivated a close relationship with Saudi Crown Prince Mohammed bin Salman. He has dined privately with the Crown Prince and opened a BlackRock office in Riyadh, eyeing a piece of the pie from the Public Investment Fund's spending as it diversifies its economy away from reliance on energy. However, BlackRock's opportunities in Saudi Arabia have been slow to materialize. Among Arab diplomats, Fink, a Jewish-American Democrat, is seen as an advocate for the normalization of relations between Saudi Arabia and Israel.

Port executives and industry analysts are dismissive of BlackRock's role in the deal. One port executive told Middle East Eye: "All the news you hear in America is about how BlackRock stepped up to kick Hutchison Whampoa out of Panama." However, industry insiders say that Hutchison Whampoa has been trying to sell its ports for two years. Billionaire Li Ka-shing has earned the nickname "Superman" for his extraordinary ability to sell assets at the right time. The Middle Eastern port executive told Middle East Eye that Li Ka-shing's sons will inherit his empire, and they want to move the family business out of the politically sensitive port business.

The executive said: "Li Ka-shing had a problem. He couldn't sell his ports to COSCO, because COSCO is effectively an arm of the Chinese state, because that would be too blatant for the US and the countries where the ports are located." Experts say that while BlackRock has received the most attention, its partner MSC is the biggest beneficiary. Sand told Middle East Eye: "Shipping companies owning their own terminals is becoming a vitally important power play in the shipping industry. These ports are profitable. By owning both ships and ports, the owners are building synergies. These ports are strategic for MSC, as they will allow it to use its own assets for logistics and port calls."

MSC was founded by Neapolitan sea captain Gianluigi Aponte. In a cutthroat industry where business still revolves around marriages and family ties, MSC is considered one of the most tightly knit and secretive shipping companies. The family rarely gives interviews or discloses its profits. Aponte, 84, was born into a Neapolitan family that claims to have been involved in maritime trade since the 17th century. Aponte's father sought his fortune in Somalia and died of malaria after becoming a hotelier. Aponte became a captain, transporting socialites and jet-setters from Naples to Capri. On one of these voyages, he met his Swiss-Israeli wife. The two started their business with one ship in 1970 and grew it into the world's largest container shipping company.

According to employees, Aponte rarely appears in public, but he has earned the loyalty of tens of thousands of employees, to whom he sends personalized invitations to ship-naming ceremonies. Aponte's son, Diego, and daughter, Alexa, work at MSC. The executive told Middle East Eye that Diego was in charge of the negotiations with BlackRock. MSC is known in the shipping industry for spotting the trend of transitioning its fleet to mega-container ships early on, where products can be loaded onto ships larger than three football fields at extremely low prices. But MSC has also come under scrutiny from US drug enforcement officials. MSC ships have been implicated in cocaine smuggling. US and European authorities have previously claimed that MSC crews have been infiltrated by Balkan cartels.

In a 2019 drug bust, US agents found $1 billion worth of cocaine on an MSC ship. MSC denies knowingly participating in drug trafficking. By partnering with BlackRock to push Hutchison Whampoa out of the global ports game, MSC has earned goodwill in Washington. Meanwhile, its biggest rival family, the French-Lebanese Saadé family, which owns CMA CGM, is heading to Trump's door. During a visit to the White House in March, Rodolphe Saadé pledged to invest $20 billion in the US maritime sector. Trump wants to revive the US shipbuilding industry to counter China's dominance in the trade. Industry insiders say that as Trump tears up the neoliberal trade world from which they profited, the Aponte family is scrambling along with everyone else to protect their business interests.

Langen told Middle East Eye: "You can't look at MSC in the same way as COSCO, which is a state-owned company. Who does MSC serve besides the interests of the Aponte family? Does it serve the interests of Switzerland or Italy or the US? In my view, ultimately none."

Ports have multiple uses for shipping companies. They can be used as waypoints for maintenance and repairs; for transshipment, which is unloading and re-exporting goods; and as final destinations or ports of origin. MSC is already using Saudi Arabia's King Abdullah Port as a transshipment hub. This helps Saudi Arabia boast that it is increasing its port throughput capacity, but ports earn much more profit on containers handled at the final origin or destination compared to cheaper transshipment.

Experts say that the ports MSC and BlackRock are acquiring along Egypt's Mediterranean coast will allow for cheaper repair and maintenance services than in Europe, where wages are higher and the EU imposes costly environmental regulations. Sand said: "With this acquisition, MSC gains access to many hubs. The important thing is not Egypt's imports, but the strategic location of these assets, which allows MSC to move throughout the Mediterranean." The deal also includes ports in lesser-known emirates such as Ajman and Ras Al Khaimah. It will also consolidate MSC and BlackRock's control over strategic gateways to Middle Eastern countries.

Hutchison Whampoa accounts for 80% of Oman's maritime cargo at the port of Sohar. The deal also includes a port in Basra, Iraq, which is Iraq's only outlet to the sea. Ironically, MSC and BlackRock may be entering Middle Eastern ports just as they are poised to become busier, precisely because of Trump's trade war with China. For years, Chinese exports to the Gulf region have been growing. Experts say that as US consumption declines due to tariffs, Chinese manufacturers excluded from the US market are preparing to dump their cheaper products more into the Middle East. Thus, just as Trump hopes to reshape the global order, BlackRock and MSC are positioning themselves to profit from it.