Weekly Bitumen Report: Will Bitumen Skyrocket as Crude Oil?

The week started with the news about the pullback of 7,000 Russian troops from the Ukraine border and it lowered crude oil price up to 92 US dollars. But in the last 2 days, more authentic news was announced about Russia’s attack and finally, it came true on midnight of Thursday. As a result of President Putin’s order to attack, the oil price exceeded up to around 105 US dollars for the first time in the last 8 years till the time of preparing this article. The worries about the spread of this war in Europe and global security crises created a situation that there is no clear estimation about the maximum price of crude oil as it is constantly increasing. Even imposing new sanctions against Russia by the USA and the European Union did not affect Russia’s decision to attack. Such circumstances of crude oil not only did not smooth out the deals but also made the producers and buyers fear it as right now oil price has reached its highest level during the last 8 years and all the role players of the market are worried if the current situation continues later or it will change?
On the other hand, the issue caused by Indian customs has not been sorted out yet but it seems that it is not as critical as the earlier days and the importers are trying different solutions to clear their cargoes.
The increase of at least 25 US dollars from 1 March is predicted in India. Considering the new levels of crude oil, we shall wait and see if it will lead to more increase in bitumen price in India or not.
The nuclear negotiations between Iran and 5+1 show significant signs of progress between the parties and based on the reports of Reuters, they will reach the initial agreements till 1 March as a result, Iran’s local currency will get stronger against US dollar and it will lead to the surge of bitumen price in Iran as the main producer of bitumen in the Middle East accordingly.
The potential demand in India and other consumer countries is considerable but everyone is waiting to see if the current prices can be appropriate for them or not. As some of the ports are still filled with their old cargoes and they have not accepted the crude oil of 105 US dollars, it seems that the current rates do not seem workable for them but the fact is they have to accept the new prices based on the new level of crude oil prices. It seems that the growth of rates from the beginning of 2022 will not equally affect the level of demand in the market.
This article was prepared by Razieh Gilani, the sales manager of Infinity Galaxy (www.infinitygalaxy.org).

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