Weekly Bitumen Report: Market Confusion after the 3.75% Fall in Crude Oil Price on Wednesday

On 274^th day of Russia’s war against Ukraine, the widespread attacks of Russia led to power cut in most of the regions of Ukraine and millions of the Ukrainian did not have water or heating appliances accordingly. However, the severe sanctions against Russia led to the partially zero export of Russia’s oil to Europe in November.

On the other hand, G7 countries are planning for a price cap on Russia’s oil to put pressure on the countries that are buyers of Russia’s oil by boycotting of the shipping lines and insurances.

In China, although the government is applying the most severe restrictions to eradicate Corona outbreak, they have seen the highest rate of new cases since the beginning of the pandemic. On Wednesday, 31,527 new cases were detected which was higher than the previous record in April that was 28,000 cases and it led to the full lockdown of Shanghai as the biggest city of China and stop of economic activities.

The Zero-Covid policy has not only stopped the spread of the virus, but also it has led to heavy economic impacts.

The fear of new outbreak of Corona caused crude oil to drop 3.75% and reach the level of almost 84 USD on Wednesday.

On the other hand, based on the new reports of Goldman Sachs, it seems that the last decision of OPEC regarding the 2-million cut was not a political decision and it was made according to the oil data. Unlike the previous declaration, OPEC might announce another cut in production.

On 23 November, the market confusions were significant so that Singapore fuel increased 8 USD while the five-dollar fall of Singapore and South Korea bulk bitumen price showed the records of 535 and 430 USD respectively.

Bahrain bulk bitumen is still being traded at 425 USD.

In Iran, from 20 October to 20 November, the average competition of the refineries over vacuum bottom was around 64% and on 22 November, the base price of vacuum bottom increased around 8.3% and the price range of highest and lowest prices of Iran bulk bitumen came to 40 USD.

These complicated conditions which is the result of inflation, new outbreak of corona, and ambiguity in economic future has led to less export which is not in line with the range of previous years and any new deals should be made very cautiously.

This article was prepared by Razieh Gilani, the export manager of Infinity Galaxy (www.infintiygalaxy.org).