Weekly Bitumen Report: Shakes in Oil and Bitumen Markets under War Shadow

The Political and Economic Developments of the Week

Over the past week, the world observed the unilateral and one-sided military attacks of Israel on Iran. In response, Iran shot more than 400 missiles and hundreds of drones at Israel in a retaliatory action over the last days.

Israel attacked many civilian and military areas in Iran. Based on the estimated data, more than 600 people were killed and hundreds of people were injured. At the same time, Iran launched numerous missiles towards Israel in 14 waves of attacks.

In this regard, the foreign ministers of Germany, France, and Britain will meet with their Iranian counterparts on June 20 to discuss a “Nuclear Ceasefire.”

In the meantime, America will not participate in the talks between Iran and Europe. The officials of the White House declared that their decision might change “depending on battlefield trends”.

In addition to all the damages, humanitarian disasters, and infrastructural destruction, crude oil prices jumped over 10% from the first day of Israel’s attack on Iran on June 13. In an unprecedented record, gold prices reached $4,323, but they returned to the range of $3,700 later. Iran threatened to shut down the Strait of Hormuz, and if it comes true, crude oil prices might reach the historical level of $120.

The sources of this part of the report were Blumberg and Reuters.

Crude and Fuel Oil Markets in East Asia: Fluctuations in East Asia, Price Surges due to Geopolitical Tension

One week after Israel attacked Iran, crude oil prices reached $76.68 on June 19. Singapore’s 180CST closed at 468$. Bitumen prices in Singapore and South Korea were traded at $415 and $400, respectively.

Bitumen Market in Bahrain and Europe

Bitumen prices in Bahrain remained unchanged at $400, but its supply was limited. Due to the rapid changes in the Middle East, it is possible to see another rise in Bahrain’s bitumen prices as demand has increased.

In the Mediterranean market, Israel’s attack on Iran caused a sharp spike in Brent crude oil prices, which in turn led to a significant increase in European bitumen prices, rising by about $18 to $20, reaching a range of $420 to $480.

India Bitumen Market: Weak Demand and Possible Changes due to War

On June 15, bitumen prices in India declined by $7 and $8 for VG30 and VG40, respectively, which can be a result of low demand and early rain. However, we can anticipate some changes in India prices as a result of the current war.

China: Relative Stability of Bitumen in China Under the Shadow of Storm and War; Sudden Changes Likely

Despite heavy rain and storms in the southern regions of China, the local prices of bitumen were enriched in Shandong and East China and reached $501-550, which was mainly a result of a surge in crude oil prices. However, the inventories remain high, and demand is low due to the rainy season. The import bitumen price from South Korea remained at the level of $435, but it seems that the current war will affect the level of demand from China.

Market Analysis of Iran: Bitumen Market under Severe Impact of War

By the start of Israel’s war on Iran and the evacuation of many residential areas, and the shutdown of the stock exchange and refineries, the export trend slowed down, and there is a possibility of adding a war risk surcharge on shipments moving from the Persian Gulf. On the other hand, many customers are looking for ready stock, which can be very risky without considering the operational realities. In the current situation, there is almost no ready stock in the port of Pandar Abbas or Jebel Ali, and it is unrealistic to believe the availability of ready cargo, as none of the exporters could have predicted and planned such a critical situation. Requesting ready-to-buy goods may lead to non-delivery, long delays, or even the loss of business credibility. Therefore, international buyers should make decisions with extra caution and a complete understanding of the realities of the Iranian market.

The current trend of bitumen prices in Iran and other global markets seems to be upward, and the market is passing a force majeure situation. In such a situation, it is recommended that the buyers cooperate with the suppliers who have a real presence in the market and who provide a real picture of the current situation, without unreal commitments.

Infinity Galaxy, with active offices in Iran and the UAE, continuously monitors developments and strives to maintain the export of bitumen responsibly, even in these challenging conditions, by relying on direct communication with customers and an operational understanding of the situation.

This report was prepared by Razieh Gilani, the commercial deputy of Infinity Galaxy.

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