Weekly Bitumen Report: Were Crude Oil and Bitumen Prices Surrendered to Political Tension?

The Political and Economic Developments of the Week

Unsolved Crisis, Neither Will the War End, Nor Will Oil Stabilize

During the past week, the Middle East tension- especially the devastating status of Gaza and conflicts between Israel and Hamas continued. According to recent reports, deadly malnutrition and inhumane siege are significantly observed. However, the impact of these incidents was not tangible on oil prices. In the meantime, the war between Russia and Ukraine continues without any notable changes. Despite Trump’s promises to end the wars, there was not only no reverse trend after 7 months, but additional oil sanctions were imposed.
In terms of U.S. economic policy, on July 16, Donald Trump announced that the 25-percent tariff on imported goods from Japan remains in effect, and a probable commercial agreement with India was proposed. He also warned that the tariffs will be imposed against 150 smaller countries as well.
In response to his actions, the finance minister of Germany stated, “If these tariffs are imposed, America would be severely impacted, like Europe.”
These trade tensions and confusion in negotiations with the European Union and India led to market disappointment and were one of the main reasons for the fall in crude oil prices this week.

Crude and Fuel Oil Markets in East Asia

Increase in Reserves and the Fall of Hope: Brent Oil Slips Again

According to the report of EIA, the reserves of gasoline and gasoil increased significantly in America and gasoline demand has even decreased during the peak consumption season. As a result, Brent crude oil prices fell again in the middle of last week, which in addition to the impact of the EIA report, has been a sign of market disappointment regarding the progress of U.S.-Europe trade negotiations and a decrease in hope for an agreement with India.
On Thursday, Singapore’s 180CST closed at $410. Bitumen prices in Singapore and South Korea closed at $449 and $412, respectively.

Bitumen Market in Bahrain and Europe

Strategic Stability in Bahrain, Downturn in Europe ahead of the Holidays

In Bahrain, bitumen prices are still fixed at $400, and its current strategy is to save its old customers. Bitumen prices in Europe decreased slightly due to the upcoming summer holiday and returned to the range of $415-450.

India Bitumen Market

Projects Pause due to Monsoon, Market in Summer Slumber

In India, the monsoon season continues to cast a shadow over the demand for bitumen, escalating downward pressure on prices due to reduced construction activities. A slight decrease in prices from Indian refineries last week had a negligible impact on the market, as this move had already been anticipated by market participants. Currently, the market is experiencing a calm and inactive trend, and this situation is expected to continue until the end of August.

China Market

Strong Production, Weak Demand; Dual Pressure on China Market

In East Coast China, bitumen prices remained fixed, but market pressure inside China is increasing. The high reserves of the refineries with their low margins led to a reduction of local production by some of the refineries.

Market Analysis of Iran

Heat and Holiday, Limited Supply but Stable Pricing

With the rise of heat waves in Iran, most of the companies were closed for 2 days within the past week. At the same time, limited supply by many of the producers led to efforts to increase the price of Iran bitumen this week. However, bitumen prices in Iran remained at the same level as last week due to the unclear market outlook and pressure on the bitumen market in various countries.

Insight by Razieh Gilani from Infinity Galaxy

During the past week, Iran’s bitumen market passed a slow trend because of demand fall in India and China, the fragile stability in Europe, and a relative fall in Iran.
In such an environment where many players are uncertain, Infinity Galaxy helps its clients make confident decisions and continue their export journey through precise analyses and international communications.

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