Weekly Bitumen Report: Diplomacy in Tehran & Moscow, Middle East on Alert: Oil Hits High

Diplomacy Amid War: Energy Markets Caught Between Hopes for a Deal and Military Threats

During the week ending October 22, the Middle East once again became the center of global political and economic developments. While the US and Israel continued security consultations regarding Iran amid growing concerns over further military strikes, Pakistan and Qatar maintained their mediation efforts to ease tensions between Tehran and Washington. The October 20 meeting between the Iranian President and Pakistan’s Army Chief signaled renewed diplomatic engagement, although major disagreements remain unresolved and there is still no clear indication of an imminent agreement.

During the same week, the Russian Foreign Minister’s visit to Tehran and Vladimir Putin’s meeting with US Special Envoy Steve Witkoff highlighted Russia’s active role in regional diplomacy. These developments took place while the Russia-Ukraine war continued. Meanwhile, the announced shipment of 40,000 metric tons of Russian diesel to the United States on October 22 pointed to limited and unusual energy cooperation between the two countries. Despite its economic significance, this development does not necessarily indicate an easing of broader political differences between Moscow and Washington.

In contrast to these diplomatic efforts, attacks on commercial vessels in the Persian Gulf and the Gulf of Oman, Houthi threats against Saudi energy infrastructure, and the US decision to withdraw some diplomatic personnel from the region heightened global market concerns. Rising insurance risks, restrictions on vessel movements, and potential energy supply disruptions have kept international trade costs elevated. Under these conditions, oil and bitumen markets face two opposing scenarios: lower prices if negotiations advance, or further pressure on supply and shipping if hostilities escalate.

Brent Crude Oil Surges Toward $112: Supply Risks, Not Demand Growth, Drive the Rally

Brent crude oil approached $112 per barrel on October 20, reaching its highest level in approximately five months. News of Pakistan’s mediation efforts pushed prices back toward $108 by the end of the day. However, continued military tensions and declining US crude inventories provided renewed support. By Thursday morning, October 22, Brent was trading around $110 per barrel.

Three factors drove this week's volatility: rising geopolitical risks in the Middle East, threats to crude oil and refined product supplies, and a decline of approximately 3.06 million barrels in US crude inventories. These factors have supported higher prices despite insufficient evidence of a corresponding surge in global demand. Much of the current oil price increase therefore reflects a supply-risk premium, which could adjust rapidly if diplomatic negotiations make meaningful progress.

Singapore and South Korea Bitumen: Tighter Supply Meets Growing Buyer Resistance

Singapore's bitumen market maintained its upward trend from previous weeks, with prices reaching approximately $835/MT, representing a weekly increase of $12/MT. Restricted refinery feedstock availability and limited export cargo supply continued to support prices. However, Southeast Asian buyers, particularly in Indonesia and Vietnam, have increasingly resisted higher offers.

In contrast, South Korean export bitumen prices declined to approximately $800/MT, reflecting a weaker weekly average. Lower buying indications from China suggest that further price increases in East Asia may face growing resistance.

India Bitumen Market: Fourth Price Increase Across September and October

India's domestic bitumen market recorded four rounds of price increases during September and October, with adjustments introduced at the beginning and middle of each month. According to the latest Indian refinery price announcements in mid-October, VG30 bitumen increased by approximately $75/MT, while VG40 rose by around $85/MT.

Despite higher refinery prices, Indian demand remains uneven. The resumption of road construction activities following the monsoon season is supporting consumption, but elevated prices and financing constraints have discouraged nonessential purchases.

China Bitumen Market: Domestic Prices Retreat as High Import Costs Limit Buying Interest

Unlike the upward trend across much of Asia, China's domestic bitumen market showed signs of a price correction in mid-October. November bitumen futures on the Shanghai Futures Exchange appeared to decline, reflecting weaker seasonal demand in northern China, increasing competition among suppliers, and reduced interest in building inventories.

European Bitumen: Prices Rise Despite Weak Demand

In Europe, rising HSFO prices and refinery supply constraints pushed bitumen export prices higher. FOB bitumen prices across major European ports ranged from approximately $605 to $630/MT.
In Bahrain, bitumen export prices remained unchanged at $550/MT. Shipping restrictions through the Strait of Hormuz continued to limit seaborne export activity, while Bahrain's listed bitumen price has remained stable for more than a year.

Iran Bitumen: Rising Prices in a Market Where Delivery, Not Sales, Is the Main Challenge

Iran's bitumen market faced additional pressure this week following reports of three container vessels sinking and further restrictions on port operations. Although higher feedstock costs supported bitumen prices, shipping disruptions continued, and escalating tensions in the Persian Gulf created additional challenges for exporters.

Maintaining exports through road and rail corridors could help ease some of these pressures, but fully replacing maritime routes remains difficult. For Iranian exporters, preserving delivery reliability and managing contractual risks have become more important than competing solely on the lowest price.

Insight by Razieh Gilani, Infinity Galaxy: Prices Are Rising, but Demand Growth Remains Uncertain

The global bitumen market in the third week of October 2026 was driven more by geopolitical risks, refinery supply constraints, and higher energy costs than by broad-based demand growth. India faced repeated domestic price increases, Singapore continued to struggle with limited supply, and European markets remained under pressure from higher fuel oil prices. In contrast, China's market correction and weaker buying interest affecting South Korean exports suggest that the potential for further price increases varies significantly across regions.

For Iran, the situation is more complex. Higher global prices do not necessarily translate into stronger export opportunities unless reliable shipping, payment collection, and delivery can be secured.

Today's market is no longer trading on product prices alone. The ability to execute and fulfill a contract has become an essential part of its real commercial value.