Weekly Bitumen Report: How Might Israel- Hamas War Affect Bitumen Market?
On Saturday, 7 October, all the equations and balance of powers in the Middle East were disrupted by the attack of Hamas on Israel. The attacks had serious impacts on the world, not only the region. The first impact was the surge of crude oil prices within the last days as the significant military conflicts between the forces of Israel and Hamas led to deepening of political unreliability throughout the Middle East.
The analysts of ANZ believe that the increase of geopolitical risks in the Middle East should support crude oil prices and higher fluctuations can be anticipated.
In the meantime, on Tuesday, it was heard Ashkelon oil terminal of Israel shut in wake of the escalation of disputes. Simultaneously, Qatar threatened to stop the export of gas to the countries of the world if the bombing of Gaza does not stop. Besides, JP Morgan claimed that supply could be disrupted if the US intensifies restrictions on Iranian oil exports or if disruptions spread to the Strait of Hormuz.
On the other hand, China is attempting to raise its budget deficit to unleash new round of stimulus to create economic growth.
It is heard that Chinese politicians are investigating the issuance of at least one trillion Yuan (equal to 137 billion dollars) debt of the new government for infrastructural costs such as water projects. The experts believe that an announcement might be published by the beginning of this month. Although the negotiations are going on and the government plans might change, these new incentives may lead to more growth in the global markets.
In the first days of the week, Singapore’s HSFO CST180 increased 22 USD and reached 452 USD which was an expected event considering the surge in crude oil price. On Wednesday, 11 October, Singapore’s bulk bitumen increased 2 USD and it reached 522 USD. South Korea’s bitumen price was stable at 430 USD. Bitumen price in Bahrain is still following its stable trend at 440 USD.
Bitumen prices of the European regions decreased to the range of 450-530 USD.
India is expecting to see 5 USD rise in its bitumen price by the middle of October by its domestic refineries. Considering the previous predictions and the fall in oil prices from 95 to 90 USD within 2 weeks, such a rise in bitumen price can be a sign of a better level of demand from India.
The increase of US dollar equity against Iran Rial and severe fluctuations of the market made a gap of approximately 30 USD between the lowest and highest bitumen prices in the market. But the main concern of foreign customers while dealing with Iran is the changes in the region and their effects on loading and sending cargoes, but fortunately, these developments have not affected export procedures in the Persian Gulf.
This article was prepared by Razieh Gilani, the export manager of Infinity Galaxy.
