Weekly Bitumen Report: Israel’s Military Attacks on Iran, Sore in Bitumen Market

The Political and Economic Developments of the Week

A direct military attack by Israel on Iran occurred at midnight on Friday, June 13, with missile strikes hitting hundreds of locations in Iran, resulting in the deaths of many civilians and military and political officials. These attacks caused the price of Brent crude oil to rise above $74 within a few hours.

According to reports, Israel launched military incursions into various cities in Iran in six waves, while Iran simultaneously fired hundreds of drones toward Israel.

Meanwhile, some American media outlets claimed that Trump’s 60-day deadline for an agreement with Iran expired on Thursday, June 12.

The sixth round of negotiations between Iran and the United States was scheduled to take place in Oman on Sunday, June 15, but Iran’s decision to participate in these talks remains uncertain given the recent events.

Following Israel’s military aggression against Iran, the value of the dollar strengthened in the U.S., oil prices increased by 10%, and gold prices also rose. It seems that as the situation in the Middle East becomes more complicated, all news will be overshadowed by these developments.

In the latest updates, the air defense systems of six countries in the Middle East have been put on high alert, and many flights in the region have been canceled.

Crude and Fuel Oil Markets in East Asia

Considering the rise in international tension, crude oil reached $75.70.17 on June 13. Singapore’s 180CST closed at $451. The bitumen prices in Singapore and South Korea both traded at $407 and $400, respectively.

Bitumen Market in Bahrain and Europe

After several months of price stability in Bahrain, its bitumen price increased to the level of $400. However, the range of bitumen prices in Europe remained stable at $400-460.

India Bitumen Market

Indian governmental refineries kept the VG-30 rate stable this week after a symbolic increase at the beginning of June, while they reduced the VG-40 rate by only 2 dollars. The earlier-than-expected rains slowed down the construction projects and minimized the purchase of bulk bitumen and there is no further sign of bitumen price surge.

China; Price Locked at 3,390 Yuan

The FOB bitumen price in South China remained between 3,380 and 3,390 yuan this week. The shutdown of two factories slightly reduced supply, but the rainfall after the Dragon Boat Festival kept asphalt demand low. The profit margins for independent refineries are still positive but minimal, and a significant price increase is unlikely to be seen until late summer.

Market Analysis of Iran: Rising Concerns Following Israel’s Military Attack

In Iran, concerns are growing over the lack of an agreement between the U.S. and Iran, leading to an increase in the dollar’s value against the rial. Israel’s midnight attacks on Iran on Friday are expected to complicate the situation further in the coming week. Simultaneously, issues in the bitumen production sector, coupled with the onset of a new heat wave in Iran, have slowed down export processes. Over the last week, the supply of vacuum bottom was estimated about 120K MT, however, the potential demand was more than double. Considering the surge in crude oil prices, we should expect the same uptrend in Iran bitumen market.

However, with rising oil prices and the new conditions, an increase in bitumen prices in Iran is anticipated.

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

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