Weekly Bitumen Report: Persian Gulf Tensions Drive Oil Price Increases and Support Bitumen Market Growth

The Political and Economic Developments of the Week

The Middle East in a State of “Costly Deterrence”; Activation of Premium Risk in the Energy Market

Between January 22 and January 29, the Middle East moved along the edge of a controlled confrontation. The deployment of the USS Abraham Lincoln aircraft carrier along with its strike group, and the presence of U.S. destroyers such as USS Mitscher and USS McFaul in the Persian Gulf and the Sea of Oman, clearly increased the level of risk.

Tehran, through missile deterrence signals and warnings about targeting U.S. and Israeli bases in the Persian Gulf, effectively conveyed that a cost-free strike scenario is not on the table. At the same time, the pattern of “war under pressure” between Israel and Hezbollah along the Lebanese border continues, and given Beirut’s official complaint to the United Nations, Israel’s northern border has effectively entered a semi-war status. Risk coverage and the most pessimistic scenarios for pricing under current Middle East conditions have been activated.

Crude and Fuel Oil Markets in East Asia

$68 Oil and Premium Risk; Energy Market Pricing Ahead of War

Brent crude oil prices reached around $68 on Thursday, January 29. This increase in oil prices was not driven solely by fundamental factors; the risk of escalating tensions and even a potential conflict between the United States and Iran has directly entered market calculations.

The high sensitivity of critical supply routes in the Persian Gulf and the Strait of Hormuz led the market, even without the outbreak of war, to price in part of the supply disruption scenario in advance, placing a sustained premium risk on prices.In the base scenario, the continuation of the current level of tension and OPEC+ supply management keeps oil in the $65-$70 range.

In the bullish scenario, any limited clash or security disruption could quickly push prices above $70. Only in the bearish scenario- meaning a significant reduction in tensions and a decline in geopolitical risk- is there room for price correction and a return to lower levels.

On Thursday, the price of CST180 fuel oil in Singapore reached $399, while Singapore bitumen prices and South Korean bitumen prices reached $395 and $347, respectively.

According to reports, the East Asia market remains shallow and cautious, and Brent’s rise to $68 currently plays more of a role in building a price bottom than acting as a driver of stable price growth, although it has gradually pushed prices upward.

Bitumen Market in Bahrain and Europe

Price Increases Driven by Oil; Europe Moves Ahead of Demand

Bahrain bitumen prices have remained unchanged around $400; however, prices in the European market are fluctuating between $340- $360. According to reports, price increases in the Mediterranean and Europe are driven directly by the supply side-namely oil and fuel-rather than demand.

The risk of higher Brent prices and Middle East regional tensions is fully reflected in these price increases, and if Brent moves above $68 and remains there, market models show that prices will respond upward more quickly, although trading volumes will remain weak.

India Bitumen Market

India in a Waiting Phase; Oil Has Risen but the Market Has Not Yet Decided

The Indian market shows that it remains under seasonal pressure, despite an increase in purchasing activity, and the impact of oil risk has so far remained limited. Rising Brent prices have prevented sellers from retreating, but no strong bullish signal is yet visible.

In the event of intensified tensions and higher freight costs, the upward impact will enter the market with a delay.

China Market

China Between Price Testing and Inventory Management; Bottom Prices Being Redefined

Unlike previous weeks, the Chinese market has seen a relative improvement, and a limited number of projects have begun operations, but the market is still in a price-testing phase.

The risk of higher Brent prices acts conditionally in this market

if Brent stabilizes above $68, the bottom price of Chinese bitumen will be set higher; otherwise, the focus will return to inventory management.

Market Analysis of Iran

Iran at the Intersection of Risk and Demand; Prices Rise, but Export Commitment Execution Is Decisive

In Iran, despite the high risk of tensions in the Middle East and an unprecedented increase in the dollar exchange rate, bitumen prices continue to rise, and the average price of Iran’s exported bitumen has increased this week compared to last week. Previous problems related to exports have not yet been resolved, but demand for purchasing has increased.

Insight by Razieh Gilani from Infinity Galaxy:

The rise in Brent crude prices to the $68 range is not merely a price fluctuation; it signals the entry of the energy market into a risk-based pricing phase-one in which, even without the outbreak of war, supply disruption scenarios are pre-priced into the market.

Under such conditions, the bitumen market also gradually moves away from the logic of “lowest price” and toward selecting suppliers that offer execution capability, operational stability, and real commitment. At this point, the lowest number on paper is not a competitive advantage; what gains value is trust in a brand that remains present under high-risk conditions, is responsive, and can deliver, even at a higher cost. This is the point at which professional brands separate themselves from opportunistic sellers.