Weekly Bitumen Report: Shadows of Another Financial Crisis on the Market

Xi Jinping’s travel to Russia increased the possibility of peace mediation between Russia and Ukraine. Formerly, China had mediated between Iran and Saudi Arabia to restart their relations. Still, it is not clear whether these negotiations will lead to peace or not.

In the meantime, the continuation of the financial crisis in the USA led to unity among the central banks of 6 countries to strengthen the USD value in the international financial system. In the statement of the Bank of England, the names of the Bank of Japan, Bank of Canada, European Central Bank, Federal Reserve, and Swiss National Bank have been mentioned. This integrated action of the 6 countries took place with the purpose of reducing the pressures on global credit markets and minimizing the negative consequences of these pressures on the credit supply of businesses and families.

As a result of the integrated action of the banks, oil prices reached 76 USD. However, the fear of another financial crisis like 2008 led to the stability of oil prices in the channel of 70 USD although America cautiously increased the interest rates by around 0.25% to control inflation.

It is not clear if the joint action of central banks and making loans can prevent the recession.

Although Joe Biden guaranteed to support the banking systems of the country, last week, the stock of global banks decreased as a result of the fall in Silicon Valley Bank in America.

After the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank also faced issues.

In another agreement supported by the Switzerland government, UBS Bank Switzerland accepted to purchase Credit Suisse Bank and hence the two old competitors were unified.

After the restoration of ties between Iran and Saudi Arabia, Iran is attempting to improve its political relations with other countries such as UAE and Iraq. More time is needed to see the effects of these political improvements on the equity of the US dollar against the Iran Rial.

During the last 3 days, Singapore’s HSFO CST180 faced severe changes. On Monday, it decreased to around 20 USD and on Tuesday, it recovered with a surge of 18 USD which is a sign of confusion in the market. At the same time, bulk bitumen prices in Singapore and South Korea reached 480 and 425 USD respectively.

Bahrain’s bitumen price remained unchanged in the range of 325 USD.

Iran market is spending the New Year holidays and before that, the fall of USD value against the Iran Rial had led to a serious increase in bitumen prices, during the New Year holiday, the market stopped and the prices remained stable in their previous ranges. It seems that by the end of the holiday, the effects of new incidents can be observed on the Iran market.

Despite the current crisis, it seems that India will face another increase in bitumen prices on the first of April and after the increase of 13 USD in mid. March. The reason can be shortages of bitumen stock in India.

Considering the New Year holidays in Iran as one of the biggest bitumen producers in Asia and different regional and global crises, it is recommended that market activists follow the updates and changes in markets closely to make the wisest business decisions.

Infinity Galaxy wishes Happy New Year to everyone who celebrates Nowruz, the arrival of spring.

This article was prepared by Razieh Gilani, the export manager of Infinity Galaxy (www.infinitygalaxy.org).