Weekly Bitumen Report: Market Instabilities by the End of Year in Iran

On the first anniversary of Russia's war against Ukraine, President Biden had a highly secretive and secure travel to Ukraine. This visit and the wide support of Europe from Russia at the Munich Security Conference show the power of the West Party against Russia. At the same time, Russia withdrew from the nuclear treaty unilaterally on Wednesday. The side effects of these political movements on the world economy are not clear yet.

On Friday, an Israeli oil tanker was attacked in the north of the Indian Ocean which is a sign of more tension in the Middle East. The number of victims of the earthquake in Turkey and Syria is still increasing and reached over 45K people. Tajikistan came up with a strong earthquake on Thursday and it raised concerns in the Middle East after the earthquake in Turkey.

Crude oil trend which was upward faced a fall since Wednesday and brent reached 82.04 USD. Some analysts believe it to be a reaction to the news about the increase of interest rates in the central banks of different countries. However, some others believe that it is a technical trend that might be modified. On Monday, HSFO CST 180 increased by 11 USD and reached 430 USD.

In the meantime, Singapore's and South Korea's bulk bitumen reached 500 and 450 USD while Bahrain's bitumen price was still announced 325 USD. The unprecedented increase of the US dollar against the Iran Rial led to severe inflation and a sharp surge in all expenses including vacuum bottom, bulk internal transportation, ocean freight, and steel sheets. Besides, the price of Iran's vacuum bottom increased by around 3.5% on 20 February. However, the refineries competed for over 75% to purchase VB.

Although Iran Central Bank announced new decisions to create a new centre of currency exchange, the exchange rate has not been controlled yet and it seems that export markets do not see any stability.

Approaching the end of the Iranian year and the current instabilities have led to more confusion in the market and it is suggested that buyers follow market changes more wisely to avoid any delay in receiving their orders.

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