Given the current oil market conditions, with crude prices hovering between 75-80 USD and the Iran Rial holding steady against the US dollar, it appears that the current FOB Bandar Abbas prices are at their optimal and most affordable level.
The announcement of a reduction in the oil and fuel reserves of the United States, coupled with the cautionary statement made by the Minister of Energy of Saudi Arabia, resulted in a modest uptick in the price of crude oil. However, Brent oil was unable to surpass the threshold of 80 USD.
During the recent Qatar economic forum, the presentations delivered by the leaders of Qatar and Saudi Arabia resulted in certain modifications in the market trends. The aforementioned symposium was convened from the 23rd to the 25th of May in the nation of Qatar. As articulated by the Qatari Energy Minister, Saad Al-Kaabi, during the Qatar Economic Forum, the ameliorating conditions of a milder winter and a contracting economy constitute the sole factors that safeguarded the well-being of humanity and the European region in the present year. Furthermore, he issued a cautionary statement regarding the potential for even more dire circumstances to unfold, stating, “The worst is yet to come. “
Moreover, the Minister of Energy in Saudi Arabia issued a cautionary warning to potential speculators, indicating that they will encounter significant financial losses akin to those experienced in April. The subject conveyed their lack of expertise in the game of poker, stating that they were not a player thereof. However, they advised caution to their purported interlocutors.
Alternatively, in accordance with the Bank of America’s forecast, it is anticipated that the price of oil will ascend to 90 during the latter half of 2023.
According to Blanch, who is the head of commodities research at Bank of America, it is likely that the price of oil will surpass $80 during the latter half of the year, and could potentially reach $90. This forecast is based on the projected increase in the deficit within the next six to nine months. Blanch made these statements during an interview with “Bloomberg Surveillance Early Edition” on Friday.
Meanwhile, the modest energy requirement of the second global economic powerhouse served as an additional factor contributing to the marginal increase in oil prices, albeit with a noticeable improvement in overall circumstances as compared to prior instances.
Over the initial two days of this current week, the Singapore HSFO CST180 experienced an approximate rise of 2 USD, while its bulk bitumen reached a value of 490 USD with an increase of merely 5 USD. Such fluctuations in pricing reflect the current state of the market.
The bulk bitumen of South Korea was exchanged at a value of 415 USD. It is the position of subject matter experts that the marginal upturn in the bitumen cost within the nation of South Korea was attributable to a decline in the corresponding bitumen price in the domestic market of China.
A decline in bitumen prices across the Middle Eastern region
The price of bitumen in Bahrain remained constant at a value of 375 USD for an additional week. Following an 8 USD decline in the price of bitumen in India, a consequential shift in the prevailing conditions has been envisaged within the country. It is anticipated that a more substantial reduction in bitumen prices will transpire on June 1st, coinciding with the advent of the monsoon season.
On May 22nd, the base price of vacuum bottoms experienced a decline of approximately 2% within the Iranian market, simultaneously registering an average competitive rate of 70%. These observations signal the presence of significant market pressures aimed at driving down prices. Intending to enhance their business opportunities in alternative markets, the exporters anticipate a rise in demand by refraining from targeting the Indian market.
Given the prevailing crude oil prices that fall within the range of 75-80 USD and the relative stability of the Iran Rial against the US dollar, the current FOB Bandar Abbas prices appear to have attained an optimal and most competitive level.
