Bitumen prices in Iran have increased due to refinery competition, heat waves in the Persian Gulf, reduced port hours, and congestion at key ports. Potential regional tensions may push prices up further.
In the past week, three European presidents voiced their concerns over the escalating tensions in the Middle East through a joint statement. They urged Iran to refrain from any retaliatory actions against Israel to prevent jeopardizing the fragile peace process. However, fears of a potential Iranian attack on Israel are growing by the day.
Meanwhile, Hamas has declared that they will not participate in the peace talks with Israel scheduled to take place in Qatar on August 15.
On a different front, two years into Russia’s war against Ukraine, Ukrainian forces have made advances in Russia’s Kursk region. The neighboring Belgorod region has also declared a state of emergency. Ten days ago, Ukrainian troops launched a surprise operation in Kursk, marking a significant escalation in the conflict.
At the same time, concerns about an impending economic recession in the U.S. were tempered by positive news on Thursday, August 8. The American stock market had its best day since November 2022, driven by an unexpected drop in unemployment, which eased worries about a sluggish economy. Asian markets also recovered partially, bouncing back from some of their previous week’s losses. However, Japan’s stock market remains under pressure, experiencing its worst downturn since 1987.
According to Reuters, crude oil prices have risen following a report on declining U.S. oil reserves and growing concerns about escalating tensions in the Gaza Strip, which could impact the global oil supply.
Danish Lim, an investment analyst at Phillip Nova, noted that the American Petroleum Institute (API) reported a significant drop of 5.2 million barrels in U.S. crude oil reserves, far exceeding the predicted 2 million barrels. The API data also indicates strong oil demand.
Lim added that geopolitical risks remain high, with any potential escalation in the Middle East likely to drive crude oil prices higher in the coming weeks.
Furthermore, on August 14, ANZ Institute warned that an expanded conflict in the Middle East could threaten the passage of oil through the region’s strategic chokepoints, potentially disrupting the daily supply of over 20 million barrels. However, the International Energy Agency (IEA) has lowered its forecast for crude oil demand growth in 2025, citing China’s economic slowdown as a key factor.
On August 15, Brent crude oil closed at $79.93, marking a rise of around $2 since the start of 2024. In Singapore, 180CST fuel oil reached $468. Bitumen prices in Singapore and South Korea were recorded at $489 and $415, respectively. Last week, bitumen prices in Bahrain dropped to $420 following a $30 decline. In Europe, bitumen prices ranged between $420 and $490. In India, bitumen prices are expected to remain stable, with no significant changes anticipated at the refineries.
Bottom Line
In Iran, bitumen prices have increased due to competition among refineries, ongoing heat waves in the Persian Gulf, reduced working hours at the ports, and congestion at Bandar Abbas and Jebel Ali. Any further escalation in regional tensions could push bitumen prices even higher.
