The week started with the common challenges between the USA and Iran. The USA agreed that Korea releases $7.5 million of Iran’s blocked debt. The release could have affected the drop of USD value against Rial, but at the same time, the USA army attacked Iran bases in Syria with the airstrikes.
Indian refineries decreased bitumen price by about $8 while furnace oil increased to $22/MT, and by 16 March, it is predicted that bitumen price will decrease more.
Iran is also expected to increase the vacuum bottom price in the second half of the month by about 3%. It will be announced on 6th March.
Iran parliament decided to remove tax exception on bitumen export from 21 March 2021. However, the proposal has not been approved yet. If the parliament accepts the new law, we will see an increase in bitumen price.
Fluctuations of the oil market are still the hottest topic of the current market. Nobody knows where the market goes. The Secretary-General of OPEC, Mohammed Sanusi Barkindo, warned about a severe fall in the oil market due to a new wave of coronavirus that will affect the demand. He believes that currently, we have a logical balance between supply and demand, but any new wave and reoccurrence of the COVID-19 outbreak will result in a drop in oil price, like last year.
Moreover, we cannot neglect the positive progress of vaccination in the US which has also increased oil price recently.
The meeting of OPEC+ was held on 4 March in Switzerland. The market expected oil production to be increased up to 1- 1.5 million barrels per day by the end of this meeting but till the latest hours of preparing this report, OPEC+ could persuade Saudi Arabia to stop the increase of 1.5 million barrels produced in each day up to mid-April, as a result of this decision, Brent Crude Oil jumped to 67$ and supply level of oil got stable at the same previous level. So, concerning the increase of bitumen prices in Iran, it does not seem possible India will decrease the price once again in March.
Also, the three European countries i.e. France, England, and Germany that proposed a resolution against Iran in IAEA, retreated from their decision. Furthermore, based on some authentic news, Infinity Galaxy reported that the possibility of returning to JCPA by the USA and Iran is more likely to happen by the next week that can have a significant effect on USD value and bitumen price accordingly.
Consequently, March will be determining for the bitumen market. If we have an oversupply, bitumen price and other petrochemicals will decrease relatively. Otherwise, we shall see how the supply and demand drive the market.
