Following a four-month downturn, Iran’s bitumen market saw increased competition for vacuum bottom purchases last week, possibly signaling the start of a price increase rally.
Reuters stated that at the World Economic Forum in Davos, Fatih Birol announced that the International Energy Agency foresees a balanced oil market this year, despite Middle East tensions, due to supply boosts and a slowdown in demand growth. Consequently, crude oil prices dipped on January 22, influenced by adverse economic factors affecting global oil demand, diminished geopolitical tensions in the Middle East, and an assault on a Russian fuel export facility.
Ukraine’s drone attacks disrupted operations at a Russian fuel export terminal owned by Novatek in the Baltic Sea. Meanwhile, Libya’s National Oil Corporation ended force majeure on the Sharara oil field, the country’s largest, restarting production following a two-week pause due to protests. These developments could partly offset each other’s impacts.
Nevertheless, the ongoing Middle East crisis remains the primary determinant of energy prices. On January 25, crude oil surpassed 80 USD once more, yet resistance persists around 82 USD. Meanwhile, Singapore’s HSFO CST180 decreased by 7 to 430 USD, while the bitumen price dropped by 8 to 436 USD, with expectations of an upward trend in the final two days of the week. South Korea’s bitumen price stood at 385 USD.
The price of bitumen in Bahrain has remained steady at 400 USD for a minimum of three months. In Europe, bitumen prices experienced fluctuations within the range of 360 to 410 USD due to the onset of the cold season. African markets saw a notable increase in bitumen prices, primarily driven by higher transportation costs.
Bitumen Market in Iran
There are reports indicating a forthcoming increase in bitumen prices in India starting February 1st, following two consecutive months of price declines. This development could be promising for traders in both India and Iran.
Following four months of complete stagnation in Iran’s bitumen market, a notable development occurred last week with a 13% increase in competition for vacuum bottom purchases. Should this trend persist among refineries, it suggests the beginning of a price uptrend in Iran. However, rapid price hikes are not anticipated. Hence, the forthcoming competition among refineries in the coming weeks will be a crucial factor in determining the trajectory of the bitumen market.
