Bitumen prices in Iran have significantly increased due to recent political changes and a shortage of vacuum bottom supply.
Following the assassination of a Hezbollah leader and an Iranian general in Israeli airstrikes, Iran retaliated by launching over 200 ballistic missiles at Israel on October 1. These missiles were tracked by the U.S., the U.K., France, and Israel’s Iron Dome defense system, though many hit targets within Israel. In response, Israel announced it would retaliate, though most analysts predict that any military action from Israel is unlikely in the short term.
This attack has further escalated tensions in the Middle East, with flights being cleared from the region’s skies and Houthi forces from Yemen attacking two Panama-flagged commercial ships. The ongoing conflicts have intensified the regional crisis.
On October 2, Israel launched a ground incursion into Lebanon, advancing up to 400 meters and conducting severe drone strikes across various regions of the country.
These events dominated the discussions during the U.S. presidential debates, where candidates largely focused on supporting Israel and analyzing regional developments.
Meanwhile, Libya began normalizing conditions for oil exports from two of its key oil fields. At the same time, Hurricane Helene is ongoing in the U.S., and mixed reports are emerging on the impact of China’s largest economic stimulus package. All of these factors have left the direction of oil prices uncertain despite rising tensions in the Middle East.
According to The Wall Street Journal, the Saudi Energy Minister warned that if some OPEC+ members exceed their agreed production quotas, global crude prices could drop to $50 per barrel. However, the intensifying Middle East tensions have raised concerns that prices could instead surge above $80.
As of Thursday, crude oil prices reached $77 per barrel. Singapore’s 180CST fuel oil experienced a significant rise, closing at $448. Bitumen prices in Singapore and South Korea reached $529 and $445, respectively, while Bahrain’s bitumen prices remained steady at $395. In Europe, bitumen prices ranged between $390 and $470.
On October 1, Indian refineries unexpectedly reduced their bitumen prices by around $4, despite expectations of price increases following the end of the monsoon season and the anticipated surge in new orders.
In contrast, bitumen prices in Iran sharply rose due to recent political developments and a shortage of vacuum bottom feedstock. Over the past week, Iranian refineries have competed aggressively for vacuum bottom supplies, with bids averaging a 20% increase—a record high for the past year.
If tensions in the Middle East continue to escalate and China’s economy strengthens, bitumen prices are expected to rise even further.
