The price of vacuum bottom in Iran decreased by 7% on August 5 due to the rising dollar rate against the rial and concerns over regional crises; however, bitumen prices did not decline significantly.
Efforts by the international community to de-escalate tensions between Iran and Israel in the Middle East have so far failed to yield positive results. Iran, viewing retaliation against Israel as its right, remains defiant. On August 8, reports surfaced about a potential Iranian missile strike on Israel within hours, prompting several regional countries to clear their airspace of flights. Many international airlines have also suspended flights to Middle Eastern destinations.
Tensions in the Middle East have reached their highest point since October 2023, with threats from regional powers intensifying. Meanwhile, on August 2, the U.S. announced a rise in unemployment for the fourth consecutive month, marking the longest streak since the 2008 financial crisis. This trend triggered concerns, leading to the invocation of the “Sahm Rule,” an economic indicator signaling a potential crisis in the U.S.
These concerns rippled through global markets. On August 5, Japan’s Nikkei stock market suffered a massive crash, losing over 10% of its value in a single day—the steepest drop in 13 years—forcing an early closure of the Tokyo stock market. China’s markets also hit, with commodities falling between 3% and 6%.
In the U.S., the stock market opened on the same day with a sharp decline, wiping out more than $2 trillion in value within the first 15 minutes. Crude oil prices plunged to an eight-month low. However, rising unrest in Venezuela following recent elections, escalating anti-immigration riots in England, and heightened tensions in the Middle East helped crude oil prices rebound to around $78 per barrel. Despite this recovery, concerns about a looming economic crisis persist in both the U.S. and China, the world’s two largest economies.
Analysts at ANZ Australian Bank noted that escalating tensions in the Middle East could disrupt crude oil exports, potentially driving higher prices. As of August 8, Brent crude oil was priced at $78 per barrel, while Singapore’s 180 CST stood at $453. Bitumen prices in Singapore and South Korea were $492 and $415, respectively. In Bahrain, bitumen prices remained steady at $450, though some sources suggest a potential $30 drop. European bitumen prices fluctuated between $430 and $490. India’s bitumen market showed improvement after a $25 increase on August 1, but fears of a global economic crisis have left some traders cautious.
Conclusion
On August 5, the price of vacuum bottom in Iran fell by around 7%. However, the rising dollar against the rial and concerns over regional instability prevented a significant drop in bitumen prices. Additionally, the unprecedented heatwave in the Middle East has led to repeated shutdowns in Iran, further complicating export operations. Transport conditions and congestion at the ports of Bandar Abbas and Jebel Ali remain challenging.
