On October 7th, the Middle East saw a significant disruption in its political landscape when Hamas launched an attack on Israel. The repercussions of this event extended beyond the region and had a global impact. Notably, crude oil prices surged in response to the escalated military conflicts between Israel and Hamas, contributing to increased political instability in the Middle East.
According to analysts at ANZ, this rise in geopolitical risks in the Middle East is expected to bolster crude oil prices, leading to anticipated fluctuations. In the midst of these developments, the Ashkelon oil terminal in Israel was temporarily closed due to the escalating disputes. Simultaneously, Qatar threatened to halt gas exports worldwide unless the bombings in Gaza ceased. Furthermore, JP Morgan warned of potential supply disruptions if the United States increased restrictions on Iranian oil exports or if disruptions spread to the Strait of Hormuz.
Meanwhile, China is seeking to stimulate its economic growth by increasing its budget deficit. Chinese officials are considering issuing approximately one trillion Yuan (equivalent to 137 billion dollars) in government debt to fund infrastructure projects, including water-related initiatives. While negotiations are ongoing and government plans may evolve, these new incentives have the potential to stimulate global markets.
In the first few days of the week, the price of Singapore’s HSFO CST180 rose by 22 USD, reaching 452 USD, in line with the upward trend in crude oil prices. On October 11th, Singapore’s bulk bitumen increased by 2 USD, reaching 522 USD.
South Korea’s bitumen price remained stable at 430 USD, while Bahrain’s bitumen price continued its steady trend at 440 USD. Bitumen prices in European regions decreased to a range of 450-530 USD.
India is anticipating a 5 USD increase in its bitumen price by mid-October from domestic refineries. Despite the recent drop in oil prices from 95 to 90 USD over two weeks, this increase in bitumen price suggests a potentially higher demand from India.
The fluctuating market and the strengthening of the US dollar against the Iranian Rial have resulted in a price gap of approximately 30 USD between the lowest and highest bitumen prices in the market. Foreign customers remain concerned about regional developments and their impact on cargo loading and shipment, although, fortunately, these concerns have not yet affected export operations in the Persian Gulf.
This article was prepared by Shirin Yousefi, the Content specialist and market analyst of Infinity Galaxy