Rising sea freight rates and fierce market competition are worrying exporters and importers globally.
In his recent remarks, President Joe Biden openly criticized the performance of Israeli Prime Minister Benjamin Netanyahu, condemning his disregard for “innocent lives” as detrimental to Israel. Biden announced plans for the US military to establish a pier off the coast of Gaza during the recent annual congress, aiming to significantly boost humanitarian aid deliveries to the region, with the goal of exceeding a hundred trucks per day. Nevertheless, the ongoing disagreement regarding a ceasefire preceding the Ramadan month and the failure to alleviate tensions in the Middle East remain primary contributors to casualties and the escalation of crude oil prices.
Meanwhile, Saudi Arabia’s petroleum giant, Aramco, projected a favorable growth trajectory for oil demand in China and outlined plans for increased investment in the country. Concurrently, China unveiled its economic blueprint for 2024, targeting a 5% economic expansion. Nonetheless, certain Western analysts criticized China for offering limited economic data.
On Wednesday, March 13, Reuters noted a surge in oil prices due to optimistic forecasts regarding global crude oil demand from both China and the USA. Despite lingering signs of inflation in the US, the likelihood of interest rate cuts remains unaffected and is expected to decrease in the coming months.
Simultaneously, OPEC and the International Energy Agency (IEA) presented divergent perspectives on oil demand. In February 2024, the IEA forecasted a rise to 1.22 million barrels per day for 2024, whereas OPEC’s February report anticipated an increase to 2.25 million barrels per day. This discrepancy represents approximately a 1% variance in global demand and marks the first notable disagreement between these two organizations in the past 16 years.
On Thursday, Brent crude oil climbed to 84 USD, yet it has not surpassed the range of 80-85 USD. Meanwhile, Singapore’s 180 CST rose by 3 USD, reaching 466 USD, while Singapore’s bulk bitumen decreased by 5 USD, closing at 410 USD. Bitumen prices in South Korea and Bahrain remained steady at 400 USD and 360 USD, respectively.
Bitumen prices in Europe stabilized within the range of 430 to 490 USD.
India is expected to experience a 7 USD decrease on March 15.
Rising sea freight rates to various destinations, coupled with fiercely competitive market conditions, have heightened concerns for exporters and importers in both countries.
Conclusion
Despite stable prices during the final working week of the year and the initial week of Ramadan, Iran continues to feel significant export pressure. Challenges such as climatic disruptions, vessel arrival delays, concerns over restricted holiday traffic, and rising port costs have all posed obstacles to exports.
This article was prepared by Shirin Yousefi, the Content specialist and market analyst of Infinity Galaxy
