Mideast bitumen market faces logistics challenges, Iran sanctions

14 October 2010 13:34  [Source: ICIS news]

SINGAPORE (ICIS)--Oversupply of vessel space, piracy and sanctions against Iran are all factors affecting the bitumen market in the Middle East, an official with Richmond Mercantile said at an industry conference on Thursday.

Many of the bitumen vessels in the Middle East and African region are small, old and no longer optimum for trading, making it necessary to phase out older vessels in order to improve fleet utilisation, said Allen Pinto, general manager of Richmond Mercantile.

He was speaking at Conference Connection’s bitumen conference in Singapore.

“Nearly 40,000 tonnes of vessel space is available in the region, more than double what is required,” he added.

Piracy is also growing concern to bitumen buyers and sellers, Pinto said, referring to the bitumen vessel MT Asphalt Venture, which was hijacked off the coast of Tanzania on 28 September and its crew of 15 have been held hostage since then.

As the bitumen markets in the Middle East and India also depend on Iran for consumption, the recent UN, EU and US sanctions against the country have hurt business, he added.

He estimated the size of the Middle East’s key bitumen markets as follows: demand in the United Arab Emirates (UAE) is around 30,000 tonnes/month; in Oman it is around 15,000 tonnes/month; and in Qatar it is around 100,000 tonnes/year.

Iran is a major bitumen producer in the region, with output in 2009 of around 4m tonnes and exports totalling 1.1m tonnes, mostly to the Middle East and Africa.

The conference runs from 14-15 October.

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By: Anu Agarwal
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