During the previous week, the Iran Mercantile Ex- change (IME) reported a total supply of 168,000 metric tons (MT) of VB (bitumen), with demand registering at 123,000 MT. Notably, this marked a 28% decrease in demand compared to the prior week, coinciding with a 9,000 MT reduction in the supply rate. Consequently, not all of the available bitumen found buyers, contrib- uting to a weekly fluctuation rate in VB prices spanning from -3.3% to -6.5%. The drop in supply was primari- ly attributed to reduced outputs from select refineries. Among them, Tabriz VB saw the most significant de- cline, plunging by 6.5%, while the ratio between VB’s closing price and IME’s export bitumen price reached 89%. The average value of VB in the Free Market was evaluated at $276 per MT, whereas its valuation in the Center of Exchange Dollar reached $337 per MT.

In the Iran Mercantile Exchange’s (IME) export market, the available bitumen supply totaled around 77,000 metric tons (MT). This figure marked a de- crease of 1,700 MT in comparison to the preced- ing month’s average. The reduction in supply was primarily attributed to decreased offering volumes from select suppliers and production halts from Isfa- han Jey Oil Drum Bitumen, Bandar Abbas Pasargad Oil, and Pars Behin Qeshm Oil. However, despite these supplies, only 67,700 MT of bitumen demand were registered. This demand volume fell short of the available supply, resulting in no trading of the surplus. It is worth noting that considering the pre- vailing free-market exchange rate of USD to IRR at the publication date, the negotiated equivalent rates for Isfahan Jey Oil Bulk Bitumen were established at $297 per MT. Meanwhile, Bandar Abbas Pasargad Oil Bulk Bitumen was priced at $344 per MT. Fur- thermore, bitumen prices from Abadan, Tabriz, and Arak Pasargad Oil ranged between $302 and $336 per MT, reflecting the ongoing dynamics of the market.

The CEO of Iran Urban Regeneration Corporation has announced that, in compliance with the municipal organization’s directives regarding asphalt expendi- ture, a minimum of 25% of the asphalt consumption for the fiscal years 1402 and 1403 will be dedicated to addressing the needs of inefficient urban areas. Furthermore, during this meeting, a resolution was reached for the Iran Urban Regeneration Corpora- tion to furnish Geographic Information System (GIS) data pertaining to these inefficient urban areas to municipal authorities and rural districts nationwide.

The Supreme Oversight Council has assumed the role previously held by the Oversight Commission with- in the Assembly. The Chairman of the Construction Commission has clarified that this new configuration and set of regulations grant voting rights to both the heads of branches, the specialized commission, and executive authorities. This restructured Supreme Oversight Council will now be responsible for mak- ing decisions related to the allocation of free bitumen.

The Iran Trade Development Organization has de- cided to extend the deadline for meeting foreign ex- change commitments related to the year 1401 until the end of the current year. In a letter dated 09/07/1402, the organization communicated: “In light of the reso- lutions made by the Foreign Exchange Return Work- ing Group, we hereby announce the extension of the deadline for exporters to return foreign exchange earned from exports in the year 1401 until the con- clusion of the current year. It’s essential to note that this extension does not grant any tax exemptions.”

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In the preceding week, a total of 173,000 metric tons of Vacuum Bottom (VB) were offered in the Iran Mer- cantile Exchange (IME). This marked a significant in- crease of 107% compared to the previous week when 5,000 metric tons less were supplied. As a result of this surge in supply and increased demand, all the of- fered VB was successfully traded. The weekly fluc- tuation rate for VB ranged from a decrease of 7.5% to an increase of 3.7%. The surge in supplies was at- tributed to higher outputs from refineries in Tehran, Isfahan, and Abadan. Among the various types of VB, Tabriz VB saw the most significant price increase at 3.7%, contributing to the ratio between the closing price of VB and the IME’s export bitumen reaching 88%. The average value of VB in the Free Market was estimated at $258 per metric ton, while in the Center of Exchange Dollar, it reached $323 per metric ton.

In the Iran Mercantile Exchange’s (IME) export mar- ket, there was a supply of approximately 48,000 metric tons (MT) of bitumen. This supply marked a signifi- cant decrease of 37,000 MT compared to the previous month’s average. The reduced supply was attributed to a decrease in offers from various sources, including Bandar Abbas Jey Oil, Tehran Pasargad Oil, and oth- er suppliers. The demand for this bitumen amounted to 20,500 MT, which was notably less than the total available supplies. As a result, the entire amount of of- fered bitumen was not traded during this period. The fluctuation of prices was influenced by the exchange rate between the free market USD and the Iranian Rial (IRR). At the time of publication, the negotiated equiv- alent rate for Bandar Abbas Jey Oil Bulk Bitumen was set at $315 per metric ton. The prices for Bandar Abbas Pasargad Oil Bulk Bitumen and Drum Bitumen stood at $329 and $380, respectively, while the price for Arak Pasargad Oil Bitumen was $293 per metric ton.

A representative in the Iranian parliament, hailing from Semnan, has revealed a series of improvements in the bitumen supply process to governmental agencies. He went on to elaborate that these chang- es were enacted by the parliament to address con- cerns raised by the Guardian Council regarding the bitumen delivery process for the year 1402. Under the revised text, the Ministry of Oil is mandated to allocate an approximate sum of 200 trillion rials in crude oil from its reserves to the National Iranian Oil Company. This allocation will enable the com- pany to provide executive bodies with monthly sup- plies of raw bitumen, specifically vacuum bottoms, at 50% of the prevailing market price. This imple- mentation commences at the outset of the year 1402.

On the tenth day of deliberations over the Seventh Development Plan for the Islamic Republic of Iran, a significant parliamentary session was held on Tues- day, October 8, 2023. This session was conducted under the leadership of Mohammad Bagher Ghali- baf, the esteemed Speaker of the Parliament. Com- mencing the public session, prior to diving into the intricacies of the Seventh Development Plan, the par- liament members reached a consensus. This consen- sus centered around addressing concerns raised by the Guardian Council and the Supreme Monitoring Council. The proposed amendment pertained to the allocation of free bitumen to executive bodies, aiming to expedite the progress of the nation’s civil projects.

As per the president of the Natural Bitumen Miners Association, there is still no progress in establish- ing the industrial zone for natural asphalt in Gilan Gharb, despite all the emphasis and efforts made.

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Over the course of the past week, the commodity exchange saw the introduction of approximately 190,000 tons of vacuum bottom. The interesting point is that this offering generated a demand of roughly 152,000 tons, indicating a significant 40% reduction compared to the prior week. As we pay attention to the current week, we observe an addi- tional 17,000 metric tons added to the supply. Nevertheless, given the preexisting demand volume, not all of the vacuum bottom found buyers. The weekly fluctuations displayed a range from -5.4% to -0.1% change. This increase in sup- ply, as compared to the previous week, can be attributed to a surge in supply volume from refineries in Arak, Bandar Abbas, and Shiraz. The price of vacuum bottom originat- ing from the Bandar Abbas refinery registered the most notable decline, experiencing a 5.4% decrease. Further- more, the relative price between vacuum bottom and ex- port-grade bitumen in the commodity exchange, previously at 88%, ascended to 90% during this week. Considering the average dollar value of vacuum bottom, based on the free market exchange rate (reflecting the rate at the time of news retrieval), it reached $263. In contrast, relying on the market exchange rate, the average value stood at $328.

In the recent session at the Iran’s international commodity exchange, an estimated 81,000 metric tons of bitumen were put up for trade, marking a notable increase compared to the preceding week, which had seen a supply of 48,000 tons. It worth mentioning that this week’s offering was only about 600 metric tons less than the average of monthly volume. This expansion in supply can be chiefly attributed to the active involvement of significant industry players, includ- ing Isfahan Jey Oil, Bandar Abbas Jey Oil, and Pars Behin Gheshm Oil Refinery. In addition, despite the aggregate of- fering amounting to approximately 65,420 metric tons, the trading activity remained subdued, mainly due to demand not keeping pace with the ample supply. Regarding the stan- dardization of transactions in the commodity market and considering the exchange rate of the free market at the time of this report, the pricing was approximately in the range of $285 to $309 per metric ton for Isfahan Jey Oil Bulk Bitu- men. Meanwhile, Bandar Abbas Pasargad Oil was quoted at around $329 per metric ton for bulk and $379 per barrel for drum bitumen. Additionally, Arak Pasargad Oil was val- ued at approximately $287 per metric ton. The Qeshm Is- land-based Pars Behin Gheshm Oil Refinery’s bitumen was transacted at a rate of approximately $299 per metric ton.

As per the report by the Union of Petroleum Export- ers, the executive decree aimed at countering illic- it trade in goods and foreign currency has returned to its previous protocol concerning the “restriction on exporting petroleum products via flexi-tanks.”

During the past week, the Chairman of the Board of Di- rectors of the Union of Petroleum, Gas, and Petrochem- ical Product Exporters disclosed that exports from union members in the bitumen, hydrocarbon, and oil sector had reached a substantial $2.6 billion within the first six months of this year. He noted that, within the same pe- riod, the country had seen a total of nearly $22 billion in exports and $30 billion in imports. The chairman also expressed the belief that with the proper design of the government’s currency repatriation policies, these economic imbalances could be effectively addressed.

During a discussion on “Foreign Exchange Contracts: For or Against Exports?” with the Central Bank representative, the concerns of private sector participants regarding for- eign exchange transactions were addressed. Hossein Tajik, the Director of Foreign Exchange Allocation at the Central Bank, acknowledged certain challenges in the repatriation of foreign exchange earnings resulting from exports. He clarified that the Central Bank has outlined five distinct methods for repatriating these earnings, and all exporters, except for quasi-governmental entities, have the opportu- nity to make use of them. Tajik indicated that there are no inherent issues with the process of foreign exchange re- patriation, and he emphasized that one particularly note- worthy proposal under consideration is the utilization of foreign exchange earnings for investment purposes. Ad- ditionally, he pointed out that, in some specific scenarios, the Central Bank does not impose any constraints, offer- ing exporters more flexibility in their financial operations.

Last week, the Director-General of Mining Industries at the Ministry of Industry, Mine, and Trade raised a criti- cal issue. He revealed that the Administrative Justice Tribunal had put a halt to the one percent export duties on mineral products. Given the unfavorable market con- ditions, the primary goal is to prevent the imposition of additional levies. He further emphasized that it is illog- ical and counterproductive to sell essential raw materi- als needed domestically, especially when these materi- als play a role in completing the local production chain.

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