Middle East bitumen supply during the Hormuz disruption: dated prices and risks, and how PetroBind ships around the war zone with cargo insurance.
Middle East War and Bitumen Supply: Hormuz, Prices and Insurance
The 2026 US-Iran war disrupted shipping through the Strait of Hormuz and tightened bitumen supply. PetroBind Global can still ship bitumen from the Middle East by avoiding the war zone, with cargo insurance arranged per shipment. This guide explains what happened, why it matters, who is affected and how importers can manage the risk.
Last reviewed: 2026-10-24. Publisher: PetroBind Global.
What is happening to bitumen supply?
The war between the United States and Iran, which began in late February 2026, disrupted oil shipping through the Strait of Hormuz. Bitumen is made from the heavy end of crude oil, so less crude and fewer tankers mean less bitumen and higher prices. Trade press now reports tight bitumen supply and rising prices in Asia, Europe and Africa.
- Prices: Argus reported a jump from $382 per tonne in February to above $607 per tonne in March, and Singapore FOB at $830 per tonne on 2 October.
- Supply: Singapore and South Korea were expected to stay tight through at least the end of October.
- Insurance: war-risk premiums for Hormuz transits rose sharply (details below).
- Alternative supply: buyers can still source bitumen from suppliers whose cargoes avoid the war zone. PetroBind Global supplies on that basis, though market prices and freight still move.
Prices reported by Argus. These are separate assessments, not one continuous series. Sources: Argus podcast (8 May 2026) and Argus ABX 1 and ABX 2 (7 Oct 2026).
Can PetroBind Global ship Middle East bitumen with insurance?
Yes. PetroBind Global can supply bitumen from the Middle East while avoiding the war zone. Shipments are routed so that they do not pass through the Strait of Hormuz, and cargo insurance can be arranged for the shipment, subject to the insurer's terms for the route, cargo and Incoterm.
- Route: shipments avoid the Strait of Hormuz.
- Cover: cargo insurance can be arranged for the shipment. Ask for the policy or certificate and check any war-risk or route exclusions.
- In writing: PetroBind confirms the loading origin, route and insurance position in each quotation before you commit.
- Honest limit: avoiding the war zone removes the transit risk, but market prices and freight still move, and quotes reflect them.
Why does the Strait of Hormuz matter?
The Strait of Hormuz is the narrow exit from the Persian Gulf. The US Energy Information Administration estimates that about 20 million barrels of oil a day passed through it in 2024, roughly 20% of world petroleum consumption, and that flows fell almost 30% to 14.6 million in the first quarter of 2026. Many refiners use bitumen-rich sour crudes from the Gulf, so a shortfall cuts bitumen output even far from the region. Argus reported that German bitumen output fell about 16% year on year to 1.17 million tonnes in the first half of 2026 for this reason, with May output down more than 30%.
Crude oil and petroleum liquids through the strait. Source: US Energy Information Administration, as reported by the Institute for Energy Research (22 May 2026).
When did things change?
The timeline below uses the dates given by each source. Flows and prices keep changing, so check current figures.
| When | What happened | Source |
|---|
| 28 Feb 2026 | US-Iran war begins, followed by a near-total blockade of the strait | The National |
| Feb to Mar 2026 | Bitumen price rises from $382/t to above $607/t | Argus, 8 May 2026 |
| Q1 2026 | Oil through Hormuz falls to 14.6 million b/d, almost 30% below the 20.4 million b/d of a year earlier | EIA via IER, 22 May |
| 17-22 Jul 2026 | Hormuz war-risk premium reported at 3-10% of hull value (17 Jul) and 7.5-10% (22 Jul) | The National; Marsh via S&P Global |
| 30 Sep 2026 | Crude exports through the strait reported back at pre-war levels, while fuel shipments remain constrained | CNBC |
| 2 Oct 2026 | Singapore bitumen FOB $830/t; South Korea $815/t | Argus, 7 Oct |
| 21 Oct 2026 | Brent crude at $108.86 a barrel | Yahoo Finance |
Trackers disagree on how open the strait is, because they differ on ships running without tracking signals and on bypass pipelines. Treat flow figures as estimates.
Who is affected?
Every importer feels some effect, but the impact differs by region. Asia's peak paving season is under way in Oceania and Southeast Asia, where demand is firm. Europe is seeing refinery strain and weaker demand as buyers push back on high prices. Africa, forecast to import 2.7 million tonnes of bitumen in 2026, is more exposed because it relies on imports, and South Africa in particular on Middle East flows. Contractors with fixed-price tenders and distributors without stock are the most exposed, because costs can move before they can reprice.
Where do prices and supply show up first?
Benchmarks give the earliest signal. Argus' Singapore and South Korea assessments are widely watched in Asia, and Singapore traded at a premium of $263 per tonne over the Mediterranean and $361 over the US Gulf on 2 October. That gap draws cargoes from Europe and the United States into Asia, and traders expect more to arrive through at least November. Freight and insurance costs then add to the delivered price.
How much does war-risk insurance cost?
Ships in the area pay an additional war-risk premium on top of normal insurance. Marsh put the Hormuz premium at 7.5% to 10% of hull value in late July 2026, up from 1% to 3% a few weeks earlier. The National reported that rates of 3% to 10% would put the premium on a $100 million tanker at $3 million to $10 million, against roughly $250,000 (0.25%) before the war. Some underwriters are reluctant to offer spot cover, and premiums are unlikely to fall quickly even if traffic resumes, because insurers want months of stability.
Additional war-risk premium as a share of hull value. Sources: The National (17 Jul 2026) and Marsh via S&P Global (22 Jul 2026).
How can a shipping route reduce the risk?
Route choice can remove the transit risk. A cargo that does not pass through the Strait of Hormuz does not pay the highest war-risk premiums for those waters and is not exposed to delays or incidents there. It cannot remove market effects: when regional supply is tight, benchmark prices, freight availability and refinery costs move for every buyer. A supplier that avoids the strait reduces one risk, not all of them.
How does PetroBind Global approach routing and cover?
PetroBind Global is a Malaysia-based principal bitumen trader. PetroBind is able to supply bitumen while avoiding the war zone: its shipments are sourced and routed so that they do not pass through the Strait of Hormuz. Cargo insurance can be arranged for shipments, subject to the insurer's terms for the route, cargo and Incoterm. PetroBind confirms the loading origin, route and insurance position in each quotation, so the buyer sees them in writing before committing. Avoiding the war zone removes the transit risk, but market-driven price and freight movements still apply, and quotes reflect them.
How do Incoterms change who carries the risk?
Incoterms decide who pays for freight and insurance and when risk passes to the buyer.
- FOB: the buyer arranges main freight and insurance and carries transit and war-risk exposure from loading.
- CFR: the seller pays freight but not insurance.
- CIF: the seller also arranges insurance. Under Incoterms 2020 this is a minimum level of cover unless agreed otherwise, so ask what is covered.
- DAP: the seller delivers to the named place.
What should you ask any supplier before ordering?
Put the same questions to every supplier and compare the written answers.
- Loading port and planned route, and whether it transits the Strait of Hormuz or the Red Sea.
- Who arranges and pays for insurance under the quoted Incoterm.
- What the insurance covers, and any war-risk or route exclusions, shown in the policy or certificate.
- How a diversion or delay is handled, and who bears extra freight or surcharges.
- How long the quoted price is valid, given how fast benchmarks are moving.
How should importers plan during an unsettled period?
A few practical steps reduce the shock.
- Order earlier than usual, because tight supply and limited freight lengthen lead times.
- Agree acceptable alternative grades with your engineer before you need them.
- Keep documents ready: batch COA, PDS and SDS, plus independent inspection before shipment.
- Treat any quote that ignores freight, route or insurance as incomplete.
Sources
Frequently Asked Questions
- Q: Is bitumen supply affected by the Middle East war?
- A: Yes. Trade press reports tighter supply and higher prices in Asia, Europe and Africa. A route that avoids the strait removes the transit risk, but not the market effects.
- Q: How much oil passes through the Strait of Hormuz?
- A: About 20 million barrels a day in 2024, roughly a fifth of world petroleum consumption, according to the EIA. Flows fell almost 30% to 14.6 million b/d in Q1 2026.
- Q: How much has the bitumen price risen?
- A: Argus cited a jump from $382 per tonne in February to above $607 in March 2026, and assessed Singapore FOB at $830 per tonne on 2 October. Prices move quickly, so check current quotes.
- Q: What is the war-risk insurance premium for Hormuz?
- A: Marsh put it at 7.5% to 10% of hull value in late July 2026, against about 0.25% before the war.
- Q: Can PetroBind Global ship Middle East bitumen with insurance?
- A: Yes. PetroBind can supply bitumen from the Middle East while avoiding the war zone, with shipments routed clear of the Strait of Hormuz. Cargo insurance can be arranged for the shipment, subject to the insurer's terms. Origin, route and insurance are confirmed in each quotation.
- Q: Can PetroBind Global supply bitumen while avoiding the war zone?
- A: Yes. PetroBind sources and routes its shipments so that they do not pass through the Strait of Hormuz. The loading origin and route are confirmed in each quotation, and market-driven price and freight movements still apply.
- Q: Does PetroBind Global ship through the Strait of Hormuz?
- A: No. PetroBind's shipments are routed to avoid the Strait of Hormuz. The loading origin and route are confirmed in each quotation.
- Q: Can bitumen cargo be insured?
- A: Cargo insurance can be arranged for shipments, subject to the insurer's terms for the route, cargo and Incoterm. Ask for the policy or certificate and check for war-risk exclusions.
- Q: Who pays for insurance on a CIF shipment?
- A: The seller arranges it. Under Incoterms 2020 the default is a minimum level of cover, so confirm in writing what is covered.