Tightened Supply Chains: Strait of Hormuz & Bitumen Markets

The sudden shutdown of the Strait of Hormuz has choked the flow of heavy, bitumen‑rich crudes from Iran, Saudi Arabia and Iraq, forcing European refineries to substitute lighter, sweeter grades. This shift not only lowers bitumen yields but also inflates freight costs and crude premiums, squeezing margins across the continent. With key grades like Basra heavy and Saudi medium scarce, refiners are prioritising diesel and jet fuel runs, further reducing the domestic supply of paving binders.

In Africa, the disruption is even more pronounced. South Africa, which lost its last domestic bitumen refinery, now depends entirely on Middle‑East imports that have been severely curtailed. Container‑shipped drum volumes to Morocco, Algeria and Libya have slumped, and price spikes of 30‑40% have forced road‑maintenance programs in Romania and Morocco to delay or scale back projects. The higher landed cost of bitumen is prompting buyers to cut spot purchases and cling to pre‑agreed term volumes.

Looking ahead, analysts project a tightly balanced 2026 market. Elevated crude prices and reduced refinery throughput are likely to keep bitumen supplies constrained, while demand remains muted by high input costs. A modest recovery may emerge in the second half of the year as geopolitical tensions ease and major infrastructure initiatives—especially in Morocco and Algeria—resume. Long‑term, African import reliance will grow toward 3 million tonnes by 2030, underscoring the need for diversified supply chains and alternative binders to mitigate future Hormuz‑related shocks.