What is Snapback? Bitumen Market Analysis and Price Forecast after Snapback

The snapback mechanism, as outlined in Resolution 2231 (JCPOA), gives the signatories to the agreement, in the event of a "serious breach" of Iran's commitments, the power to trigger a 30-day period during which, if no alternative measure is adopted, previous UN sanctions against Iran would go into effect.
This stage has already been initiated, and within the past few days, the United Nations, by failing to adopt a resolution extending the suspension of sanctions on Iran, has indicated unequivocally that sanctions will re-appear from 28 September 2025. In practical terms, this means the reimposition of UN sanctions and intensifying international pressure on Iran.
Snapback: Challenges for Exporters of Petroleum Derivatives
With this action, legal and operational risks to international trade with Iran will be escalated. Insurers, banks, and shipping companies will be more cautious in handling Iranian product transactions. Crude oil and petroleum product exports like bitumen, which has major buyers in Asia and whose trade relies heavily on sea-borne transport and cross-border value chain services, will inevitably face market dislocation, payment and insurance issues, and higher shipping and insurance charges from 28 September.
Snapback Effects on Non-Oil Exports
The direct legal impact on non-oil goods is generally lower than that of crude oil, but indirect effects (insurance, banking, shipping, credit risk of the buyers, secondary sanctions risk) can also severely cut non-oil exports short.
When foreign insurers or foreign banks refuse to make payment or offer coverage for Iranian shipments, foreign buyers either have to accept the risk by employing cash payment and furtive shipping or seek other sources.
Possible Consequences of Snapback Implementation

•Partial Enforcement Scenario: Partial re-imposition of UN sanctions, but major players (China, India, some African countries) keep financial/transit corridors open. Exports fall but not completely.

•Moderate Scenario (Pressure from Banks/Insurance): The big banks and insurers exit, transaction time and cost increase, and some of the buyers begin slowly to shift to alternatives.

•Maximum Pressure Scenario (Strict Enforcement + Secondary Sanctions): Exports crash severely, the dependent markets get hit hard, and Iran is forced to sell at steep discounts or through completely informal channels.

Snapback and the Bitumen Buyers' Situation
Key Iranian bitumen customers in Asia include Pakistan, India, China, the UAE, and African and Gulf states. Import statistics show Pakistan and India as significant importers of Iranian bitumen, and China is a significant market as well. The regional bitumen market is greatly reliant on Iran due to its relatively competitive prices and seaborne export capabilities.

Operational channels significant in bitumen and their vulnerability:

•Tanker and bulk shipments: Without shipping lines internationally or registered companies, denying insurance or flagging ships, it will be hard to deliver cargo.

•Transport insurance (hull & P&I, cargo): Higher risk will lead to higher premiums or denial of coverage; buyers will either pay more or use informal means.

•Banking and finance services: Fear of sanctions or secondary sanctions would discourage cross-border banks from clearing payments, forcing transactions to go via cash remittances or complex arrangements.

Price and Supply Effects (Short- and Mid-Term)
Short-term effects (0–6 months):

•Regional prices to rise, as nations like Pakistan, India, and African importers depend on Iranian supply—by an estimated 5–15%.

•Buyers would pay a premium to receive goods on time.

•Iran likely to be forced to offer 10–20% discounts in order to retain customers, hence creating a gap between "regional benchmark prices" and "Iranian cargo prices."

Mid-term implications (6–24 months):

Slowly, markets are able to identify substitute sources (Russia, Iraq, Indonesia, even China).World prices stabilize, but Iran continues to sell at a discount.Regional benchmark prices stabilize but Iranian export prices continue below the average.

Differing Impacts on Bitumen Buyers

•Pakistan and Afghanistan: Most affected, as they are reliant on Iran; infrastructure project costs likely to rise.

•India: Moderate; being the highest consumer of bitumen in Asia, India can easily switch to alternatives (Russia, Iraq), but short-term cost increase.

•China: Minimal impact because of its flexibility in procurement.

Mitigation Measures (for Exporters, Buyers, and Policymakers)

•Iranian exporters: Install alternative, transparent payment systems (regional currency payments, trade-friendly banks).Expect access to regional insurers.Diversify customer base.

•Asian buyers: Seek alternative suppliers.Secure long-term contracts with greater guarantees.Consider total cost (price + insurance/shipping risks).

•Policymakers: Active diplomacy to ease sanctions pressure.Facilitate agreements for non-oil trade (regional financial channels, bilateral shipping/insurance accords).

Actions Exporters Can Take to Mitigate Snapback Effects

1. Market Diversification

• Find customers in East Asia (Sri Lanka, Vietnam, Malaysia) and several African countries less vulnerable to sanctions.

2. Intermediaries and Third-Party Companies

• Employ intermediaries in third countries for transactions (while abiding by international law).

3. Alternative Financial Models

• Barter exchange (i.e., bitumen for raw materials or equipment).

• Payment in local currencies (Chinese yuan, Indian rupee, Russian ruble).

4. Quality and Branding Focus

• Increase competitive potency by maintaining quality; some may like Iranian bitumen despite sanctions.

5. Smart Legal and Contractual Structures

• Enforce agreements minimizing sanctions risk for buyer and seller.

By Bitumenmag

Bitumen, Price