Bitumen Market Sees Mixed Trends Amid Oil Price Fluctuations

Key Highlights:

1. Crude Oil Prices Surge – Oil hit $76 per barrel amid supply concerns from the US and Russia.
2. Bitumen Market Shows Mixed Trends – Prices in Singapore at $445/ton, South Korea at $425/ton, and India’s bulk bitumen rose by $1.5/ton.
3. India’s Oil & Petroleum Output Fluctuates – Crude oil production fell 1.2%, while petroleum output rose 8.3% in Jan 2025.
4. Geopolitical Uncertainty Continues – US sanctions on four Indian firms for Iranian oil trade and tensions in Ukraine & the Middle East add market volatility.

Petroleum Price: Surge in Crude Oil Prices

• During the last week, crude oil prices surged to $76 per barrel, influenced by potential supply disruptions from the US and Russia, along with ongoing peace negotiations surrounding the Ukraine conflict. 
• In the bitumen market, Singapore’s 180CST reached $489 per ton, while bitumen prices in Singapore and South Korea were recorded at $445 and $425 per ton, respectively. 
• Bahrain maintained its price range at $420 per ton. In Europe, bitumen prices fluctuated between $430-$470 per ton. 
• Meanwhile, in India, bulk bitumen prices saw an increase of $1.5 per ton, whereas packed bitumen prices dropped by $4 per ton, indicating mixed signals within the market.

Petroleum Demand and Supply: Mixed Trends in Bitumen Market

• Global bitumen demand remains volatile amid geopolitical uncertainties and fluctuating crude oil prices. The slow progress in the Middle East's captive swap negotiations and the geopolitical tensions between the US, Russia, and Ukraine have added further complexity to the market. 
• In India, demand for bulk bitumen remains stable, attributed to ongoing infrastructure projects. However, the dip in packed bitumen prices suggests reduced short-term purchasing activity. Despite expectations of a bitumen price drop due to the rising value of the US dollar against the Iranian Rial, current supply chain pressures have kept prices steady. 
• Exporters are under pressure to meet their commitments before the fiscal year-end, adding further supply-side constraints. Additionally, European markets witnessed steady demand, with bitumen price ranges reflecting regional supply-demand dynamics. The anticipation of potential crude oil price corrections could further impact the bitumen supply chain in the coming weeks.
• The geopolitical landscape remains a key driver of market sentiment. The escalating tensions between Kyiv and Washington following sharp criticisms exchanged between Volodymyr Zelenskyy and Donald Trump have contributed to uncertainty in oil markets. 
• Meanwhile, Vladimir Putin has signaled willingness to engage with Trump, adding further unpredictability to geopolitical developments. Additionally, market participants are closely monitoring the slow-moving prisoner swap negotiations in the Middle East, while Israel’s recent airstrike killing another Hamas leader adds to regional instability. 
• Goldman Sachs has predicted that even in the event of a ceasefire between Ukraine and Russia, Russian oil production may not see significant increases, limiting potential downward pressure on crude oil prices.

Petroleum News: Continued Geopolitical Uncertainty

• The United States has imposed sanctions on four companies based in India for their alleged involvement in the trade and transportation of Iranian crude oil and petroleum products. This action reflects the ongoing enforcement of US sanctions against Iran.
• India's crude oil and condensate production declined by 1.2% in January 2025, reaching 2.5 million metric tons. However, petroleum output saw an increase of 8.3% during the same period.
• Crude oil prices in the international market continue to fluctuate, impacting petrol and diesel prices in India. The domestic fuel prices are adjusted based on these global market trends. 
• Oil India plans to increase its production capacity by acquiring new blocks and forming global partnerships. The company aims to produce 3.8 million tons of oil equivalent and 3.8 billion cubic meters of natural gas in the fiscal year 2024-25. 
• Assam's energy sector is witnessing significant changes with the expansion of the Numaligarh Refinery and the Paradip crude oil pipeline. Chief Minister Himanta Biswa Sarma emphasized these developments, along with initiatives like bamboo-to-ethanol conversion.
• India's crude oil consumption is expected to rise to six to seven million barrels per day, marking a 20% increase in the near term. This surge reflects the country's growing energy demands.
• Union Minister Hardeep Singh Puri stated that India's crude oil consumption is projected to reach 6.5 to 7 million barrels per day in the short to medium term, up from the current 5 million barrels per day.

Expert Opinion on Petroleum Market Trends

• Initial projections indicate a possible decline in bitumen prices at the beginning of March, despite ongoing market uncertainties. The approaching fiscal year-end is exerting upward pressure on prices due to exporter commitments. 
• However, if crude oil prices stabilize or decline, bitumen markets could experience a slight correction. Seasonal demand fluctuations and geopolitical developments will remain crucial in shaping price movements in the coming weeks.