Bitumen Prices and Demand Stay Volatile Due to U.S. Oil Policy and Seasonal Factors

Key Takeaways

• Bitumen Prices: Roadgrip Bitumen (VG30) ranges from ₹38,300 to ₹42,420 across regions, while VG40 prices vary similarly.
• Seasonal Demand Decline: Winter conditions in northern India have slowed down demand, while southern and southeastern regions remain stable.
• Geopolitical Impact: U.S. policies, including oil production expansion and import tariffs, are affecting global crude and bitumen prices.
• Middle East Stability: Despite global volatility, Iran’s bitumen market remains stable, with competition among refineries ensuring steady supply.
• Market Volatility Ahead: Ongoing geopolitical tensions and trade policies may lead to further fluctuations in bitumen prices and supply.

Bitumen Prices: Regional Price Differences in India

• The price of Roadgrip Bitumen (VG30) stands at ₹38,300/mt in Mundra, while in Mathura, it is priced higher at ₹42,420/mt. 
• Similarly, Roadgrip Bitumen (VG40) is available at ₹38,559.32/mt in Mangalore and ₹43,620/mt in Mathura. 
• Meanwhile, Refinery Bitumen (VG30) in Chennai is priced at ₹45,352/mt, whereas Refinery Bitumen (VG40) in the same location is selling at ₹48,152/mt.

Bitumen Demand & Supply: Impact of Geopolitical Shifts and Seasonal Demand

• The commodity and energy markets witnessed significant fluctuations over the past week due to political shifts in the U.S. and global economic conditions. In the crude oil sector, demand saw a temporary dip after President Donald Trump’s announcement of expanding U.S. oil production to reduce dependence on imports. This contributed to a decline in crude oil prices from $82 to $78 per barrel. However, global demand remains uncertain, especially amid geopolitical tensions and economic slowdowns. 
• Bitumen markets faced mixed trends. In India, demand fell due to harsh winter conditions and snowfall in the northern regions, slowing down infrastructure projects. However, demand in southern and southeastern India is expected to remain stable. In the Middle East, Iran's bitumen market remained steady despite currency fluctuations, while Bahrain’s prices hovered around $395 per ton. Singapore and South Korea's bitumen markets settled at $420 and $415 per ton, respectively, with no drastic demand shifts.  
• Supply-side trends also experienced notable changes. The swap deal between Israel and Hamas brought temporary stability to some geopolitical regions, while U.S. policies, such as Trump's imposition of a 10% import tariff on Chinese goods and a 25% tariff on Canadian and Mexican imports, could influence global supply chains in the coming weeks. Furthermore, ongoing competition among Iranian refineries for vacuum bottom supply suggests relative stability in the region’s bitumen output.  

Petroleum News: Political Changes in the U.S. and Their Impact

• Recent developments in U.S. politics significantly impacted the commodities and energy markets. Following Donald Trump’s inauguration, one of his first policy decisions was to increase domestic oil extraction, which immediately led to a dip in global crude prices. Additionally, his administration swiftly acted on various policy fronts, including immigration, climate regulations, and pardoning individuals involved in the 2021 Capitol riot.  
• Trump’s announcement of new import tariffs on China (10%) and Canada/Mexico (25%) has raised concerns over potential supply disruptions and higher costs in key sectors. These trade policies may have a ripple effect on commodity demand, particularly in industrial raw materials.  
• Singapore’s 180CST fuel oil closed at $491 per ton, reflecting relative stability in the petroleum product market. Meanwhile, European bitumen prices remained in a broad range of $430-480 per ton, showing mixed signals in regional demand and supply conditions.  

Expert Opinion; Volatility in Bitumen Prices and Global Trade

• Looking ahead, markets are expected to remain volatile as global players assess the impact of Trump’s policy decisions. Crude oil prices may fluctuate further depending on actual increases in U.S. oil output and the response from OPEC producers. 
• In the bitumen market, prices in India’s northern region could remain under pressure due to seasonal demand constraints, while stability is anticipated in southern and southeastern India. Global bitumen prices are likely to remain range-bound unless supply disruptions or geopolitical escalations arise. Traders should closely monitor U.S. policy developments and their influence on global trade flows.