India’s Oil Demand Steady Amid Geopolitical Tensions; Market Eyes OPEC+ Moves

Petroleum product prices in India show wide regional and packaging variations, with VG40, base oils, and lubricants trading at distinct levels. OPEC+ output hike and subdued demand are shaping global supply dynamics. Despite regional geopolitical tensions, oil prices remain stable due to unaffected supply chains and sufficient global inventories.

Key Highlights

  1. VG40 Bitumen varies from ₹36,000/MT (Karwar, bulk) to ₹50,912/MT (Panipat, refinery, bulk).
  2. Base Oil and Furnace Oil prices range between ₹47.5–₹76/LTR across major ports.
  3. OPEC+ to raise output by 411,000 bpd in June 2025, easing voluntary cuts.
  4. No price disruption despite India-Pakistan tensions; global oil supply remains stable.

Petroleum Price: Price Trends Vary by Region and Product Type

  • Bitumen VG40 (Roadgrip) is priced at ₹41,400/MT in Mundra (drum packaging) and ₹36,000.68/MT in Karwar (bulk), while Refinery VG40 is significantly higher at ₹50,912/MT in Panipat (bulk). 
  • Bitumen Emulsion SS 1 (Roadgrip) is listed at ₹34,800/MT in Mathura for bulk and ₹39,800/MT for drum packaging.
  • Base Oil N150 is priced at ₹63.5/LTR in Mundra, and 4cST at ₹76/LTR in Mumbai. Virgin 180cST Furnace Oil is available at ₹47.5/KG in Mumbai and ₹48.5/KG in Mundra.
  • For lubricants, Gear Oil 460 (LubriEdge) is ₹134/LTR and Gear Oil 220 is ₹124/LTR, both in Bhiwadi. Hydraulic Oil HLP46 (LubriEdge) is priced at ₹99/LTR and Hydraulic Oil 68 at ₹91/LTR, also in Bhiwadi.

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Demand and Supply: OPEC+ Output Hike Signals Market Rebalancing

  • The global oil market is currently navigating a phase of rebalancing, with supply-side dynamics gaining precedence. The Organisation of Petroleum Exporting Countries and its allies (OPEC+) have announced an increase in output by 411,000 barrels per day (bpd) for June 2025. 
  • This move is part of a gradual unwinding of the 2.2 million bpd voluntary production cuts that have been in place since 2023. The ramp-up signals confidence in demand recovery and a shift in strategy towards maintaining market share amid stabilizing consumption patterns.
  • On the demand side, India remains a significant consumer, ranking as the third-largest globally, with a daily requirement of approximately 5 million barrels. Meanwhile, Pakistan’s oil demand is estimated at over 500,000 bpd. 
  • While both countries are substantial consumers, neither is directly involved in large-scale crude production or critical transport routes, making their consumption less impactful on global supply-side metrics.
  • Recent softness in crude prices, including Brent hovering around $62.67/bbl, reflects a broader global picture of adequate supply and subdued demand growth. With inventories stable and strategic reserves in place, the market is not currently pricing in significant demand shocks or supply shortages.

Market News: South Asian Tensions Have Minimal Market Impact

  • Despite the geopolitical flare-up, experts maintain that there is no immediate impact on crude oil prices, as key supply chains remain intact. 
  • According to analysts like Hitesh Jain of Yes Securities and Prashant Vasisht of ICRA, the India-Pakistan conflict does not represent a supply-side risk, which is typically the primary driver for oil price volatility. 
  • Unlike tensions in the Middle East or the Russia-Ukraine war, which directly involved major oil-producing regions or disrupted transport corridors, the South Asian conflict is geographically and commercially peripheral to core oil logistics.
  • India’s import dependency (around 85%) remains a vulnerability in terms of pricing and availability, but the current crisis has not disrupted shipping lanes or refining infrastructure. Thus, both the Brent and WTI benchmarks have remained relatively stable.

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Market Expectations: Prices to Stay Range-Bound Amid Balanced Outlook

  • Going forward, the market is expected to remain range-bound unless geopolitical developments escalate into a full-scale conflict or disrupt regional logistics. 
  • Prices may continue to be influenced more by OPEC+ output decisions and macroeconomic indicators rather than regional skirmishes in South Asia. 
  • Stakeholders will be watching for any spillover impacts or shifts in policy from major producers that could tighten supply in the coming months.
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