Indian Bitumen Market Remains Firm Amid Freight Hikes and Import Pressure

Key Highlights:

1. India’s crude import dependence climbed to nearly 88% in FY26 Q2.
2. Brent crude holds above $63/bbl; freight costs up to $23/ton.
3. Domestic bitumen and fuel oil prices remain firm amid higher logistics costs.
4. Sanctions on Russia and Iran drive volatility, tightening margins for refiners.

India’s Crude Import Dependence Rises to 88% in FY26 Q2

India’s crude import dependence has touched ~88% (FY26 Q2), according to PPAC.
Crude oil prices have recently strengthened due to persistent supply concerns, geopolitical tensions, and trade optimism.

• Brent Crude: Above $63/bbl
   
• WTI Crude: $58.12/bbl
   
• Freight (VLCC): Up from $19 → $23/ton

Domestic Bitumen & Related Product Prices (₹/MT unless mentioned, plus GST):

Bitumen prices in Mumbai and Hyderabad regions remain in a similar range, showing mild volatility linked to freight cost escalation.

Brent Near $63 as Freight Climbs and Russian Discounts Shrink

Domestic crude production remains stagnant, increasing import reliance and pressure on refiners.
Globally, supply continues to face disruptions due to OPEC+ production tweaks, sanctions on Russia and Iran, and rising shipping costs.

• Russia’s discounted barrels are shrinking, leading to higher import costs.
• Iran’s exports remain uncertain amid renewed sanctions.
• Freight escalation and INR depreciation are keeping import parity sensitive.
• Despite mild easing in Brent, supply risks are keeping markets firm.

In the bitumen segment, VG-30 remains India’s dominant road construction grade. However, PSUs and importers are facing margin pressures as port stock values (especially Kandla) react sharply to freight hikes.

Market News: Domestic Bitumen Prices Stay Firm Amid Rising Freight Costs

Recent global developments have further intensified the crude market outlook:

• U.S. sanctions on Russia’s Rosneft and Lukoil have disrupted supply channels for top buyers like India and China, affecting discounted crude inflows.
• Reports suggest India may scale back Russian oil purchases at the request of U.S. President Donald Trump.
• Reliance Industries and Nayara Energy are expected to face earnings pressure due to constrained access to cheaper Russian barrels.
• China and India are both reassessing Russian imports, which has pushed crude up by 5% this week.
• Analysts highlight that while India can switch from Russian crude, it would come at higher costs due to freight, insurance, and fewer supplier options.

Market Expectations: Crude Markets Volatile but Supported; Refiners Face Margin Pressure

The market is likely to remain volatile but supported in the near term.

• Crude Prices: Expected to stay range-bound but firm, driven by supply disruptions and sanction impacts.
• Domestic Bitumen: Prices may stay elevated as freight and exchange rate volatility continue.
• Margins: PSU refiners could face tight spreads due to higher import costs and narrowing discounts.
• Long-Term Outlook: Unless OPEC+ raises production or sanctions ease, crude could hover in the $60–65/bbl range with upside potential amid geopolitical flare-ups.