According to WPB, India's reliance on imported crude oil has reached a peak of nearly 88% in, one of the highest dependency ratios in recent history. This increasing dependency has been in the context of elevated global supply risks, elevated freight costs, and the diminishing price advantage earlier available on Russian crude.
International oil benchmarks have remained robust, with Brent crude above $63 per barrel and WTI near $58, underpinned primarily by tight supply fundamentals, OPEC+ output cuts, and resurging geopolitical tensions. The resultant rise in Very Large Crude Carrier (VLCC) freight rates—from $19 to $23 per ton—has also compressed import margins and imposed additional upward pressure on downstream petroleum products, including bitumen.
Local bitumen prices have continued to be stable, mirroring the cost pressures faced by refiners and suppliers. Global sanctions, logistics issues, and devaluation of the Indian rupee have all contributed to sustained volatility across short-term pricing. Key grades such as VG-10, VG-30, and VG-40 have seen stable price levels, with packed forms enjoying a sizeable premium over bulk supplies.
The sustained firmness in bitumen prices is attributed to external and internal structural factors. Externally, Russia and Iran sanctions continue to disrupt traditional trade routes, reducing availability of discounted barrels and increasing freight exposure for importers. Internally, limited domestic crude production has raised the need for costly imports, thereby crunching refinery margins and lowering profit spreads for India's PSUs.
Globally, the energy market remains susceptible to any change in geopolitical equilibrium. Russia's incremental withdrawal of heavily discounted cargoes, along with the precarious trajectory of Iranian exports under reinstated sanctions, has turned it into a scenario wherein importers have to deal with not just higher prices but also scarce alternatives. Consequently, major Indian refiners such as Reliance Industries and Nayara Energy can expect their earnings leeway to be constrained, particularly with alternative source points involving higher transportation and insurance costs.
The bitumen business, which has a direct correlation with infrastructure and road-building initiatives, continues to reflect such macroeconomic pressures. Although the VG-30 grade remains the grade of choice for construction projects, refiners and importers are facing higher price sensitivity for major ports such as Kandla, where stock values are directly impacted by fluctuating freight rates.
Markets are anticipated to be underpinned but volatile on a short-term basis by analysts. Stability in price should be around $60–65 per barrel for Brent crude, with scope for additional upside in case there are any fresh geopolitical disruptions, unless OPEC+ increases the level of production significantly or sanction-related constraints are eased.
In the long term, India's growing import dependence underscores a structural vulnerability in its energy industry—where every movement in global freight, sanctions, or exchange rates ripples through the domestic fuel and bitumen markets.
By WPB
Bitumen, Oil, News, Bitumen Markets
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