Constructions Expansion Leading Bitumen Demand

As a result of OPEC+ decision to reduce the supply, oil prices are rising. Last week, Brent Crude Oil rose to more than $60 per barrel, Iranian refineries and suppliers expected the overall demand to rise from the various global market. However, such expectation did not come true and there were not any significant demands in Iran’s bitumen market. The reasons can be:

1. The fear of oil price sudden reduction
2. The possible outbreak of the new variant of COVID-19 in the world
3. USD fluctuations against Rial once the U.S president and Iran’s supreme leader declared opposing ideas about Iran-USA negotiations
4. The commencement of Lunar holidays and china’s decreased demand

During the pandemic of COVID-19, the contractors of road construction projects in India started to import bitumen from Iran, the projects include:

• Delhi-Mumbai Expressway
• Delhi-Dehradun economic corridor
• Kanpur-Lucknow Expressway
• Amritsar-Jamnagar project
• Delhi-Katra project
• Bengaluru-Chennai Expressway
• Chennai-Salem corridor
• Raipur-Vishakhapatnam

All these road and highway construction projects are due to support and increase demand for bitumen in India through 2021. The current situation of the market seems to continue till the last week of February 2021. Afterwards, we can expect the boost of the market.