The Soaring Oil prices although justifies the fluctuation within the pricing of bitumen, there will not be an established mechanism to derive the bitumen price till date. The bitumen market is getting mature and liquid. The majority of the exporting nations embrace Singapore, Iran, Saudi Arabia, Egypt, Thailand in this region has totally different inputs and the vary varies significantly.
Not too long ago the Cartel led by Shell was exposed by the European regulators and the was fined to the tune of worth fixing on numerous petroleum products.
For Bitumen, there aren’t any posted prices apart from some compiled prices from some paid subscription providers ; marketers depend on plenty of pricing formulas that reference varied posted crude qualities.
Market pricing is seasonal with higher prices throughout peak season like summer being the norm attributable to increased demand for bitumen and different bitumen derived products.
Saudi arabia has virtually banned the export of Bitumen 60/70 , which thought of as the raw material, obtained from the fractional distillation process, from Saudi Aramco . The penetration grade bitumen eighty/a hundred, ready from the aforesaid uncooked material by adding additives, is the value added , before being exported. The value sensitive Saudi bitumen industry, an unorganized industry, commands essentially the most market worth among the many third world countries together with India, Pakistan and Bagladesh.
However, Iran is attempting to promote the bitumen via Iran Mercantile Exchange, as a commodity and the pricing foreign money is being slowly shifting in favrour of Euro.
Singapore, Malaysia, Thailand, although apart from Singapore, the remainder of the regional economies , being web importer, the pricing is intently followed with each other, and which isn’t reasonably priced for re-export for the creating nations.
By necessity, bitumen is repeatedly blended with diluent (sometimes in the form of C5+ or synthetic light crude) with a purpose to facilitate its transportation by way of pipeline to tankers.
As such, the efficient subject value for bitumen can also be immediately impacted by the enter cost of the diluent required, the demand and price of which can be seasonal in nature (in winter as colder temperatures necessitate more diluent for transportation).
Consequently, bitumen pricing is notoriously excessive in summer season and during main shutdown by the refineries and never reflective of the annual common realized price or the economics of the business overall.
The strong bitumen demand disturbs the efficient subject costs throughout peak season for a wide range of causes. Along with the standard seasonal issues, improve in bitumen demand and the premium for diluent was important as a consequence of various events resembling production interruptions at a regional refinery.
With billions of barrels of potential and billions of dollars of planned capital investment, the bitumen sources are extensively understood to be a cornerstone of future energy necessities and are attracting notable attention from overseas jurisdictions as effectively.
In reality, the adoption of the proposed methodology for all crude qualities would have little or no effect on reported proved reserve portions for all classes, bitumen excepted. For no different cause than bitumen alone is subject to the extreme seasonality in realized costs round calendar.
Some trade watchers propose to determine the constant price for bitumen by utilizing, for the benchmark reference value, the printed value for the crude oil after making use of historical adjustments for transportation and for quality, which create the worth differential between crude oil and bitumen.
