India and Saudi Arabia, two major players in the global energy landscape, have agreed to strengthen cooperation in the energy sector. This includes expanding crude oil and petroleum product supplies, as well as collaborating on the construction of two new refineries.
Expanding a Broader Strategic Partnership
The energy-focused agreement is part of a wider commitment to deepen strategic ties across multiple sectors. Both nations signed a joint statement pledging enhanced cooperation in defense, security, trade, investment, technology, agriculture, culture, health, and education.
Joint Efforts to Stabilize Global Energy Markets
On energy specifically, India and Saudi Arabia committed to work together to support global oil market stability. The two nations emphasized the need for balanced energy dynamics and reaffirmed their shared interest in ensuring the security of supply across all energy sources.
Comprehensive Energy Collaboration
The agreement outlines several key areas of collaboration:
- Supply Security: Continued and stable supply of crude oil, liquefied petroleum gas (LPG), and other derivatives.
- Strategic Reserves: Saudi Arabia will cooperate with India in its Strategic Petroleum Reserve program.
- Downstream Projects: Joint ventures in refining and petrochemical industries, including specialized manufacturing sectors.
- Innovation and Sustainability: Exploring innovative uses of hydrocarbons and expanding into electricity and renewable energy initiatives.
New Refinery Projects on the Horizon
A High-Level Task Force from both countries agreed to jointly pursue the development of two new refineries. This move is seen as a step toward long-term energy collaboration and value creation in the downstream segment.
Shifting Oil Import Dynamics
Currently, Saudi Arabia ranks as India’s third-largest crude oil supplier, following Russia and Iraq. However, Saudi Arabia’s share in India’s oil imports has been declining, with the Organization of the Petroleum Exporting Countries (OPEC) supplying less than 50% of India’s crude in the 2024–2025 fiscal year. As reported by oilprice.com, the surge in discounted Russian oil continues to reshape India’s import preferences.
