Saudi Arabia and India have agreed to deepen energy ties and pursue closer cooperation in areas like tourism and technology, with the aim to strengthen relations amid global economic turbulence.
The two nations have reached an accord to establish two oil refineries in India through a joint venture following a meeting between Saudi Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi in Jeddah on Tuesday night.
India’s Ambassador to Saudi Arabia, Suhel Ajaz Khan, announced the deal without providing further details.
Economic Challenges and Opportunities
Both countries face significant economic challenges. India is experiencing its slowest economic expansion in four years, while Saudi Arabia grapples with subdued oil prices. Additionally, deeper ties between the two nations could bolster stability and energy security. This partnership builds on years of collaboration between the G20 nations across various sectors, including oil, agriculture, and technology.
In 2019, Saudi Crown Prince Mohammed bin Salman pledged $100 billion of investments in India. However, only about $10 billion has materialized so far. State-owned oil giant Saudi Aramco has long sought entry into India’s refining sector with limited success. Challenges such as land acquisition and valuation issues have hindered previous projects. However, it remains unclear whether Aramco will be involved in the newly announced refineries.
Shifting Market Dynamics
Saudi Arabia, once India’s largest oil supplier, has seen its market share decline as imports from Russia and Iraq increase. This agreement could potentially reshape the energy landscape between the two nations. Ahead of his visit, Modi highlighted the exploration of joint projects in refineries and petrochemicals which aligns with the broader goal of enhancing energy security and economic stability.
The agreement between Saudi Arabia and India to establish two oil refineries marks a significant step forward in their strategic partnership. As both nations navigate economic challenges, this collaboration could pave the way for greater stability and growth.
Closer Saudi-Indian ties promise enhanced energy security and economic stability since Both G20 nations aim to transform years of exploratory talks into actionable partnerships across sectors.
