Saudi Arabia and India agree to set up two oil refineries

The two countries committed to collaborate on everything from petrochemicals to electricity, renewable energy and climate policy, according to a joint statement.

By Sudhi Ranjan Sen and Christine Burke

Saudi Arabia and India agreed to deepen energy ties and cooperate more closely on a wide range of industries including defense, tourism and culture as they seek to strengthen their economies at a time of global turbulence.

The countries committed to establish two oil refineries in India and collaborate on everything from petrochemicals to electricity, renewable energy and climate policy, according to a joint statement Wednesday, which didn’t provide extensive details. They’re also aiming to complete negotiations on a bilateral investment treaty “at the earliest.”

The announcements came after Saudi Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi met in Jeddah on Tuesday night. India’s leader departed shortly after, cutting his trip short by a day, following one of the worst attacks on civilians in India’s northern Jammu and Kashmir region in years.

Both condemned terrorism and violent extremism, and called on all states to dismantle terror infrastructure, according to the statement.

India and Saudi Arabia’s leaders met as both countries look to support their economies in the face of wide-ranging US tariff policies that threaten to stunt growth. India is already facing its slowest economic expansion in four years and Saudi Arabia is forecast to come under renewed pressure from subdued oil prices.

Deeper ties would stand to bolster stability and energy security for both, though there was too little detail in Wednesday’s statements on concrete deals. Saudi Crown Prince MBS had in 2019 pledged $100 billion of investments in India, about $10 billion of which has materialized. At Tuesday’s meeting, both leaders agreed to increase visits of business and trade delegations, and hold trade and investment summits to facilitate more cross-border flows.

State-owned oil behemoth Saudi Aramco, which has long sought entry into India’s refining sector, wasn’t mentioned in the official communications. It’s unclear if the company will be part of India and Saudi Arabia’s latest announcement on the two refineries.

The countries agreed to pursue deeper cooperation on the supply of crude and liquefied petroleum gas, and said they’d work together on India’s strategic oil reserve program.

Saudi Arabia, the de-facto leader of the OPEC+ producer group, was once India’s largest oil supplier but has seen its share of the market decline as imports from Russia and Iraq increase.

Outside of energy, the countries signed memoranda of understanding that included space activities and health care.