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Saudi refining investment in India faces hurdle over crude supply terms

Crude pricing disagreements stall Saudi Arabia’s refinery ambitions in Indian oil sector

PRAVASISAMWAD.COM

Saudi Arabia’s efforts to invest in two major oil refineries in India have hit a roadblock, with progress reportedly stalled due to differences over crude supply terms, according to sources close to the discussions, reported thenews.com.

Talks falter as Saudi push for premium crude pricing clashes with India’s cost concerns

The two countries had agreed last month to collaborate on expanding refining capacity in India, a move aligned with Riyadh’s strategy to secure a foothold in one of the world’s fastest-growing energy markets. However, according to insiders, negotiations have slowed because Saudi Arabia is insisting on supplying half of the crude oil required for the refineries at official selling prices (OSPs) — which tend to be higher than market rates.

This pricing approach has raised concerns among Indian stakeholders, who are pushing back against paying a premium.

  • India, which is already a top crude buyer from Saudi Arabia, is wary of becoming further dependent on fixed-rate supplies that may not reflect real-time global oil price trends

  • The standoff comes at a time when New Delhi is actively diversifying its energy imports, including exploring discounted options from alternative producers to balance costs

Saudi Arabia, meanwhile, is eager to expand its downstream presence globally, and securing refining partnerships in Asia is key to that strategy. The proposed investment would help the Kingdom lock in long-term demand for its crude as part of a broader post-oil economic transition.

For now, the lack of agreement on pricing and volume commitments has put the ambitious plans on hold. While both sides remain interested in collaborating, progress hinges on resolving how crude will be priced and allocated—a sticking point that continues to delay next steps in what could be a landmark partnership for both energy giants.

Bhavna Batra
Bhavna Batra
Besides being a dynamic Entrepreneur, Bhavna is an HR Expert, Writer, Intuitive Energy Healer, Reiki Master, Miracle Coach, Motivational Speaker and a fighter. She is the Founder & CEO of Synerggie Group in Oman, a Company that specializes in Event Management and Consulting. Her interests are as diverse as her talents. She possesses an ardent love for Cinema, not just as a viewer but also as a student because of her storytelling techniques. Her passion for singing reveals her affinity for the arts, where she uses her voice to express herself in ways that words alone cannot capture.

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