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The oil ministers of Saudi Arabia and India will meet on Saturday, Reuters quoted India’s Oil Minister Dharmendra Pradhan as saying on Friday.
Although the Indian minister did not go into specifics about the meeting, it’s probably safe to assume that Khalid al-Falih, the oil minister of OPEC’s biggest producer Saudi Arabia, and Pradhan, the oil minister of one of the fastest-growing oil demand countries, will discuss oil supplies and/or investments.
Saudi Arabia is currently India’s second-largest oil supplier after Iraq and it has just pledged to invest US$100 billion in India’s energy sector in its continued efforts to lock in future demand for its oil on the fastest-growing Asian markets.
In June last year, Saudi oil giant Saudi Aramco and the Abu Dhabi National Oil Company (ADNOC) signed a framework agreement and a memorandum of understanding with a consortium of Indian national oil companies to join a mega refinery and petrochemical complex worth US$44 billion in the Maharashtra state on India’s west coast. The project, however, has seen some setbacks recently, as the process of land acquisition was halted amid farmers’ opposition and as plans emerged to relocate the complex to another site in the Maharashtra state.
The meeting between Saudi Arabia’s al-Falih and India’s Pradhan will take place less than two months before the U.S. waivers for Iranian oil customers—including India—to continue importing oil from Iran at reduced volumes expire.
India is in talks with the U.S., asking for an extension of its waiver to continue importing oil from Iran at the current rate of around 300,000 bpd, Reuters reported on Thursday, citing two sources in India familiar with the issue.
In January this year, Iran slipped to seventh place among India’s main oil suppliers, from the third place it held at the same time last year.
The report of India-U.S. talks over a waiver extension beyond early May comes just as U.S. President Donald Trump announced earlier this week that he plans to end the preferential trade treatment for India.
“I am taking this step because, after intensive engagement between the United States and the Government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India,” President Trump wrote in a letter to the Speaker of the House of Representatives and President of the Senate.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Moreover, India is expanding its refining capacity so as to become one of the world’s largest exporters of refined products. Therefore, India has welcomed Saudi Arabia’s pledge to invest $100 bn in India’s energy sector in its continued efforts to lock in future demand for its oil on the fastest-growing Asian markets.
India which accounts for 33% of Iranian oil exports is determined to continue buying Iranian crude whether the Trump administration renews its sanction waiver in May or not. It will not be deterred either by President Trump’s announcement earlier this week that he plans to end the preferential trade treatment for India. India doesn’t recognize US sanctions against Iran, only UN sanctions.
India’s defiance of US sanctions is part of the reason why US sanctions have so far failed to cost Iran the loss of even a single barrel of oil. The United States has no alternative but to renew the sanction waivers it granted to the eight biggest buyers of Iranian crude when they expire in May or issue new ones if for no other reason than to use them as a fig leaf to mask the fact that the sanctions are doomed to fail and that the zero oil exports option is a bridge too far.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London