New Delhi: A significant statement that has emerged out of the bilateral meeting between India and Saudi Arabia is that the two countries have stressed the importance of supporting the ‘stability’ of the world’s oil markets and the need to ensure the security of energy supply sources. Prime Minister Narendra Modi held a meeting with Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister of the Kingdom of Saudi Arabia, on September 11.
A joint statement that was released afterwards said, “The two sides highlighted the importance of energy cooperation as an important pillar of the strategic partnership between the two countries, and stressed the importance of supporting the stability of the world’s oil markets by encouraging dialogue and cooperation between producing and consuming countries, and ensuring the security of energy supply sources in the world markets.”
Commenting on the joint statement, Narendra Taneja, oil and gas sector expert, said, “First, this confirms that the issue of rising crude oil prices was taken up at the highest level. I would call it a positive and encouraging development.” The joint communique also said that Saudi Arabia has affirmed to New Delhi the Kingdom’s commitment to be a reliable partner and exporter of crude oil supplies.
The statement is significant because Saudi Arabia has been extending oil production cuts in the past. In June this year, when OPEC+, which includes the Organisation of the Petroleum Exporting Countries and allies led by Russia, agreed to curtail supplies until the end of 2024, Saudi Arabia announced additional voluntary cut which reduced its oil production to a multi-year low of 9 million barrels per day (bpd). India, on its part, had been urging the OPEC nations to consider easing production cuts in order to cool down crude oil prices, which had made the market extremely volatile. The joint statement marks the first time that Saudi Arabia, a member of OPEC, has agreed publicly to the need for more ‘stability’ in the international crude oil market.
Other important issues that India and Saudi Arabia have agreed to cooperate with each other on are the development of joint projects to transform oil into petrochemicals in the two countries and the extension of necessary support, requirements and enablers to accelerate the project of West Coast Refinery, according to the joint statement. “The decision to fast-track the India-Saudi Arabia refinery project in Maharashtra along the coast is a significant outcome of the high-level visit. The refinery will help India maintain its leadership as a global refining power for decades to come,” said Taneja.
India and Saudi have also agreed to explore investment opportunities in the field of fertilizers and intermediate, transformative and specialised petrochemicals in both the countries. In addition, they will also explore cooperation in the fields of promoting the utilisation of sustainable advanced hydrocarbon materials, energy efficiency and the rationalisation of energy consumption in the sectors of buildings, industry and transportation, and raising awareness of its importance, said the statement.
India and Saudi Arabia have decided to cooperate with each other in capacity development in the field of energy efficiency, development of supply chains while ensuring sustainability in the energy sector and enabling cooperation between companies to maximise the use of local resources in the two countries, in order to contribute to the resilience and efficiency of energy supplies.
The joint statement said that the two sides look forward to boosting joint cooperation in the fields of electricity and grid interconnection between the two countries, in addition to cooperating in the field of hydrogen and its derivatives.
The meeting between PM Modi and the Saudi Crown Prince took place a day after the two countries signed a Memorandum of Understanding (MoU) under which they pledged to co-operate and collaborate with each other across the spectrum in the energy sector. Renewable Energy (RE), energy efficiency, Hydrogen, electricity and grid interconnection between the two countries, oil and gas, strategic petroleum reserves, Carbon Capture, Utilisation & Storage (CCUS) and energy security were the areas that are covered under the ambit of the MoU.