- Saudi Arabia continues to export over 600,000 barrels per day to India.
- Dollar pricing remains the foundation of Saudi crude exports.
- Geopolitical ties with Pakistan won’t disrupt India’s energy supply.
Saudi Arabia’s new mutual defense agreement with Pakistan has raised questions about its potential impact on energy ties with India. However, experts and sources suggest that Riyadh’s commercial relationship with one of the world’s largest crude consumers remains steady.
Energy Ties Stay Strong
A senior source familiar with Saudi Arabia’s energy strategy told CNBC that India will continue to purchase Saudi oil, despite the new defense pact. “Of course,” the source said when asked about future sales. Saudi Arabia exported over 600,000 barrels per day to India in July, ranking among India’s top three suppliers alongside Russia and Iraq, according to Kpler data.
Industry analysts stress that Saudi Arabia is balancing its security partnerships without jeopardizing commercial interests. Dollar-based pricing continues to underpin the kingdom’s crude exports, dispelling speculation about any move toward non-dollar trading arrangements.
Geopolitics vs. Trade
The pact, signed by Crown Prince Mohammed bin Salman and Pakistani Prime Minister Shehbaz Sharif, strengthens Riyadh’s regional security ties amid growing uncertainty over U.S. defense commitments. Gulf states, including Saudi Arabia, are exploring new partnerships in response to shifting global dynamics, particularly following tensions involving Israel and Qatar.
Despite these geopolitical shifts, Indian officials maintain a pragmatic view. The Ministry of External Affairs noted it would assess the pact’s implications for national security and regional stability but has not indicated any change in energy relations.
India’s Gulf Strategy
India continues to diversify its Gulf energy sources. Abu Dhabi, for example, supplied around 400,000 barrels per day to India in June, highlighting India’s multi-country oil strategy. Commerce Minister Piyush Goyal recently reviewed progress on the UAE-India Comprehensive Economic Partnership Agreement, further cementing bilateral trade ties.
Experts remain confident that the new Saudi-Pakistan defense deal will not disrupt oil markets significantly. Manpreet Gill of Standard Chartered Wealth Management noted that geopolitical events often trigger temporary price fluctuations, with WTI futures expected to stay near $65 per barrel.
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Saudi Arabia’s defense pact with Pakistan reflects strategic security priorities but does not signal a shift away from India as a key energy partner. For India, Saudi crude remains a critical component of its energy mix, ensuring stability amid regional uncertainties.
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