Tag: Brent Crude

PetroChina to Shut Its Largest Northern Refinery Within Weeks

State-run oil giant PetroChina will shut the last remaining crude processing unit at its biggest refinery in northern China within weeks, industry sources told Reuters on Wednesday.

Dalian Petrochemical, PetroChina’s 410,000-barrels-per-day refinery in downtown Dalian, north China, has been shutting processing units since the end of 2023.

Now the last remaining crude unit, with a capacity of 200,000 bpd, will be switched off on June 30, according to Reuters’s sources.

Dalian Petrochemical accounts for almost 3% of the total Chinese refining capacity. The facility processes predominantly Russia’s Far Eastern ESPO crude grade.

The municipal authorities of Dalian have been pushing for years for the relocation of the refinery away from Dalian city.

The relocation and the closure of the Dalian Petrochemical facility are part of that plan after several deadly incidents over the past decade at the refinery, which is located in a densely populated area in Dalian city.

PetroChina’s parent company, CNPC, reached an agreement with the Dalian authorities two years ago to build a smaller, 200,000-bpd crude oil refinery at a new refining and petrochemicals site on Changxing island.

Yet, PetroChina has yet to take a final investment decision for the new refinery, Reuters’s sources said.

Stronger economic growth than previously expected and booming demand for petrochemicals will lift China’s oil demand by 1.1% this year, according to state giant China National Petroleum Corporation (CNPC).

However, China’s consumption of transportation fuels has peaked, Wu Mouyuan, vice president of CNPC’s think tank, said earlier this year.

Like CNPC, the International Energy Agency (IEA) also believes that oil demand for fuels in China has reached a plateau.

“With the overall Chinese economy pivoting from manufacturing to services-based growth and as the adoption of electric vehicles expands in the transport sector, the data strongly suggest that the combustion uses of petroleum fuel in China have already reached a plateau and that the potential for future growth may be very limited,” IEA market analysts said in March.

By Tsvetana Paraskova for Oilprice.com – Jun 04, 2025

Crude Processing At One of Europe’s Top Refineries Goes Offline

BP’s refinery in Rotterdam had both its crude units offline on Tuesday morning, Reuters reports, citing energy consultancy Wood Mackenzie.

A crude unit with a capacity of 200,000 barrels per day (bpd) went offline early on Tuesday. This follows the shutdown of the other 200,000 bpd crude unit in early May for planned maintenance.

As a result of the shutdowns, the 400,000-bpd oil refinery in Rotterdam now has both crude units offline.

The Rotterdam refinery is one of Europe’s largest and has the capacity to process 400,000 bpd of crude, or 19 million tons per year.

At the facility, BP produces gasoline, diesel, jet fuel, LPG, fuel oil, and raw materials for the petrochemicals industry. The refinery supplies all BP gas stations in the Netherlands and exports fuels to the U.S., Germany, Belgium, Luxembourg, Switzerland, and the UK.

The reduced refining capacity in Europe could boost refining margins for the other refineries at a time when the driving season and peak demand period for the year start.

Refining capacity closures and resilient fuel demand have tightened global fuel markets in recent weeks, benefiting refiners globally.

Refining margins have been rising this year and hit in May the highest global composite margin in more than a year. As the driving season begins and summer approaches, peak demand in the northern hemisphere is here.

Refiners, including U.S. refining giants, are benefiting from the higher margins, although these margins are far below the record highs seen in 2022 amid the oil market turmoil.

Still, global composite refining margins hit $8.37 per barrel in May—the highest level since March 2024, according to data from Wood Mackenzie cited by Reuters.

During the second quarter, the higher margins and demand are a boon to refiners, which saw increased turnaround activity and weak refining margins in the first quarter of the year.

By Tsvetana Paraskova for Oilprice.com / Jun 03, 2025

Norway’s Oil and Gas Investment Set for Record High in 2025

Investments in Norway’s oil and gas sector are set to hit a record high this year, led by increased investments in operating fields, Statistics Norway said on Tuesday in its latest survey of companies’ investment plans.

The quarterly survey of investment plans showed that total investments in oil and gas activity in Norway in 2025, including pipeline transportation, are estimated at $26.6 billion (269 billion Norwegian crowns), up by 6% compared to the estimates in the previous quarter.

“The upward adjustment for 2025 is to a large extent driven by higher estimates within the category fields on stream,” the statistics office said.

However, investments are expected to peak this year and begin to decline moderately from 2026 onwards. The estimate for 2026 is now at $20.5 billion (207 billion crowns), down by 4.3% from the expected 2025 investment level, according to the statistics office.

Investments in 2023 and 2024 jumped, due to Norway’s oil tax package from 2020 incentivizing operators to submit a plan for development and operation (PDO) for several new fields, Statistics Norway noted.

Inflation and rising supply chain costs have also boosted the value of the investments in the past two years.

Considering that “very few new developments have occurred since 2022”, it is not surprising that a moderate decline in investments in field development is indicated this year. But this decline in investment in field development is being offset by expectations of a very high planned investment activity in fields on stream, the statistics office said.

Further exploration efforts and new discoveries would be crucial to slowing the expected decline in Norway’s oil and gas production in the 2030s, the authorities of Western Europe’s largest oil and gas producer have said in recent years.

Production from the Norwegian Continental Shelf is expected to decline gradually in the coming years, the Norwegian Offshore Directorate said in April in its annual report.

“However, the level of this decline will depend on the volume of new resources discovered and how much of the discovered resources are developed and actually come on stream,” the regulator said.

By: Oil Price / May 28, 2025

ExxonMobil in talks to divest French refining, retail business Esso

ExxonMobil has started exclusive talks with Canadian fuel retailer North Atlantic over the sale of its stake in its French subsidiary Esso, including its Gravenchon oil refinery, the company announced on May 28.

A statement from ExxonMobil said it is negotiating with North Atlantic France over the acquisition of its entire 82.89% stake in the Esso business and its assets, including the 240,000 b/d refinery it operates in Normandy.

The companies are also discussing the sale of a 100% stake in ExxonMobil Chemical France, the statement said.

Subject to regulatory approval, the deal is expected to close in Q4 2025, after which North Atlantic will file a mandatory tender offer for the remaining shares of Esso SAF.

The Esso business is responsible for roughly 20% of the active refining capacity in France through its operation of Gravenchon and separate lubricants plant, according to its estimates.

Across the country, Esso also markets fuel and lubricants through a branded reseller network of around 750 sites.

In a new landing page on its website, North Atlantic set out aims to develop a “green energy hub” at Gravenchon with new low-carbon fuels and renewables projects, adding that the site is well-positioned to serve energy-intensive industries like data centers.

North Atlantic’s retail business in Eastern Canada and French territories Saint Pierre and Miquelon could also offer offtake certainty for the refinery, the company said, supporting strong utilization rates.

French divestments

For ExxonMobil, the Esso deal marks the culmination of a string of French divestments as it has concentrated on its US and Asian assets.

In 2024, the company began significantly downsizing its French downstream business, closing its chemicals operations in Gravenchon and later selling its 140,000 b/d Fos-sur-Mer refinery to a Trafigura-backed joint venture.

Completion of the Esso deal will leave ExxonMobil with just four remaining refinery stakes in Europe: Antwerp, Rotterdam, Fawley, and Germany’s MiRO.

Once a key asset for Exxon, Gravenchon attracted significant investment at the beginning of the decade, boosting yields of high-value products and helping it capture market share when rival Grandpuits stopped operating in 2021.

As France’s second-largest refinery, the site benefits from a direct pipeline connection to Paris airports and export flexibility from the nearby Le Havre terminal.

Nonetheless, the closure of the Gravenchon steam cracker signaled fading appetite from ExxonMobil to continue operating the site long-term, closing off the opportunity to capitalize on stronger petrochemicals integration as fossil fuel demand stalls.

In its statement, ExxonMobil said that the proposed sale aligns with its wider strategy, but stressed that Europe remains an “important region” for the business.

“ExxonMobil has been operating in France for over 120 years, and we plan to maintain a significant commercial presence with the Esso brand,” said Tanya Bryja, senior vice president of ExxonMobil Product Solutions.

Meanwhile North Atlantic CEO Ted Lomond called the acquisition a “pivotal moment” for the Canadian company to establish a European presence for the first time.

“We are eager to consolidate Gravenchon’s role as a vital center of French energy and industry for decades to come and grow North Atlantic into a premier transatlantic energy company,” he said.

European contraction

Analysts have warned that the exodus of IOCs from the European refining sector could precede a structural decline in margins around the turn of the decade.

According to an analysis by S&P Global Commodity Insights, ExxonMobil has already slashed its European refining capacity by around a third since 2000, mirroring downsizing by competitors such as Shell.

And as European producers eye rising operating costs and stalling oil demand, new global competitors in the Middle East, Latin America and West Africa promise to accelerate another wave of closures. Based on surplus capacity alone, the International Energy Agency sees at least 1 million b/d of European refining capacity at risk of closure by 2030.

After selling its Italian Augusta and Sarpom refineries and closing its 116,000 b/d Slagen site in Norway in 2021, ExxonMobil recently tried and failed to shed its stake in Germany’s largest refinery, MiRO, only to be blocked in court by co-owner Shell.

The exit of established refiners has encouraged smaller energy players and traders to venture into the sector, often with the aim of transforming assets to reduce their emissions.

Experts have warned that only investors with deep pockets, such as major commodity traders, will be equipped to properly fund billion-dollar decarbonization projects. However, Commodity Insights oil analyst Samy Tamarat said the transaction could signal a “potential lifeline” for Gravenchon.

“While the company’s low-carbon fuels ambitions will require significant investment, it will ensure the site has a future in a market where demand for traditional refined oil products is declining,” he said.

The completion of the Esso deal will include conditions to ensure continuous crude oil supply for Gravenchon and lasting purchase agreements for ExxonMobil, the company statement said. The deal valued Esso shares at Eur 149.19 ($168.86) per Esso share, before adjustments for changes in inventory value, cash payouts and other changes.

By Kelly Norways , Spglobal / May 28, 2025

US crude oil storage demand surges as traders brace for OPEC+ price war

U.S. crude oil storage demand has surged in recent weeks to levels similar to the COVID-19 pandemic, according to data from storage broker The Tank Tiger, as traders brace for a flood of increased supply in coming months from the Organization of the Petroleum Exporting Countries and its allies.


This month, OPEC+ agreed to accelerate oil output hikes for a second consecutive month in June as the group looks to punish over-producing members. OPEC leaders are also contemplating a similar increase in July, and could bring back as much as 2.2 million barrels-per-day (bpd) of supply to the market by November, Reuters reported earlier.
 
A secondary objective of the OPEC+ supply hikes is to win back market share from U.S. producers, who ramped up output to record levels in recent years while the OPEC+ was making deep supply cuts.
 
Brent crude futures slumped last month to a four-year low of $58.40 a barrel on fears the coming surge in OPEC+ supply could coincide with a global economic slowdown stemming from U.S. President Donald Trump’s trade war.
 
Sliding prices sent a signal to traders to store oil until prices recover, especially as the market structure shows a glut of supply forming next year, said Steven Barsamian, chief operating officer at The Tank Tiger.

By: Reuters  / May 22, 2025.

ADNOC Deepens Energy Partnerships with US Companies

 Strategic agreements announced during UAE-US business dialogue with President Trump will potentially enable $60 billion of US investments in UAE energy projects
   – US is top priority market for XRG and the company is set to boost investments across energy value chain focusing on expanding gas, LNG, specialty chemicals and energy infrastructure
   – Enterprise value of UAE energy investments into the US set to reach $440 billion by 2035
   – Agreements include development plan with ExxonMobil to expand the capacity of UAE’s Upper Zakum field, and with Occidental to explore increasing Shah Gas field’s capacity to 1.85 bscfd
   – New unconventional oil exploration concession awarded to US-based EOG, underscoring Abu Dhabi’s position as a trusted investment destination

ADNOC announced multiple agreements with United States (US) energy majors during the United Arab Emirates (UAE)-US business dialogue with US President Donald J. Trump. The agreements will potentially enable $60 billion of US investments in UAE energy projects across the lifespan of the projects.

The agreements include a landmark field development plan with ExxonMobil and INPEX/JODCO to expand the capacity of Abu Dhabi’s Upper Zakum offshore field through a phased development. ADNOC also signed a strategic collaboration agreement with Occidental to explore increasing the production capacity of Shah Gas field’s capacity to 1.85 billion standard cubic feet per day (bscfd) of natural gas, from 1.45 bscfd, and accelerating the deployment of advanced technologies in the field.

The agreements reinforce the shared commitment of the UAE and US to maintaining global energy security and the stability of energy markets. The enterprise value of UAE energy investments into the US is set to reach $440 billion by 2035, as part of the UAE’s $1.4 trillion investment plan into the country.

H.E. Dr. Sultan Al Jaber, Minister of Industry and Advanced Technology, ADNOC Managing Director and Group CEO, said: “The deep-rooted bilateral relationship between the UAE and the US is underpinned by our shared commitment to enabling energy abundance and we are reinforcing this commitment through these agreements with US energy majors. We see significant opportunities for further UAE-US partnerships across the energy-AI nexus and we look forward to working with our American partners to unlock long-term sustainable value and drive socioeconomic progress.”

The US is a top priority market for XRG, ADNOC’s global energy investment company, and the company is set to boost investments across the American energy value chain focusing on expanding gas, LNG, specialty chemicals and energy infrastructure.

Building on its ambitious investment plans for the US, XRG signed a framework agreement with Occidental subsidiary 1PointFive to evaluate a potential investment in a direct air capture (DAC) project in Kleberg County, Texas. The facility would remove up to 500,000 tons of CO₂ per year using commercial-scale DAC technology, with XRG considering a capital commitment of up to one-third of the project’s total development cost.

Abu Dhabi’s Supreme Council for Financial and Economic Affairs (SCFEA) also granted a new unconventional oil exploration concession to EOG Resources Inc. (EOG), a leading US-based hydrocarbon exploration and production company. The award for Unconventional Onshore Block 3, which covers a 3,609 square kilometer area within the Al Dhafra region of Abu Dhabi, is the first award of its kind to a US company and underlines the attractiveness of Abu Dhabi’s energy sector and its position as a trusted investment destination. ADNOC will oversee and assist with exploration activities in the concession and has the option to join a subsequent production concession.

The phased field development plan for Upper Zakum will leverage AI and industry-leading technologies and the deep expertise and strong partnership between ADNOC, ExxonMobil and INPEX/JODCO to sustainably grow production capacity and help meet rising global demand with industry leading low-carbon intensity barrels. Upper Zakum is part of the Zakum field which is the world’s second largest offshore field.

The plan will upgrade the Upper Zakum’s infrastructure to include AI-enabled remote operations, receive power from the UAE’s clean energy grid to reduce emissions, and enable the use of artificial islands for drilling activities to enhance environmental protection. Upper Zakum field is located 84 kilometers northwest of Abu Dhabi.

Shah Gas field is one of the world’s largest of its kind and is located 180 kilometers southwest of Abu Dhabi. The potential expansion of the facility will provide more gas for domestic industrial growth and liquefied natural gas (LNG) for export.

By: Euro-petroleo , 19/05/2025

Commodity Traders are the Market Makers of a New Era

As geopolitical instability, sanctions, and supply chain shocks become commonplace, physical commodity traders have emerged as indispensable agents to maintain the flow of energy, food, and raw materials.

By leveraging political and commercial networks, as well as centuries of collective trading experience, they act as the market’s shock absorbers – responding to disruptions in real time, frictionlessly reallocating supply where it is needed. Fragmented global trade, regional rivalries and resource nationalism have not diminished their relevance. On the contrary, commodity traders are now more important than ever.

Arbitrage is a core function for traders and plays an important market stabilizing role. When volatility occurs through supply glut, shipping bottlenecks, or panic, traders smooth the curves by injecting liquidity, rerouting cargoes or drawing on inventories. If Brent crude drops due to excess North Sea production while American WTI holds firm amid constrained US supply, traders seize the spread and, in doing so, nudge prices closer together. When shipping routes are upended – say, by Houthi missile attacks in the Red Sea or insurance premiums surging around the Strait of Hormuz – savvy operators reroute cargoes, adjust freight bookings and ensure the crude still reaches a willing refinery, albeit at a different margin.

Contango, where future contract prices exceed spot, has become increasingly common amid uncertainty over demand and storage availability. Traders with secure access to storage terminals are well placed to benefit. By purchasing commodities at current deflated rates and selling them forward at a premium, they effectively monetize time. While financially savvy, these strategies also temper price swings that would otherwise send markets into panic. By storing excess supply now, they reduce glut; by releasing it later, they prevent scarcity.

Related: The Case Against Fixing the Grid (Again)

Natural gas markets, particularly liquefied natural gas (LNG), have showcased this dynamic more vividly than any other. Europe’s scramble to replace Russian pipeline gas in 2022 created arbitrage windows so wide that traders with proper infrastructure reaped windfalls. LNG cargoes enroute to Asia were diverted mid-ocean to European terminals offering triple the price. When prices normalized, contango set in, and traders stored gas for seasonal release. This provided not only commercial benefit but also strategic breathing room for European governments. In one emblematic case, Trafigura signed a multi-billion-dollar agreement to supply German utilities with American LNG, effectively substituting Russia’s Gazprom. While governments passed legislation and held emergency meetings, it was trading desks that delivered energy where it was needed.

Recent Middle East instability, coupled with rising demand for natural gas across Asia, has amplified the premium placed gas market flexibility. Firms with access to deep storage and shipping capacity have found themselves well placed to respond. BGN, a well-known mid-market trader, has grown into a significant player in both LPG and LNG and its operations considerably reduce gas market volatility. It is also eyeing new gas developments in Africa as the continent experiences a gas demand boom thanks to growing economies.

“Across major African economies — South Africa, DRC, Nigeria, and Egypt, for example — there’s a clear and immediate demand for cleaner transition fuels like gas and LPG. As booming populations and rising economies put real pressure on inefficient, polluting biomass, we’re hearing louder and louder calls from Africa’s growing middle class for cleaner and more efficient fuels,” said BGN’s CEO, Rüya Bayegan.

BGN’s sprawling infrastructure footprint – spanning major production and demand hubs – enables it to absorb cargoes during oversupply and release them when and where demand increases. Well-positioned trading firms are positioned not only to reduce global gas disruption impacts, but to profit from their efforts.

The same applies to oil. Whether due to OPEC supply cuts or increases, embargoes or conflict – it is often traders who step in. Redirection of Russian oil following Western sanctions could have sparked a supply crunch. Instead, commodity traders sourced appropriate replacements for Europe. In more precarious environments, traders venture where major oil companies or state firms hesitate.

In metals and minerals, the narrative is similar. As the energy transition gathers pace, critical minerals such as cobalt, lithium, and rare earths have become strategic commodities. China’s recent curbs on mineral exports exposed the fragility of global supply chains. In response, commodity traders have moved swiftly to source alternatives. Trader Glencore, for instance, has forayed into cobalt in the Democratic Republic of Congo, operating two cobalt and copper mines that offer Western clients an alternative to Chinese-backed supply. Another example of traders entering territory where government are hesitant to enter. Traders’ agility and willingness to assume political risk ensures that vital inputs for batteries, solar panels, and semiconductors continue to circulate. As the West furthers its strategy to pivot away from Chinese-controlled critical mineral deposits, resource-rich African nations will likely open their doors to transparent and compliant traders and help launch news economic booms. 

Traders thrive in volatility. But in profiting from arbitrage, they prevent far worse outcomes: empty supermarket shelves, blackouts, and soaring petrol and diesel prices. Their gains are the cost of resilience. Traders act without public mandate, but often with great speed and precision. Their absence would expose markets to greater fragility. As long as the world depends on natural resources to prosper, commodity traders will remain the quiet architects of stability in an otherwise unruly system.

By Jose Chalhoub, Oilprice – May 12, 2025

US House budget bill seeks more than $1.5 billion for Strategic Petroleum Reserve

 A U.S. House committee released a budget proposal that includes more than $1.5 billion to replenish and maintain the Strategic Petroleum Reserve, and cancels a congressionally mandated sale, following huge sales from the facility in 2022.

The proposal from the House Energy and Commerce Committee released late on Sunday contains $1.32 billion to purchase oil to help replenish the SPR, the world’s largest emergency stockpile of crude, and $218 million for maintenance of the facility.

U.S. Energy Secretary Chris Wright had estimated in March that it would take $20 billion and years to accomplish U.S. President Donald Trump’s goal of filling the SPR, a move that would help domestic energy producers amid relatively low oil prices. The facility has the capacity to store about 727 million barrels and currently holds about 399 million barrels.

The House committee is controlled by Trump’s fellow Republicans and this move is part of a wider proposal to cut grants and loan financing in former President Joe Biden’s landmark climate law, the Inflation Reduction Act.

Biden, a Democrat, sold a record 180 million barrels from the SPR in 2022 after Russia, a leading oil producer, invaded Ukraine, bringing the reserve down to its lowest level in 40 years.

The House measure, which faces a committee vote on Tuesday, also repeals a congressionally mandated sale of 7 million barrels from the SPR through fiscal year 2027. The Biden administration had worked with Congress to cancel congressionally mandated sales to help keep levels in the SPR from falling.

The Department of Energy also issued a proposal in the Federal Register on Monday that would allow the government to buy oil for the SPR at an indexed price, instead of a fixed price – meaning the actual price of the oil could move higher or lower with the market.

The Biden administration had adopted a fixed-price rule, arguing that it helped in arranging quick purchases for the reserve.

The DOE said in the new proposed rule that fixed-price contracts have “only served to unnecessarily create confusion in the industry.”

By: Reuters / May 12, 2025

California refinery closures panic politicians

California could lose up to 17pc of its refining capacity within a year, triggering major concerns about its tightly supplied and frequently volatile products market.

US independent Valero announced on 16 April that it will shut or repurpose its 145,000 b/d Benicia refinery near San Francisco by April 2026. The firm is also evaluating strategic alternatives for its 85,000 b/d Wilmington refinery in Los Angeles. And independent Phillips 66 said in October that it would shut its 139,000 b/d Los Angeles refinery in the fourth quarter of this year.

Valero’s Benicia announcement brought a quick reaction from state officials. Governor Gavin Newsom on 21 April urged regulators at the California Energy Commission (CEC) to work closely with refiners through “high-level, immediate engagement” to make sure Californians have access to transport fuels. He has ordered them to recommend by 1 July any changes to California’s approach that are needed to ensure adequate fuel supply during its energy transition.

The message appears to have hit home. The CEC delayed a vote on new refinery resupply rules to provide time for additional feedback and consultation with stakeholders after the Valero announcement. The CEC also plans to introduce a rule this year for minimum inventory requirements at refineries in the state as well as possible rules on setting a refiner margin cap.

The new rules are part of an effort by Newsom to mitigate fuel price volatility in California, including the signing of two pieces of legislation known as AB X2-1 and SB X1-2. Refiners have been unhappy with the state’s regulatory and enforcement environment for some time. It is “the most stringent and difficult” in North America owing to 20 years of policies pursuing a move away from fossil fuels, Valero chief executive Lane Riggs says.

The long and short of it

Refinery closures are fuelling long and short-term supply concerns in California. The most immediate is an anticipated supply crunch at the end of this summer. Phillips 66’s plan to shut the Los Angeles refinery by October will deal a significant blow to the state’s refining capacity and is likely to occur at a time when Californian gasoline prices are most prone to volatility.

The US west coast is an isolated market, many weeks sailing time from alternative supply sources in east Asia or the US Gulf coast. California’s strict product specifications further limit who can step in when refinery output falls. The state sometimes sees price spikes in late summer and early autumn because the switch from summer gasoline blends leaves local inventories low while in-state refineries adjust to producing winter grades.

California gasoline prices spiked in September 2022 when stocks fell to a nine-year low on the west coast. Spot deliveries hit a record $2.45/USG premium to Nymex Rbob futures in the Los Angeles market at the time (see graph). Production problems at several refineries in southern California led to another spot price surge in September 2023. The California Air Resources Board (Carb) permitted an earlier switch to cheaper winter gasoline production in response to both events.

Refinery closures will force California to rely on imports in the longer term, leaving the state exposed to stretched supply lines. State regulators’ proposed solutions have raised eyebrows. The CEC’s Transportation Fuels Assessment report in August last year included a policy option in which California would buy and own refineries, which the state is not pursuing. Another option involves state-owned products reserves to allow rapid deployment of fuel when needed. The CEC and Carb regulators will also release a draft transportation fuels transition plan later this year.

By Eunice Bridges and Jasmine Davis , Argusmedia, 05 May 20205.

Saudi Arabia, India to deepen energy ties, to set up two oil refineries

An accord was reached to establish two oil refineries in India through a joint venture between the countries, India’s Ambassador to Saudi Arabia Suhel Ajaz Khan said in a briefing

Saudi Arabia and India agreed to deepen energy ties and pursue closer cooperation in areas like tourism and technology as the countries seek to strengthen relations at a time of turbulence for the global economy. 

An accord was reached to establish two oil refineries in India through a joint venture between the countries, India’s Ambassador to Saudi Arabia Suhel Ajaz Khan said in a briefing, without giving more details.  

The developments come 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, rather than staying in the kingdom until Wednesday, following one of the worst attacks on civilians in India’s northern Jammu and Kashmir region in years.

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 and follow on years of flirtation between the G-20 nations on partnerships for everything from oil to agriculture and technology. 

Saudi Crown Prince MBS had in 2019 pledged $100 billion of investments in India, but only about $10 billion of that has materialised. State-owned oil behemoth Saudi Aramco has also long sought entry into India’s refining sector with little success.

A plan to jointly build a mega complex in western India, for example, hasn’t come to fruition due to challenges over land and a proposal for a stake in Reliance Industries Ltd.’s mega refinery in Gujarat failed to fructify on valuation issues.  

It’s unclear if Aramco will be involved in the refineries mentioned by India’s envoy to Saudi Arabia on Tuesday. 

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. 

Ahead of his visit, Modi had said the two sides are exploring joint projects in refineries and petrochemicals, according to comments he made to Arab News.

By Sudhi Ranjan Sen and Sherif Tarek, Business Standard / Apr 23 2025.