That strategic relationship was evident last week with the rapid rush of LMO and other consignments sent by the Gulf states to India – which came a day after Indian state refiners reversed steep cuts in Saudi oil imports for May at the directions from oil ministry, and placed orders for regular purchases in June.
Indian state refiners buy about 15 million barrels of Saudi oil in a month from Saudi Aramco. India, the world's third-biggest oil importer and consumer, imports more than 80 per cent of its oil needs and relies heavily on the Middle East.
An Indian oil industry source told Reuters that the federal oil ministry has not asked refiners to cut Saudi oil imports after Riyadh supplied liquid medical oxygen and cryogenic tanks. The refiners had cut purchases by more than a third in May.
Indeed, the backbone of trade and investments between India and the Gulf has been the hydrocarbon sector. For 2019-20, India’s hydrocarbon trade with the region was worth $62 billion, which is 36 per cent of total hydrocarbon trade. Saudi Arabia and the UAE have partnered India in the Strategic Petroleum Reserves (SPR) programme, while in a historic agreement during PM Modi’s visit to the UAE, a consortium of Indian oil companies were awarded a 10 per cent interest in Abu Dhabi’s offshore Lower Zakum concession.