Saudi Arabia’s plan to sell a 1% stake in its oil giant Saudi Aramco for $ 19 billion is expected to have an impact in India, industry experts say. Aramco may be in talks with one of China’s state-backed oil majors, reports suggest. Saudi Arabia’s Crown Prince Mohammed bin Salman confirmed the possible sale to the world’s largest oil company on Tuesday.

Aramco has also shown its eagerness to seek opportunities in India in recent times. The world’s largest oil producer is in talks with Reliance Industries (RIL) to take a 20% stake in the latter’s refining and petrochemicals business for $ 15 billion. Aramco had also partnered with Indian public sector companies to jointly build a refinery and petrochemical complex in Maharashtra.

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Agreement negotiations with RIL are progressing, although the project in Maharashtra has failed to gain momentum.

Relations between governments were also not harmonious. The governments of India and Saudi Arabia have recently quarreled over crude oil prices. India, the third-largest importer and consumer of crude oil, recently asked public-sector crude refiners to increase imports from the United States and Africa following the ruling. Saudi Arabia to increase the official selling price (OSP) of oil shipments to Asia in May. The move by Saudi Arabia, the world’s largest exporter of crude, was largely conceived as a response to India’s plan to reduce the country’s crude imports.

The Modi government has asked the Kingdom to increase crude production as it will reduce demand and lower prices. Oil Minister Dharmendra Pradhan said earlier that high crude prices had hurt developing countries in their economic recovery from COVID-19. In response to Pradhan’s request, his Saudi counterpart, Prince Abdulaziz bin Salman, advised India to use the stocks of crude it had bought at low prices during the price drop in 2020. Pradhan a qualified Abdulaziz’s response as “non-diplomatic”.

In contrast, China had imported more oil from the Kingdom than from any other country in 2020. China wants to deepen its relations with the Saudis for geopolitical reasons, experts say. “If Aramco’s current negotiations go with the Chinese company, we have to see how they prioritize business in India,” one analyst said.

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