Saudi Arabia back as India’s top oil supplier after Reliance deal

Saudi Arabian Oil Co (Aramco) buying a 20 per cent stake in Reliance Industries’ oil-to-chemical business will help it regain the position of being the biggest supplier of oil to the world’s fastest-growing oil market.

Saudi Arabia, which traditionally has been India’s top oil source, lost the slot to Iraq during the last two financial years.

This will change with Aramco buying 20 per cent stake in RIL’s oil-to-chemical (O2C) business, which has an enterprise valuation of $75 billion as it will be accompanied with a deal to supply 500,000 barrels per day or 25 million tonnes a year of crude oil.

“Crude supplies of 500,000 b/d represents about 40 per cent of Reliance’s crude intake, significantly higher than the stake taken, although Saudi Aramco historically supplied 20 per cent of Reliance’s crude oil requirements,” said Alan Gelder, vice-president refining and chemicals at Wood Mackenzie.