Saudi Aramco, the world’s top oil firm and single biggest crude exporter, is in discussions to invest in two planned refineries in India, sources in India told Reuters on Thursday.

State-owned Indian refiners plan to build several new crude processing plants to meet soaring fuel and petrochemicals demand in the world’s third-largest crude oil importer.

Saudi Arabia, for its part, looks to lock in future term sales for its crude in the top Asian markets, which are set to continue driving global demand growth in the coming years. India has even surpassed China as the single biggest driver of demand growth.

Aramco already has several deals with Chinese refiners and petrochemical producers as the Saudi oil giant has been pursuing deals in recent years to expand its international downstream presence, especially in demand centers such as Asia.

Now Saudi Aramco has set its sights on investment in the new Indian refineries expected to be built. The Saudi oil giant is offering to supply crude volumes equivalent to three times its future stake in each project, according to Reuters’ sources.

Saudi Aramco is discussing buying a stake in Bharat Petroleum Corporation Ltd (BPCL)’s $11 billion new refining and petrochemical complex in south India, and is in separate talks with Oil and Natural Gas Corporation Limited (ONGC) for a proposed refinery in the Gujarat state on India’s west coast, the sources told Reuters.

However, Indian refiners are continuously looking for cheaper crude and diversified supply, and the Saudi proposal to supply a large part of the oil for the new refineries may not work.

BPCL’s refinery project is at a more advanced stage and the state-owned refiner has already launched some preliminary work on the project, including land purchase.

For years Saudi Aramco has been trying to tap downstream opportunities in India. The oil giant has tried – and failed – to reach a deal with private refiner Reliance Industries.

By Charles Kennedy, oilprice.com – Mar 27, 2025.