India and Saudi Arabia reset their relations amicably

 

India and Saudi Arabia relations

The crude oil markets are in turmoil on many fronts and the price has been falling for the past few days, although the rate of fall gradually came down – an indication the values may turn green on the stock traders soon.

In these circumstances, the last thing that any investor in the sector wants to hear is the infighting in the OPEC+ or conflicts involving buyers and producers.

Against this backdrop, the talks between the new Indian Minister for Petroleum and Natural Gas, Hardeep Singh Puri, and his Saudi counterpart, Prince Abdulaziz bin Salman, was a good sign in boosting the positive sentiments in the crude oil markets.

Since India is the world’s third largest importer of the crude oil, warming relations between the two old allies are good for both sides and the region.

The relations between the two countries deteriorated in April over the production cuts by the OPEC+ and the Saudi minister and the former Indian Minister for Petroleum and Natural Gas publicly fell out that resulted in India’s oil imports from the Kingdom being curtailed – perhaps, the minister losing his portfolio, a few months later as a result.

Judging by the sentiments expressed by the new Indian Minister for Petroleum and Natural Gas and Prince Abdulazis bin Salman, the relations appear to be on a solid footing; Saudis may take the production issue seriously as a gesture of goodwill , a major concern of India in pursuit of reviving its battered economy.

The disagreement between the UAE and Saudi Arabia that rattled the markets recently, meanwhile, was a major serious development within the OPEC+ for years, because there were supposed to be strong allies – Arab, Sunni Muslim neighbours.

They were in unison in quite a few policy decisions too: the stance against Qatar, a few years ago, the fighting in Yemen, and the disagreement with Russia over the crude oil price last year, to name but a few.

On Tuesday, meanwhile, there was a false dawn; the supposedly amicable deal reached by Saudi Arabian and the UAE; the UAE quickly denied that was the case and the crude oil markets slipped into downward spiral; crude markets are still trying to recover from the shock.

Although there is no sign of an agreement between the two countries, they clearly are talking to each other – an encouraging sign. As the international pressure grows, they may reach an irreversible agreement that could get the nod from the fellow OPEC+ member in turn, as the latter do not want to be in this limbo either.

 

 

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