In a signal of shifting global energy alliances, Saudi Arabia and India have cemented a deeper cooperation framework that spans traditional hydrocarbons and emerging clean technologies. The bilateral accord, reached during Indian Prime Minister Narendra Modi’s recent visit to Riyadh, sets the stage for a more complex, multipolar energy world—one in which energy security, climate strategy, and industrial development are being reconfigured simultaneously.
Hydrocarbons Remain Strategic, But No Longer Singular
While two proposed oil refineries stand out as headline outcomes, their significance lies less in their capacity and more in their geopolitical utility. With India poised to become the world’s largest crude oil importer by 2027, according to the International Energy Agency (IEA), and Saudi Arabia facing long-term demand uncertainties, the refineries signal a hedging strategy. Both nations are fortifying supply reliability, but they are also diversifying influence beyond volatile global oil markets.
The agreement to cooperate on market stability across “all fuel types” signals a shift from oil-centric diplomacy toward integrated energy resilience—an acknowledgment that energy security is no longer measured solely in barrels.
Hydrogen Collaboration: Strategic, But Still Nascent
India and Saudi Arabia’s shared ambition to scale hydrogen markets marks a notable expansion in bilateral energy cooperation, though its commercial maturity remains limited. India’s National Green Hydrogen Mission targets 5 MMT (million metric tons) of annual green hydrogen production by 2030, while Saudi Arabia’s NEOM-based Helios project is on track to deliver 650 tons per day by 2026.
However, beyond aspirational targets, the pathway to cost-competitive hydrogen hinges on critical bottlenecks in electrolyzer supply chains, storage technologies, and cross-border certification frameworks—none of which were substantively addressed in the official communiqué. The announcement highlighted plans to “stimulate demand” and “advance transport and storage,” yet progress risks were more rhetorical than structural, without quantified commitments.
Carbon Strategy: From Reduction to Circularity
Departing from more common zero-emission pledges, the two nations’ focus on the circular carbon economy (CCE) underscores a pragmatic stance. The CCE framework—advocating reuse, recycling, and responsible sequestration—remains controversial in some climate circles for including carbon capture and fossil-based offsets. Yet it offers a politically viable pathway for petrostates and coal-heavy economies to remain engaged in climate diplomacy without committing to absolute phase-outs.
This approach also reveals a convergence in political economies. Saudi Arabia, whose Vision 2030 still hinges on hydrocarbon revenues, and India, whose industrial base is still 55% coal-dependent, both favor emissions mitigation strategies that preserve energy sovereignty.
Supply Chains and Infrastructure: Bridging Industrial Interests
The dialogue on joint infrastructure and supply chain development reflects a broader industrial logic. India’s underdeveloped energy infrastructure—its grid losses still hover above 18%—requires external investment, while Saudi capital seeks diversification outlets amid oil market volatility.
Energy efficiency gains across buildings and transport sectors are also part of the bilateral agenda. Yet again, the announcement lacked quantitative goals or clear funding mechanisms—leaving questions about the timeline and scope of implementation.
Climate Framing: Shared Language, Divergent Imperatives
While reaffirming their support for the Paris Agreement, Saudi Arabia and India offered no new emissions targets. This signals a continuity of “national circumstances”-based approaches, resisting the pressure for uniform decarbonization timelines. Modi’s endorsement of the Saudi Green Initiative and Saudi recognition of Indian-led frameworks like Mission LiFE and the International Solar Alliance suggests a diplomatic balancing act—mutual affirmation without mutual alignment.
Strategic Implications: Realignment Over Reinvention
At its core, the energy pact is less about innovation and more about institutional resilience. It reflects how middle powers are recalibrating their global roles—not by abandoning fossil fuels or embracing radical decarbonization, but by building diversified, bilateral energy architectures.
The Saudi-India agreement, while lacking in specifics, is emblematic of a larger trend: the reordering of global energy diplomacy through multipurpose, multi-energy partnerships. In a fragmented energy transition, such deals could prove more consequential than headline climate summits—especially if they translate into infrastructure, market access, and scalable technologies in the decade ahead.
