Saudi Arabia almost sunk Russia’s multibillion dollar oil deal with India

A multi-billion-dollar Russian deal to buy Indian refiner Essar was nearly sunk at the eleventh hour by a rival bid from Saudi Arabia as the two oil superpowers vie for supremacy across the world.

The deal between Essar and a consortium led by Kremlin oil giant Rosneft appeared dead in the water two months ago afterSaudi state energy firm Aramco weighed in, according to seven Russia, India, and Saudi-based industry sources familiar with or involved in the negotiations.It was salvaged due to the involvement of Russian President Vladimir Putin and Indian Prime Minister Narendra Modi, who were keen for it go through, and after the consortium agreed to pay $13 billion – more than double what Rosneft had initially valued Essar at, sources told Reuters.

The tussle for Essar – a state-of-the-art plant in the world’s fastest-growing fuel market – illustrates the growing battle for oil markets between Russia and Saudi Arabia, the world’s two largest crude exporters.It also sheds light on the challenges OPEC member Saudi Arabia and non-OPEC Russia – which are also fighting a proxy conflict in Syria’s civil war – will face in trying to clinch a global agreement to limit output growth to prop up oil prices.

 

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