India and Saudi Arabia are significantly strengthening their bilateral trade relations and energy cooperation amid regional supply chain disruptions. Union Commerce and Industry Minister Piyush Goyal and Saudi Arabia's Trade Minister Majid bin Abdullah Al Qassabi held virtual discussions on April 11, 2026, focusing on strengthening India-Saudi Arabia trade relations, enhancing energy supply cooperation, and advancing negotiations for trade agreement between India and Gulf Cooperation Council (GCC) countries. The discussions assume particular significance as the blockade in the Strait of Hormuz due to West Asia conflict is impacting crude oil imports and energy security, with both nations noting the strain conflict has put on regional supply chains.
Bangladesh is seeking $3.25 billion in budget support to secure energy and food supplies, as reported by The Business Standard. This represents a significant escalation in the country's efforts to address its critical energy security challenges. The government is actively exploring various funding mechanisms to strengthen its energy infrastructure and reduce dependence on costly imports. The Middle East war has disrupted supplies from the region, with March shipments of crude oil from Saudi Arabia and Abu Dhabi – each carrying around 1 lakh tonnes – being cancelled, resulting in no crude consignments during the month.
Bangladesh is considering a novel approach to secure Russian crude oil supplies through India's refining capabilities. According to The Times of India, the arrangement under consideration would require Bangladesh to pay for the import of crude oil, its refining in India, and the transportation of the refined fuel back to Bangladesh. The energy and mineral resources division has already moved the proposal forward this week, sending a request to the country's power and energy minister Iqbal Hasan Mahmud Tuku for approval to begin discussions with the ministry of foreign affairs for a government-to-government agreement.
Bangladesh's energy security faces severe constraints as the country imports between 65-68 lakh tonnes of fuel annually, with crude oil accounting for about 15 lakh tonnes — all refined at the existing Eastern Refinery Limited (ERL). The country also imports around 45 lakh tonnes of refined fuel, mainly diesel, from countries like India and China. As reported by The Business Standard, refining capacity has remained stagnant since independence, forcing Bangladesh to rely heavily on costly refined fuel imports and increasing pressure on foreign currency reserves. The state-run Bangladesh Petroleum Corporation (BPC) has started exploring crude options beyond Middle Eastern countries while seeking technical recommendations from ERL on suitable crude specifications.
Bangladesh's lone state-run refinery in Chittagong faces significant technical challenges in processing Russian crude oil. As reported by The Times of India, the facility has an annual refining capacity of 1.5 million tonnes but is mainly designed to handle crude from the Middle East. The refinery was originally designed to process Arabian Light crude from Saudi Arabia and Murban crude from the UAE, but heavier crude types such as those from Russia cannot be refined using the existing setup. With no blending facility in place, the refinery lacks flexibility to adapt to alternative sources. ERL has analysed crude specifications from several countries including Nigeria, Azerbaijan, Norway, Angola, and the UK, and submitted its findings to BPC for review.
A long-delayed project to build ERL's second unit – which would double refining capacity to 30 lakh tonnes annually – has faced repeated setbacks despite being first proposed in 2010. The project was approved in various forms over the years but took more than a decade and a half to receive final approval from the Executive Committee of the National Economic Council (Ecnec) in December last year. The project, now estimated to cost around Tk 31,000 crore, is being explored for financing options including potential loans from external sources such as the Islamic Development Bank. Officials say the new unit will be designed with greater flexibility to process a wider range of crude oil, addressing one of the key weaknesses of the current refinery.
Energy cooperation between India and Bangladesh has been strengthening with rising diesel imports from India featuring prominently during the Bangladesh Foreign Minister's recent visit to India. According to The Times of India, the two countries already maintain cross-border energy connectivity through a diesel pipeline running from Siliguri to Parbatipur in Dinajpur. That pipeline allows imports from Numaligarh Refinery Limited under a 15-year agreement signed in 2023, demonstrating existing bilateral energy infrastructure. The India-GCC trade relationship has reached significant scale, with bilateral trade reaching $178.56 billion in FY25, accounting for 15.42% of India's global trade. India and the GCC are negotiating a free trade agreement, with ministers expressing optimism for early progress in these negotiations.
