The source says that the Saudi defense agreement with Pakistan disrupts oil flows to India

A source told CNBC that the new joint defense agreement in the Kingdom of Saudi Arabia with Pakistan is unlikely to change the relationship of Riyadh’s energy with the main consumer India.

In response to a question about whether India will continue to buy Saudi barrels, a great source familiar with the matter told CNBC, “Of course.”

The source, who was unable to speak unidentified except because of the sensitivity of the issue, added that the Kingdom of Saudi Arabia is looking to enhance its security by expanding its alliances, but not at the expense of its commercial relations.

India, which has contradicted the neighboring Pakistan for decades, is one of the largest raw consumers in the world and a major customer in Saudi Arabia. He sold a little more than 600,000 barrels per day in July, making it one of the three suppliers in India alongside Russia and Iraq, according to KPLER data.

The source also rejected long -term speculation about the transformation of the US dollar for the Saudi oil trade, and described the talk about the arrangement of pricing other than Greenback as a “Phantom Agreement”.

Pricing the dollar The basis remains One of the Saudi raw exports, even with the balance of Raydeh Security relations With the United States and Pakistan – with the expansion of energy trade with India, a Brix colleague’s alliance member.

“The Kingdom of Saudi Arabia has always been a very strong partner for us,” Asif Iqbal, President of the Indian Economic Trade Association, told CNBC on Friday.

“It is in their interest,” Iqbal said, stressing that the agreement should be seen through the lens of national priorities. “These countries have their own interests, just like India have their own interests.”

The government of India said it “realizes that this development, which weakens a long arrangement between the two countries, was under study.” statement In response to the Saudi -Pakistani agreement.

“We will study the effects of this development for our national security, as well as for regional and global stability,” the statement added.

CNBC contacted Saudi and Indian ministries to comment.

The agreement, signed by Saudi Crown Prince Mohammed bin Salman and Pakistani Prime Minister Shaybaz Sharif in his head, Marx a Deepening relationships Between two partners. It also comes at a time when the Gulf states blow more than the guarantees of defense of the United States Israel’s blow inside Qatar.

“They are burning to other partners, because there is this perception that the United States will not lie as its promises as it was usual,” Rashmi Garji, the portfolio manager in the beloved, told CNBC on Friday.

She added: “Until now we have not seen any break in the relationship between the United Arab Emirates and other geographical regions of the Gulf Cooperation Council and the United States. Even the image of the customs tariff was somewhat benign for them. So far, I think things remain good here – but this is something that must be kept in the background of the mind.”

At the same time, India has also strengthened its Gulf relations. The Indian Minister of Trade Biosh Joyal was in the UAE last week to review the progress made in the comprehensive economic partnership agreement. Abu Dhabi is also the highest crude supplier to India, where it sells about 400,000 barrels per day with the connection of June, according to KPLER.

“At the next 6 to 12 months,” said Minberrett Jill, the chief investment official in Africa, the Middle East and Europe in Standard Charter, Wildetle Managent, at least over the next 6 to 12 months.

“Despite all the geopolitical events that we have seen in this region or anywhere, it may eventually increase oil prices that it is very temporary,” he said, indicating that WTI futures will remain near $ 65 a barrel.