The Mecca Joint Defence Agreement, the tripartite security agreement between Saudi Arabia, Turkey, and Pakistan has raised some concerns in India. While terms of the Accord have not been made public, lazy commentary has termed it an ‘Islamic Nato’ – where an attack on one member will be considered an attack on all members. This seems unlikely as the three countries have different motivations that have prompted them to create the alliance, and different capabilities that they bring in.
Two of the three members, Pakistan and Turkey, have economies in crisis. Pakistan requires constant financial support, much of it from Saudi Arabia, to keep its economy afloat. Turkey continues to suffer from high inflation – which peaked at over 70% in 2022 and has averaged over 50% for the past four years. Both these countries require external financial help, which Saudi Arabia can provide. In return, Saudi Arabia seeks to replace the reduced American military footprint in the Persian Gulf region – which now seems a likely outcome of the war. Saudi’s own record in conflicts, such as the one with Houthis, indicates its limited military capabilities. While this is not stated, the tripartite alliance seems a cash-for-protection deal.
A serious concern flagged off as a result of the alliance is that of closer Saudi-Pakistan ties, including greater diplomatic cover for Pakistan, especially against India. However, this may be overstating the case. A reading of the world energy market indicates that Saudi-India ties are at a different level entirely, compared to the Saudi-Pakistan relationship, and are unlikely to be negatively affected by this development.
Saudi Arabia is the world’s largest exporter of oil, which forms the basis of its prosperity. Oil trade also dictates Saudi ties with other nations. The disruption due to the ongoing U.S.-Iran war in the Persian Gulf is perhaps the biggest ever since World War II, but the price of oil has stayed below its historical levels. At its peak, in 2007, oil price touched $147/barrel – over $200/barrel at today’s value, versus an oil price of $90/barrel or so at present. The relatively moderate increase in oil prices, despite the severity of the disruption, indicates a well-supplied oil market. Countries like the U.S. have increased their oil supply and export and Russia continues its export of oil despite sanctions. Consequently, six months into the crisis, and there aren’t fuel lines outside the pumps.
From an oil supplier’s perspective, a world well-supplied with oil is the anti-OPEC: instead of supplier-security, it is demand-security that will be a major concern in the future. For India, which is a larger importer with a growing demand for oil, moderate energy prices will be a welcome tail wind.
Simultaneously, there is a shift in oil demand patterns – oil consumption of European nations and Japan, all major users in the 1980s, has been falling consistently over the past four decades. China’s economy, which drove the growth in global demand for the past twenty-five years, is also slowing down. India, which imports over 4 million barrels/day of oil, is the only large oil market projected to grow over the next two decades past 10 million barrels/day of imports. A supporting data point is the price of diesel, which in end-August 2026 exceeded the crude oil price by $100/barrel. This indicates that oil refiners are making more money (briefly) compared to oil producers because historically, refining and retail have been the poor cousins of production and have accounted for a much smaller share of the pie. This is also an indication of the increased importance of market access visa-vis control over oil supplies.
Thus, from an oil exporters perspective, India is one of the most important economic partners going forward. India’s relationship with Saudi Arabia, Russia, or the United Arab Emirates, should be viewed from that perspective. This is also evident from continued Saudi interest in investing in India’s downstream energy infrastructure. It is unlikely that Saudi Arabia will risk a partnership crucial for its economic security to help a client state like Pakistan,
A significant new connector in Saudi-India ties is the India-Middle East-Europe Economic Corridor (IMEC), announced in 2023 during India’s G20 presidency. The planned multi-modal corridor which connects India to Europe via the UAE, Saudi Arabia, Jordan and Israel, is currently stuck because of the two conflicts in West Asia – Israel-Hamas and U.S.-Iran. Turkey and Pakistan were not a part of IMEC, and their alliance with Saudi Arabia is being viewed as a potential negative for the corridor.
While IMEC remains uncertain, the U.S.-Iran war in fact shows its long-term potential. IMEC has little utility as a conduit for containers of goods moving from India to Europe. Shifting containers from a ship to train, then moving them on a train, and then again loading them on a ship – these are all expensive actions. The closure of Hormuz, and the subsequent attacks by Houthis in Bab al Mandab, have shown the vulnerability of Saudi Arabia’s existing oil export routes.
Riyadh can bypass both these chokepoints if it is able to build oil pipelines to the Mediterranean Sea and the Arabian Sea – which can run along the proposed IMEC route and will be far safer than the existing paths. IMEC can also be a route for moving data, via optic fibre cables. Global internet traffic moves on sub-sea optic fibre cables, many of which pass through the Red Sea. Disrupting global internet traffic can be as simple as dragging a ship’s anchor along the seabed to physically cut cables. Data cables using the land route across the UAE and Saudi Arabia will be safer than cables passing close to Houthi controlled territory. Thus, while IMEC remains an uncertain prospect right now, it may have a long-term logic that will be difficult to resist.
India’s growing economic heft makes more important as a partner for oil exporters in the Gulf compared to Pakistan, which struggles for ‘strategic partnerships’. India should work at deepening these productive ties, through mutual investments and connectivity initiatives such as the IMEC. Economics often trumps strategy.
Amit Bhandari is Senior Fellow for Energy, Investment and Connectivity.
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