Oil’s rally to $70 a barrel is threatening to clip India ’s economic wings at a time when Saudi Arabia is looking to join a $30 billion refinery project in the world’s fastest growing market.The South Asian nation wants to see prices at about $50 a barrel in order to manage its finances better, Oil Minister Dharmendra Pradhan said in an interview. Meanwhile, Saudi Arabia -- which is said to be aiming for oil near $80 to pay for its own crowded policy agenda -- is planning to sign a deal to participate in a refinery on India’s west coast as part of its strategy to secure sources of consumption for its crude.While Prime Minister Narendra Modi ’s administration reaped the benefits of the biggest price crash in a generation during its first term in power, oil is recovering as the government gears up for elections in 2019. Saudi Arabia, the world’s biggest crude exporter, is preparing for an initial public offering of its state-run producer and leading efforts by OPEC to curb output and eliminate a global glut that spurred oil’s decline.“We are a very price-sensitive consumer," Pradhan said on Tuesday. "From Indian consumers’ point of view, I will be more than happy if the price is around $50 a barrel." Saudi Arabian Oil, known as Saudi Aramco, has agreed in principle to join a proposed 1.2 million barrel a day refiner on India’s west coast, he added.Saudi Aramco’s Chief Executive Officer Amin Nasser will sign a memorandum of understanding on Wednesday for the project with RRPC, or Ratnagiri Refinery & Petrochemicals, a consortium consisting of state-run refiners Indian Oil, Hindustan Petroleum and Bharat Petroleum, said a person familiar with the matter who asked not to be identified before an official announcement.Aramco may take a 50 percent equity stake in the project and can bring in another strategic investor, the person said. Nobody immediately replied to an email seeking comment sent to Aramco’s press office outside regular business hours.“Things are on the table, we are discussing with each other,” Pradhan said, referring to Saudi Arabian participation in the project. “It has to be a win-win situation for both. It must be acceptable to them, it must be profitable for me also.’’ He confirmed on Wednesday that a preliminary deal will be signed with Aramco.Saudi Arabia has been edged out as the top oil supplier to India amid an intensifying race among producers to retain their most-prized markets. India, which imports about 80 percent of its crude requirements, has been diversifying its sources of oil supply and is seeking more favorable terms from producers in the Middle East.The potential partnership in India would be an extension of Aramco’s strategy to lock up market share by investing in refineries in Asia, the region that’s driving global oil demand growth. Over the last few years, the Middle East kingdom has committed billions to projects in Malaysia and Indonesia, as well as a new refining and petrochemical plant in China.Saudi Arabian Energy Minister Khalid Al-Falih is scheduled to speak at the 16th International Energy Forum in New Delhi this week, along with other Middle Eastern countries’ ministers.(DISCLAIMER: This column does not necessarily reflect the opinion of economictimes.com, Bloomberg LP and its owners)