India and UAE to Sign Two Major Energy Agreements

Prime Minister Narendra Modi’s visit to the United Arab Emirates (UAE) on May 15 may be brief, but it is expected to be highly significant for cooperation in the energy sector.

India and the UAE are preparing to sign two major agreements related to LPG supply and strategic petroleum reserves during the visit.

India Becomes First Energy Partner After UAE's OPEC Exit

Recently, the UAE exited the Organization of the Petroleum Exporting Countries (OPEC), and India will become the first country to sign a new energy cooperation agreement with the UAE after this development.

Before beginning his tour of four European nations — the Netherlands, Sweden, Norway, and Italy — Prime Minister Modi will visit the UAE, where he is scheduled to meet President Mohammed bin Zayed.

Strong India-UAE Energy Partnership

India and the UAE already share a strong partnership in the energy sector.

• The UAE is India’s fourth-largest supplier of crude oil.
• It fulfills around 11% of India’s total crude oil requirements.
• The UAE is also India’s largest supplier of LPG cooking gas.
• It supplies nearly 40% of India’s LPG demand.

Major LNG Agreement Signed Earlier

During the UAE President’s visit to New Delhi in January this year, both countries signed a 10-year LNG supply agreement worth 3 billion dollars.

With this agreement, India has become the largest buyer of LNG from the UAE.

Possibilities of Oil Storage Expansion

According to sources, the UAE is interested in exploring additional oil storage opportunities in India to strengthen the country’s energy security during emergencies.

Earlier, in 2017-18, India and the UAE signed an agreement for strategic crude oil storage.

Under that agreement, Abu Dhabi National Oil Company and Indian Strategic Petroleum Reserves Limited agreed to store 5.86 million barrels of oil at the Mangaluru storage facility.

Recently, both countries have also held discussions to expand this agreement and increase additional storage capacity.

India-UAE Relations Reach New Heights

In recent years, relations between India and the UAE have reached unprecedented levels.

Cooperation has expanded in sectors such as:

• Trade
• Investment
• Defense
• Technology
• Energy Transition

Both countries aim to increase bilateral trade to 200 billion dollars by 2032.

New Opportunities Amid Regional Changes

Changing geopolitical conditions in the Gulf region are opening new opportunities for India-UAE strategic cooperation.

Rising tensions and growing distance between Saudi Arabia and the UAE are also expected to influence South Asia and create new possibilities for deeper India-UAE partnerships.