India and the UAE are forming a new energy reservoir

India expands strategic oil and gas reserves to strengthen energy security

India and the United Arab Emirates have agreed to expand strategic oil and gas reserves to enhance energy security in response to supply disruptions from the Middle East.

During a brief visit by Indian Prime Minister Narendra Modi to Abu Dhabi, an agreement was reached between India and the UAE to increase oil storage facilities. This includes increasing India’s crude oil storage capacity to 30 million barrels in collaboration with Abu Dhabi National Oil Company (ADNOC). The creation of strategic gas reserves in India is also being considered, as well as the potential expansion of oil storage at Fujairah port in the UAE. Although specific implementation timelines for these projects have not yet been announced, this agreement demonstrates the countries’ intentions to enhance energy stability amid a complex geopolitical situation.

The need for these changes arose due to supply disruptions through the Hormuz Strait, a key route for global oil trade. India, which imports half of its crude oil and nearly all its liquefied gas from the Middle East, faced significant challenges, highlighting the issue of limited oil reserves and the lack of sufficient gas reserves.

For the UAE, this agreement creates new export opportunities outside the Persian Gulf. Following recent constraints in the Hormuz Strait, the UAE plans to double overseas flows with a new pipeline to Fujairah port, set to operate by next year.

Additionally, Indian Oil Corporation and ADNOC have agreed to expand cooperation in the trading and supply of liquefied gas, which will strengthen the strategic partnership between these countries.

India already has strategic oil reserves of about 39 million barrels, and the new agreement with the UAE is part of a broader policy to create an energy buffer. This is crucial for India, as it heavily relies on imported energy resources.