India’s crude oil reserves are set to increase by around 70%, with the UAE’s Abu Dhabi National Oil Company (ADNOC) taking charge to ensure India’s energy security.
The agreement comes as part of PM Modi’s five-nation tour, which started with a visit to the UAE. He arrived in Abu Dhabi on Friday (May 15) for a two-hour layover, where he met UAE President Sheikh Mohamed bin Zayed Al Nahyan to hold discussions and sign pacts on energy, defence, and shipping.
The UAE has begun storing crude oil in India and has leased a storage facility in Mangalore, where it currently stores 6 million barrels of crude oil, which it plans to increase to 30 million barrels.
According to The Times of India, currently, “The Indian Government… holds petroleum reserves of 5.3 million tonnes at Visakhapatnam, Mangalore, and Padur, which equals around 38 million barrels.” When the UAE achieves its target capacity, both nations' combined capacity will reach 68 million barrels of crude oil reserves. This will provide major relief to India in the future.
Both countries have also signed agreements related to LNG and LPG storage in India, as well as crude oil storage in Fujairah for India.
The UAE is able to take such a stance due to its recent exit from the Organisation of Petroleum Exporting Countries (OPEC), which occurred in April. The UAE’s Energy Minister, Suhail Mohammed al-Mazrouei, told Reuters that it "is a policy decision; it has been done after a careful look at current and future policies related to the level of production." He also stated that energy demand would increase in the future. Hence, this move is beneficial for the UAE, as quota restrictions are imposed on all OPEC member countries, and this decision allows them to increase crude oil output.
