New Delhi, May 19: Prime Minister Narendra Modi’s visit to the United Arab Emirates (UAE) has proven to be strategically significant. During this visit, several crucial agreements in the energy sector were established between India and the UAE, coinciding with geopolitical tensions and instability in the oil market in West Asia.
Experts suggest that this trip is part of India’s strategy to secure its energy needs in the long term. Given the increasing uncertainty in the Middle East, this initiative has become even more vital.
This visit marks the first phase of Prime Minister Modi’s tour of five countries. Following the UAE, he is set to travel to the Netherlands, Sweden, Norway, and Italy.
The timing of this trip is particularly noteworthy, as the UAE recently decided to exit the Organization of the Petroleum Exporting Countries (OPEC). This move allows the UAE to increase oil production beyond its previous limits.
India imports nearly one-tenth of its crude oil needs from the UAE and is also the UAE’s largest LNG customer. Consequently, the increased production is seen as beneficial for India.
According to government sources, a strategic agreement has been reached between Indian Strategic Petroleum Reserve Limited and the Abu Dhabi National Oil Company (ADNOC), under which the UAE will supply 30 million barrels of crude oil for India’s strategic oil reserves.
Additionally, a long-term supply agreement for LPG has been established between Indian Oil Corporation and ADNOC.
Both nations have also agreed to explore the establishment of strategic gas reserves in India to enhance future energy security.
The UAE has committed to a new investment of $5 billion in India. Currently, the annual trade between the two countries stands at approximately $85 billion.
These agreements come at a time of ongoing instability in the region. Reports of drone attacks in the UAE and Saudi Arabia on Sunday have once again highlighted the vulnerability of the Gulf region’s energy infrastructure.
Experts believe that the India-UAE partnership is a practical step towards shielding India from potential supply crises and price fluctuations in the global energy market.
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