How India-UAE oil and LPG MoUs could strengthen New Delhi’s energy security

Petroleum reserves, long-term LPG contracts and resilient crude flows point to a shift in India’s strategy to ensure energy security, analysts say.

For a country that imports roughly 90 percent of its crude oil requirements | Photo: File/Reuters

New Delhi: India and the United Arab Emirates (UAE) signed a set of energy memoranda of understanding last week during Prime Minister Narendra Modi’s visit to Abu Dhabi, covering strategic petroleum reserves (SPR), long-term LPG supply arrangements and broader hydrocarbon cooperation. Analysts say the agreements are less about immediate trade volumes than about building structural resilience into India’s energy architecture at a moment of sustained global uncertainty.

The timing of these MoUs carries weight. Global energy markets have been disrupted by the US-Israel war with Iran and the UAE is itself in the process of exiting the Organisation of Petroleum Exporting Countries (OPEC), recalibrating its role as an independent supplier as it does so.

“The MoUs signed during Prime Minister Modi’s visit to the UAE represent an important step in strengthening the long-term energy partnership between India and the UAE, particularly at a time when global energy markets remain highly sensitive to geopolitical disruptions, freight risks, and supply security concerns,” Sumit Ritolia, manager (oil markets and modelling refinery) at trade analysis firm Kpler, told ThePrint Monday.

An MoU signals the intent of reaching an agreement. How and when a deal is signed and implemented can vary.

SPR cooperation critical

For a country that imports roughly 90 percent of its crude oil requirements, India’s exposure to any supply shock is vast. The SPR component of the MoUs addresses this most directly.

An SPR is the emergency stock pile of crude oil stored by a country.

As part of the MoU, the two countries are exploring possible storage of 30 million barrels of oil by ADNOC (Abu Dhabi National Oil Company) at India’s SPR facilities The agreement also includes storage for LPG and LNG.

“Enhanced cooperation with the UAE on SPRs could help India strengthen its emergency crude storage capabilities, improve access to strategic barrels during supply disruptions, and provide greater flexibility in crude procurement and inventory management,” Ritolia said.

Presently, India has capacity to hold 5.33 million metric tonnes (MMT) of reserves at three storage facilities in the country.

Ritolia added that during periods of instability around key chokepoints such as the Strait of Hormuz, strategic reserves act as a stabilising buffer that can prevent panic buying and help maintain steady domestic supply. Closer coordination with ADNOC could support commercial storage arrangements, more efficient crude stocking strategies and faster access to West Asian oil during emergencies.

LPG stability

India imports nearly 60 percent of its LPG requirement, with most of it (as estimated 90 percent) historically sourced from Gulf producers before the US-Iran conflict reshuffled regional supply chains. With urbanisation and government clean-cooking programmes continuing to drive demand, long-term supply contracts carry direct implications for household energy pricing.

The MoUs include exploring opportunities for the sale and purchase of LPG, including a long-term supply arrangement between ADNOC Gas Limited and Indian Oil Corporation Limited (IOCL).

“Securing long-term LPG supply arrangements with the UAE can help India reduce reliance on volatile spot cargo markets, improve supply visibility, and enhance affordability and availability for domestic consumers,” Ritolia said. Stable contracts also help manage seasonal demand spikes and reduce exposure to sharp swings in international LPG benchmarks.

Trade flows already resilient

India’s crude imports from the UAE have held up despite the US-Israel war with Iran effectively choking transit through the Strait of Hormuz since late February.

Kpler data shows that flows rose to 612,000 barrels per day in April 2026, up from 554,000 bpd in February—a recovery that signals continued operational coordination between the two sides. (Much of this is because supply has been routed through a pipeline that skips the Strait of Hormuz, and facilitates transit through the Gulf of Oman)

“At a time when energy security has become increasingly intertwined with geopolitics, logistics, and trade flows, these MoUs could provide India with greater supply stability, strategic flexibility, and stronger coordination with one of its key West Asian energy partners,” Ritolia said.

The deals reflect interests that are distinct but aligned. For India, the direction is towards structured contracts and strategic buffers against the vulnerability that near-total import dependence creates. For the UAE, it is about strengthening its role as a flexible and central energy supplier as the global oil landscape continues to shift.