India’s petroleum secretary says the UAE is now supplying 15 to 20 per cent of India’s energy imports.
When a country imports the bulk of its oil, partner selection becomes a serious matter. That’s precisely what’s happened this week with India. Neeraj Mittal, Secretary of India’s Ministry of Petroleum and Natural Gas, has put the UAE firmly on the list of India’s major suppliers. The UAE-India energy relationship story is all about the numbers and the UAE has become a major supplier.
The Numbers in Plain Terms
Mittal says the UAE is responsible for around 15-20% of India’s total energy imports. By fuel type that’s 25% of India’s LPG, 10% of its LNG and 15% of its crude oil. He describes the UAE as being a “great partner” in that it supplies all three of those in a reliable way.
The UAE India energy relationship figures I’ve quoted come from an Indian official so they are India’s own numbers.
Why India Is Spreading Its Bets
India has broadened its crude imports to around 43 countries as supplies via the Strait of Hormuz have been cut off. Russia is still India’s largest supplier of oil and India has also started to buy from other countries, including Venezuela.
Mittal said the long-term diversification “has paid well” in the current crisis. In his words the increase in price for India over the pre-crisis period was around 7% (possibly the lowest of any country). The UAE relationship in the energy space is just one element of a wider diversification strategy.
Storage and Reserves
Beyond the purchase of oil the two countries are also in discussion around storage. During PM Modi’s visit to the UAE in May ADNOC signed an agreement with India’s Strategic Petroleum Reserves to increase India’s crude storage capacity to 30 million barrels.
There is also a potential storage opportunity in Fujairah. For the UAE-India energy relationship reserves are important as they provide India with a buffer when markets are in a nervous state.
What India Says About Supply and Prices
Mittal says India has had absolutely no shortages or rationing and that indeed demand is still on the rise (unlike in many other countries where demand has actually declined). LPG from the US is now 67% of India’s LPG imports (up from 10% at the start of the year).
He makes a very interesting point in that “I’m actually more worried about the volatility than the absolute levels of crude”. The UAE India energy relationship is very useful in that respect as it provides you with a reliable partner to work with and thus makes the volatility far easier to deal with.
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Looking Beyond Imports
India is extremely reliant on imported crude. An EY report from June (cited in the article) states that that figure was over 90% in FY26 as against 55% in FY1999. To offset that, India has launched a $9bn ultra-deep and deep water oil exploration programme in July and a $2.5bn programme to turn waste into biogas.
Mittal said the aim is to achieve a “healthy balance” between imports and self-sufficiency. The UAE India energy relationship is in addition to that, not in place of it.
The Bottom Line
Energy relationships are all about trust and Mittal’s message is that trust is growing. Whether the UAE-India energy relationship continues to deepen will ultimately be down to markets, politics and shipping routes.
For the moment though, an Indian official describing the UAE as “deeply connected” in terms of energy is a very strong signal.
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