The energy agreement inked between India and the UAE last week may appear to be a straightforward strategic petroleum arrangement. But it's much more than that. Now, the UAE can store, finance and retain ownership of up to 30 mn barrels of crude oil in India's strategic reserves. Beyond the existing facility in Mangaluru, the two sides will explore new storage capacity in Visakhapatnam and Chandikol in Odisha.
In return, India secures priority access during emergencies, such as the current one. The agreement also explores potential crude oil storage in Fujairah, which bypasses the Strait of Hormuz, with potential LNG and LPG storage opportunities in India. In the process, the UAE has committed to being a reliable long-term LPG supplier to India.
