Friday 13 / November / 2026
India and the United Arab Emirates (UAE) are exploring an expanded strategic energy partnership through proposed crude oil storage arrangements in Fujairah and India, aimed at strengthening India's energy security amid growing concerns over disruptions to shipping through the Strait of Hormuz.
Under the proposed arrangement, India could store part of its strategic petroleum reserves in Fujairah, while Abu Dhabi National Oil Company (ADNOC) would be allowed to store up to 30 million barrels of crude oil in India.
The initiative marks a significant expansion of energy cooperation between the two countries, which began with crude oil trade and joint investments in oil production and storage infrastructure.
The partnership dates back to May 2018, when the tanker MT Inspiration delivered two million barrels of Abu Dhabi crude to an underground strategic storage facility in Mangalore on India's western coast. The shipment was the first under an agreement that allowed ADNOC to store 5.86 million barrels in India at its own expense, contributing to the country's emergency petroleum reserves.
Eight years later, the two countries are considering a reciprocal arrangement. In May 2026, India's Prime Minister's Office announced that New Delhi was exploring the possibility of storing a portion of its strategic oil reserves in Fujairah, where crude can be loaded onto tankers without navigating the Strait of Hormuz.
India strengthens investments in Abu Dhabi oilfields
India's dependence on imported crude oil has increased considerably over the past three decades. From importing less than one million barrels per day during the 1990s, the country's imports rose to approximately 4.4 million barrels per day by 2018, according to an analysis of Indian Petroleum Ministry data by the King Abdullah Petroleum Studies and Research Center.
The UAE had already emerged as an important energy supplier. During the 2011-12 financial year, India imported UAE oil worth $15.1 billion, representing 8.7 per cent of its total crude oil import expenditure, according to Indian trade figures compiled by the Institute for Defence Studies and Analyses.
As demand increased, Indian state-owned energy companies also sought direct participation in oil production in the Gulf.
In 2018, ONGC Videsh, Indian Oil Corporation and Bharat PetroResources jointly invested $600 million to acquire a 10 per cent stake in Abu Dhabi's Lower Zakum offshore oil concession. The Petroleum Ministry described the deal as India's first investment in Gulf oil production.
The investment was expected to provide the Indian consortium with an average of 1.75 million tonnes of crude oil annually over the 40-year concession period.
While the Mangalore arrangement enabled UAE crude to contribute to India's emergency reserves, the Lower Zakum investment secured Indian companies a share in future oil production.
By 2026, the UAE had become India's fourth-largest crude oil supplier and its second-largest source of liquefied natural gas (LNG) and liquefied petroleum gas (LPG), according to India's Ministry of External Affairs.
New storage opportunities in India and Fujairah
The proposed May 2026 arrangement could significantly expand ADNOC's storage presence in India, with opportunities extending beyond the existing Mangalore facility.
India's Prime Minister's Office identified Visakhapatnam in Andhra Pradesh as a potential location for ADNOC's participation in an existing strategic storage facility. Both countries are also considering the development of additional petroleum reserve infrastructure at Chandikhol in Odisha.
Under the proposal, ADNOC could store up to 30 million barrels of crude oil across Indian facilities.
In return, Fujairah could provide India with an alternative location to hold part of its strategic petroleum reserves outside the country, offering greater flexibility in accessing crude supplies during potential shipping disruptions.
The memorandum of understanding also provides for exploring cooperation in LNG and LPG storage infrastructure in India.
Fujairah is strategically important to Abu Dhabi because it offers an export route that bypasses the Strait of Hormuz. ADNOC operates a 406-kilometre pipeline transporting crude from its onshore oilfields to the port, allowing tankers to load supplies for international markets, including India.
The route has gained additional significance in 2026 amid regional conflict and concerns over the security of commercial shipping through the Strait of Hormuz. India's Finance Ministry highlighted these risks in its May economic report.
ADNOC is also developing another pipeline to strengthen crude exports through Fujairah. In May, the company announced that construction of its West-East Pipeline was under way, with operations expected to begin in 2027. The project is expected to double the company's crude export capacity through the port.
Cooperation expands to LNG and LPG supplies
Beyond crude oil storage, India and the UAE are seeking to strengthen cooperation in natural gas and cooking fuel supplies.
During the May 2026 visit, ADNOC and Indian Oil signed a separate agreement to explore long-term LPG supply opportunities. The discussions cover potential purchases and sales, including the possibility of a long-term supply contract for LPG, which is widely used by Indian households for cooking.
The two companies already have an established partnership in LNG supplies. In August 2025, ADNOC signed a 15-year agreement to supply Indian Oil with up to one million tonnes of LNG annually, primarily from its Ruwais project.
The proposed storage arrangements, combined with investments in oil production, pipeline infrastructure and long-term gas supply agreements, underline the growing strategic importance of India-UAE energy cooperation.
The partnership is expected to provide India with greater flexibility in sourcing and storing energy supplies while strengthening the UAE's position as a major energy partner in one of the world's largest oil and gas-consuming markets.
