How the UAE became one of India’s biggest oil suppliers
- India eyes oil storage in Fujairah after UAE crude helped fill emergency reserves in 2018
- The evolving partnership underscores how India-UAE energy relations are developing from a traditional buyer-supplier relationship into a broader strategic collaboration involving production, investment, storage and supply security.
India and the United Arab Emirates are moving to strengthen their strategic energy partnership, with proposed oil storage arrangements in Fujairah and India highlighting the growing importance of bilateral cooperation in securing energy supplies amid regional maritime disruptions.
The partnership, built on decades of crude oil trade, joint investments and long-term supply agreements, is expanding beyond crude to include liquefied natural gas (LNG) and liquefied petroleum gas (LPG).
The relationship dates back several decades, but a significant milestone came in May 2018, when the tanker MT Inspiration transported two million barrels of Abu Dhabi crude to an underground strategic oil reserve in Mangalore on India’s west coast.
It was the first shipment under an agreement allowing Abu Dhabi National Oil Company (ADNOC) to store 5.86 million barrels in India at its own cost, strengthening India’s emergency oil reserves.
Eight years later, the two countries are considering reversing the arrangement, with India exploring the possibility of storing part of its strategic petroleum reserves in Fujairah, on the UAE’s eastern coast.
Under an agreement announced in May 2026, India could hold crude oil reserves in Fujairah, while ADNOC would be allowed to store up to 30 million barrels of crude in India. The proposed arrangements reflect the growing strategic importance of energy security in bilateral relations.
India’s growing dependence on imported energy has been a major driver of this partnership. The country imported less than one million barrels of oil per day in the 1990s, but its imports had risen to approximately 4.4 million barrels per day by 2018.
The UAE had already emerged as an established supplier, with India purchasing $15.1 billion worth of UAE oil in the 2011–12 financial year, accounting for 8.7 percent of its total oil import bill.
The partnership also expanded into upstream oil investments. In 2018, three Indian companies — ONGC Videsh, Indian Oil Corporation and Bharat PetroResources — jointly invested $600 million to acquire a 10 percent stake in Abu Dhabi’s offshore Lower Zakum concession.
The investment marked India’s first participation in Gulf oil production. The consortium was expected to receive an average of 1.75 million tonnes of crude annually over the 40-year concession period.
The UAE has since become one of India’s most important energy suppliers. According to India’s Ministry of External Affairs, the UAE ranked as the country’s fourth-largest crude oil supplier and second-largest source of both LNG and LPG by 2026.
The May 2026 agreement could further strengthen this position by expanding ADNOC’s storage presence in India to include facilities in Visakhapatnam, Andhra Pradesh, and Chandikol, Odisha. The proposed 30 million barrels represents the potential total ADNOC crude storage capacity in India under the agreement.
Fujairah is particularly significant because it provides an alternative export route that bypasses the Strait of Hormuz, a critical maritime passage for global energy shipments. ADNOC’s existing 406-kilometre pipeline transports crude from its onshore oilfields to Fujairah, allowing tankers to load supplies without navigating the Strait.
The route gained additional importance in 2026 as the Gulf conflict disrupted shipping through Hormuz, highlighting the vulnerability of conventional energy supply routes.
ADNOC is also developing a second pipeline to Fujairah, known as the West–East Pipeline, which was announced in May 2026 and is expected to become operational in 2027.
The project is expected to double the company’s export capacity through the port, further strengthening the UAE’s ability to maintain crude supplies to international markets, including India, during maritime disruptions.
Cooperation is also extending to natural gas. In August 2025, ADNOC signed a 15-year agreement to supply Indian Oil with up to one million tons of LNG annually, mainly from its Ruwais project. ADNOC expects Indian Oil’s total purchases under its long-term agreements to reach 2.2 million tons annually from 2029, making the Indian company its largest LNG customer.
In January 2026, ADNOC Gas also signed a 10-year LNG supply agreement with Hindustan Petroleum Corporation valued at between $2.5 billion and $3 billion, with India expected to account for 20 percent of the company’s LNG volumes by 2029.
The May 2026 visit also resulted in an agreement between ADNOC and Indian Oil to explore long-term LPG supplies, including potential commercial arrangements for the fuel widely used in Indian households for cooking. The memorandum also provides for possible cooperation on LNG and LPG storage facilities in India.
While the proposed Fujairah strategic reserve arrangement is yet to be implemented, it could give India greater flexibility in managing emergency supplies and reducing exposure to disruptions in the Strait of Hormuz.
The evolving partnership underscores how India-UAE energy relations are developing from a traditional buyer-supplier relationship into a broader strategic collaboration involving production, investment, storage and supply security.
