![\"PM](\"https:\/\/static.toiimg.com\/thumb\/msid-131122302,imgsize-87474,width-400,height-225,resizemode-4\/india-uae-energy-agreements.jpg\" "\\"<p>What")
<\/div>\n<\/div>\n<\/div>\nWhat do the new agreements between UAE and India entail? How will India\u2019s energy security plans get a boost? (AI image)<\/p>\n
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India\u2019s energy security received a major boost on Friday when two important Memorandum of Understanding (MOUs) were signed during PM Narendra Modi\u2019s visit to the UAE on Friday. India imports close to 90% of its crude requirements, making the country vulnerable to geopolitical disruptions, shipping bottlenecks, sanctions, and price volatility. This vulnerability has been exposed during the ongoing US-Iran conflict, with the disruption of supplies via Strait of Hormuz dealing a blow.The two agreements pertain to building strategic petroleum reserves for India, and ensuring long-term LPG and LNG supply. \u201cThis UAE visit also saw the conclusion of key agreements across vital areas such as energy, defence, infrastructure, shipping and advanced technology, giving fresh impetus to the India-UAE Comprehensive Strategic Partnership,\u201d PM Modi said on social media.\u201cIn another important development, UAE announced investments worth $5 billion in India. This will further deepen economic ties,\u201d he said.UAE is one of India\u2019s top five crude oil suppliers and its geographical proximity to India makes supply available at a short notice. Hence having UAE store oil for India, and also help build oil reserves in India acts as a booster. UAE\u2019s recent move from OPEC and OPEC+ will also work to India\u2019s benefit since it allows the Middle East country to step up oil production, believe experts. <\/p>\n In fact, according to Kpler data recent crude trade flows show that India\u2019s imports from the UAE during late April and May have already recovered to levels broadly comparable to what it was importing prior to the conflict escalation. This highlights how closely both countries have coordinated despite the challenging market environment.What do the new agreements between UAE and India entail? How will India\u2019s energy security plans get a boost?<\/span><\/p>\n According to press release from the Prime Minister’s Office, the two energy security related agreements signed today will have the following scope:<\/span>MoU on Strategic Collaboration between Indian Strategic Petroleum Reserves Limited (ISPRL) and Abu Dhabi National Oil Company (ADNOC)<\/span><\/p>\n <\/p>\n Strategic Collaboration Agreement between Indian Oil Limited (IOCL) and ADNOC on supplies of LPG<\/span><\/p>\n <\/p>\n India has strategic petroleum reserves at Visakhapatnam, Mangaluru, and Padur. Capacity expansion is approved with reserves at Chandikol, and Padur. The MOU with the UAE aims to help enhance these reserves in India, while also storing oil in Fujairah for India. Storage of oil at Fujairah will also help reduce India\u2019s dependence on the Strait of Hormuz for transit of oil.<\/span><\/p>\n Experts have hailed the MOUs, calling them game-changing for India\u2019s energy security in the long-term. The importance of having strategic petroleum reserves has been brought to light with stark clarity due to the US-Iran war, exposing gaps in energy security of major economies. India, the world\u2019s sixth largest economy, has faced shock like never before in recent times.Gaurav Moda, Partner & Leader, Energy sector, EY-Parthenon India says, \u201cIndia and UAE have a long shared history and diaspora, increasingly closer in recent times. Given the global uncertainties, such bilateral engagement is timely and mutually beneficial to both countries in a major way. It may further pave the way for multiple new avenues in energy cooperation at G2G level as well as across energy majors from both countries.\u201dFirst, let\u2019s understand why strategic petroleum reserves are important – in times of geopolitical instability or any maritime freight disruptions that may be caused around key chokepoints such as the Strait of Hormuz (as is the case with the US-Iran conflict), it is a country\u2019s strategic reserves that act as an effective buffer against supply shocks. They can help stabilize the domestic supply and also reduce any panic buying that may ensue in the market.<\/span><\/p>\n![\"Importance](\"https:\/\/static.toiimg.com\/photo\/msid-131122268\/importance-of-hormuz-flows.jpg\" "\\"\\"")
<\/div>\n<\/div>\nEnergy Security MOUs with UAE: Top Facts<\/h2>\n<\/p>\n
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![\"LPG](\"https:\/\/static.toiimg.com\/photo\/msid-131122229\/lpg-agreement.jpg\" "\\"\\"")
<\/div>\n<\/div>\nHow the energy security agreements with UAE benefit India<\/h2>\n<\/p>\n
![\"Strategic](\"https:\/\/static.toiimg.com\/photo\/msid-131122179\/strategic-petroleum-reserves.jpg\" "\\"\\"")
<\/div>\n<\/div>\n![\"Estimated](\"https:\/\/static.toiimg.com\/photo\/msid-131122283\/estimated-crude-inventories.jpg\" "\\"\\"")
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