India, UAE move to expand strategic crude reserves; Abu Dhabi-linked oil storage may rise to 30 mln barrels

India and the UAE have agreed to significantly expand crude oil storage under their strategic petroleum reserve (SPR) partnership, with Abu Dhabi-linked stor...

What Happened

India and the UAE have agreed to significantly expand crude oil storage under their strategic petroleum reserve (SPR) partnership, with Abu Dhabi-linked storage set to rise from 5.8 million barrels to up to 30 million barrels.
The UAE's state energy company ADNOC (Abu Dhabi National Oil Company) already stores crude at India's Mangaluru SPR facility; the new agreement expands its footprint to include Visakhapatnam and the upcoming Chandikhol reserve in Odisha.
Both nations are also establishing a framework for strategic gas reserves, and long-term LPG supply arrangements between Indian Oil Corporation (IOC) and ADNOC are being finalised.
The agreement gives India access to a large emergency crude stockpile without the fiscal burden of purchasing and storing oil itself — a cost-effective energy security model.
Plans are underway to expand Phase-II SPR capacity, adding Chandikhol (4 MMT, Odisha) and an additional Padur facility (2.5 MMT, Karnataka) on a Public-Private Partnership (PPP) model.

Static Topic Bridges

Strategic Petroleum Reserves (SPR) — India's Programme

Strategic Petroleum Reserves are emergency crude oil stockpiles maintained by governments to cushion the economy against supply disruptions (wars, sanctions, pipeline failures, or OPEC production cuts). India's SPR programme is managed by Indian Strategic Petroleum Reserves Limited (ISPRL), incorporated on 16 June 2004 as a wholly owned subsidiary of the Oil Industry Development Board (OIDB) under the Ministry of Petroleum and Natural Gas.

Phase-I locations and capacity: Visakhapatnam — 1.33 MMT; Mangaluru — 1.5 MMT; Padur — 2.5 MMT. Total: 5.33 MMT.
Current fill level: approximately 64% of total Phase-I capacity (as of early 2026).
At 2019–20 consumption rates, the Phase-I reserves cover approximately 9.5 days of India's crude oil requirement.
India imports over 85% of its crude oil needs, making SPRs critical for energy security.
Phase-II expansion: Chandikhol (4 MMT, Odisha) and Padur extension (2.5 MMT, Karnataka) approved in July 2021 on PPP mode.

Connection to this news: The UAE agreement plugs a financing and volume gap in India's SPR strategy by letting ADNOC store its own crude at Indian facilities — India gains emergency access to this oil in a crisis, while ADNOC gains a strategically located storage hub near Asian refinery markets.

India-UAE Bilateral Relations

India and the UAE have one of the most multi-dimensional bilateral relationships in West Asia. The UAE is India's third-largest trading partner and second-largest export destination. The relationship was elevated to a Comprehensive Strategic Partnership in 2017. The two countries have a free trade agreement — the India-UAE Comprehensive Economic Partnership Agreement (CEPA), signed in February 2022 and one of India's first major FTAs in over a decade.

Bilateral trade: approximately USD 83 billion in FY 2022–23.
Indian diaspora in the UAE: approximately 3.5 million — the largest foreign community in the UAE and a major source of remittances.
The UAE is a key investor in India through vehicles like the Abu Dhabi Investment Authority (ADIA) and Mubadala.
Energy is a foundational pillar: the UAE supplies a significant share of India's crude imports and has been exploring joint refinery investments.

Connection to this news: The SPR expansion is a direct expression of the Comprehensive Strategic Partnership, moving the energy relationship from transactional trade to integrated energy security architecture.

Energy Security Concepts

Energy security is defined by the International Energy Agency (IEA) as the uninterrupted availability of energy sources at an affordable price. It has two dimensions: long-term energy security (investment in energy supplies aligned with economic development) and short-term energy security (ability of the energy system to react promptly to sudden changes in supply-demand balance). For oil-importing nations like India, SPRs are the primary instrument of short-term energy security.

The IEA requires its member countries to hold oil stocks equivalent to 90 days of net oil imports — a global benchmark.
India is not an IEA member but participates as an Association country and aligns its SPR policy with IEA norms directionally.
Strategic gas reserves are a newer concept; LNG terminal-based buffer stocks are the primary instrument globally.
India's dependence on West Asia and Russia for crude makes diversification of both source and storage a dual policy priority.

Connection to this news: The move to expand SPR capacity with a foreign-financed model is a creative solution to India's fiscal constraint in meeting IEA-equivalent reserve norms. The addition of strategic gas reserves reflects a forward-looking approach as India's gas consumption grows.

Key Facts & Data

ISPRL incorporated: 16 June 2004
Phase-I SPR total capacity: 5.33 MMT across three locations (Vizag, Mangaluru, Padur)
Current UAE storage at Mangaluru: ~5.8 million barrels; target: 30 million barrels
India's crude oil import dependence: over 85%
Phase-II new capacity: Chandikhol 4 MMT + Padur extension 2.5 MMT (PPP mode, approved July 2021)
India-UAE CEPA signed: February 2022
UAE bilateral trade with India: ~USD 83 billion (FY 2022–23)
IEA strategic reserve norm: 90 days of net imports
Phase-I reserves cover India's needs for approximately 9.5 days