India, UAE may sign pacts on strategic petroleum reserves, LPG during PM visit

During a high-level bilateral visit to the UAE, India signed two significant energy security agreements with Abu Dhabi. The first agreement — signed between ...

What Happened

During a high-level bilateral visit to the UAE, India signed two significant energy security agreements with Abu Dhabi.
The first agreement — signed between Indian Oil Corporation Limited (IOCL) and Abu Dhabi National Oil Company (ADNOC) — guarantees expanded, long-term LPG supply volumes from the UAE to India.
The second agreement — between Indian Strategic Petroleum Reserves Limited (ISPRL) and ADNOC — expands the framework for underground crude oil storage at India's strategic petroleum reserve facilities.
The agreements come at a critical juncture with the Strait of Hormuz partially blocked amid the Iran-Israel conflict, sharply exposing India's energy import vulnerabilities.
The UAE is already India's largest single source of LPG, meeting approximately 40% of national demand; the new deal aims to formalise and scale up this supply.
The ISPRL-ADNOC SPR arrangement builds on a 2018 precedent in which the UAE became the first country to store crude oil at India's Mangaluru facility under a commercial-cum-strategic partnership model.

Static Topic Bridges

India's Strategic Petroleum Reserves (SPR) Programme

India's Strategic Petroleum Reserve programme is managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a wholly-owned subsidiary of the Oil Industry Development Board (OIDB), which functions under the Ministry of Petroleum and Natural Gas. The Phase I programme established underground storage at three locations in the form of rock caverns.

Phase I total capacity: 5.33 MMT (approximately 36.92 million barrels), sufficient for approximately 9.5 days of national consumption.
Three Phase I facilities: Visakhapatnam (Andhra Pradesh) — 1.33 MMT (9.33 million barrels); Mangaluru (Karnataka) — 1.5 MMT (10.515 million barrels); Padur, Udupi (Karnataka) — 2.5 MMT (17.525 million barrels).
Phase II expansion approved by the Union Cabinet: additional 6.5 MMT at Chandikhol (4 MMT, Odisha) and Padur (2.5 MMT, Karnataka).
In 2018, ADNOC became the first foreign entity to store crude oil at India's Padur/Mangaluru SPR under a cost-sharing and profit-sharing framework where ADNOC can sell stored crude on the open market but must first supply India during an emergency.

Connection to this news: The new ISPRL-ADNOC agreement deepens and potentially expands the existing 2018 model — strategically important because it ensures India has guaranteed access to Gulf crude stockpiles within its own territory during crises such as the current Hormuz disruption.

Abu Dhabi National Oil Company (ADNOC)

ADNOC is Abu Dhabi's state-owned oil company, one of the world's largest petroleum companies by reserves. It is wholly owned by the Abu Dhabi government and operates across the entire hydrocarbon value chain including exploration, production, refining, and distribution.

ADNOC's total proven reserves exceed 96 billion barrels of oil equivalent.
ADNOC supplies crude and petroleum products to over 100 countries; India is one of its largest customers.
ADNOC has a pipeline network including the Habshan-Fujairah crude oil pipeline (1.5 million b/d capacity), which bypasses the Strait of Hormuz, giving it partial supply continuity even if the strait is blocked.
ADNOC is a key partner for India's LPG security — the UAE accounted for approximately 40% of India's LPG imports in 2025-26.

Connection to this news: ADNOC's dual role as LPG supplier and SPR co-operator makes these agreements a vertically integrated energy security partnership — covering both the spot supply pipeline and emergency reserve architecture.

India's LPG Import Dependence and Energy Security

India is one of the world's largest consumers of LPG, primarily used as domestic cooking fuel (delivered as 14.2 kg cylinders under the Pradhan Mantri Ujjwala Yojana and regular distribution schemes). LPG demand has grown with rapid urbanisation and the Government's push to replace solid biomass cooking fuels.

India meets approximately 60% of its LPG demand through imports; domestic production covers only about 40%.
The Gulf states — particularly UAE, Saudi Arabia, and Kuwait — are the dominant LPG suppliers.
A sustained Hormuz blockade directly threatens LPG availability for hundreds of millions of households.
India's Oil Marketing Companies (IOCs) — IOCL, BPCL, HPCL — procure and distribute LPG through a subsidised public distribution network.

Connection to this news: The IOCL-ADNOC LPG supply agreement is a direct policy response to the supply shock created by the 2026 Hormuz crisis — formalising preferential supply terms to stabilise India's cooking gas availability.

Key Facts & Data

ISPRL Phase I capacity: 5.33 MMT (approx. 36.92 million barrels) across Visakhapatnam, Mangaluru, and Padur.
In 2018, ADNOC became the first foreign entity to store crude oil at India's Mangaluru SPR facility (5+ million barrels).
The UAE meets approximately 40% of India's total LPG import demand.
India imports over 60% of its LPG requirements; Gulf states are the primary source.
ADNOC's Habshan-Fujairah pipeline bypasses the Strait of Hormuz with a capacity of 1.5 million b/d.
ISPRL is a wholly-owned subsidiary of the Oil Industry Development Board (OIDB) under the Ministry of Petroleum and Natural Gas.
Phase II SPR expansion targets an additional 6.5 MMT at Chandikhol (Odisha) and Padur (Karnataka).
India's current SPR covers approximately 9.5 days of consumption — significantly below the IEA standard of 90 days (applicable to IEA members; India is an IEA Association Country, not a full member).