Both countries are under pressure to implement their recently signed memorandum of understanding (MOU) to add storage capacity for 30 million barrels of crude oil and an unspecified amount of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) in India. The MOU was signed by the UAE’s President Sheikh Mohamed bin Zayed Al Nahyan and India’s Prime Minister Narendra Modi who visited the emirati capital of Abu Dhabi on May 15.

The two countries have suffered huge economic losses from the recent war between the U.S. and Israel against Iran which started on February 28. The U.S. and Iran had taken turns to blockade the narrow Strait of Hormuz which handles 20% of the world’s oil and gas shipping trade. The blockade is expected to be lifted after U.S. President Donald Trump and the Iranian government announced on June 14 that they had agreed to end the war.

India has been among the worst affected by the nearly four-month war. Nearly 40% of its six million barrels/day oil and 90% of its 33.2-million tonnes of LPG is shipped through the strait.

The UAE lost billions in revenue as it was unable to export its oil and gas during the blockade while its Ruwais refinery complex, Fujairah oil storage terminal and gas processing plants were badly damaged by Iran’s missile and drone attacks. According to the International Energy Agency (IEA), the UAE exported 2.02 million b/d of condensates and 1.22 million b/d of products in 2025.
The proposed joint storage project might help India and the UAE reduce their vulnerability to another blockade of the Strait of Hormuz in the future. The UAE would be able to store some of its oil outside the increasingly volatile Middle East while India will have access to emergency supplies at its doorsteps.

India’s official strategic petroleum reserves capacity currently stands at less than 40 million barrels or 5.33 million tonnes, barely enough to meet a week of its nearly six million barrels/day of consumption.

Increasingly, the burden of India’s oil stockpiling has fallen on private companies and state-owned refineries which are holding the equivalent of 68 days of consumption to give the country a total of 74 days cover.
Modi’s BJP-led government has come under growing criticism from businesses and opposition politicians for failing to improve the country’s energy security.
It has failed to launch any new projects after completing three terminals during the first phase of India’s stockpiling programme from 2005 to 2018. The government’s Indian Strategic Petroleum Reserves Limited (ISPRL) owns and operates the terminals at the ports of Visakhapatnam (1.33 million tonnes) on the southeastern state of Andhra Pradesh, and in Mangaluru (1.5 mt) and Padur (2.5 mt), both in Karnataka on the west coast.

At the height of India’s energy crisis in March, the government hit back at critics for circulating “misinformation” and insisted the country’s “petroleum and LPG supply situation is fully secure and under control.”

“India has 74 days of total reserve capacity and actual stock cover is around 60 days right now (including crude stocks, products stocks and the dedicated strategic storage in caverns),” said the Ministry of Petroleum and Natural Gas.

“India is completely secure for many months. Any representation that India’s reserves are depleted or insufficient should be dismissed with the disdain it deserves.”