The UAE committed $5B to India’s energy and AI sectors, deepening strategic ties around the IMEC Corridor and strengthening resilience against supply-chain risks linked to disruptions in the Strait of Hormuz.
This announcement follows an official visit by UAE President HH Mohamed bin Zayed Al Nahyan to India, alongside Indian Prime Minister Narendra Modi, where both premiers discussed cooperation under their comprehensive strategic partnership and trade agreement.
The strategic partnership includes agreements concerning petroleum reserves and liquefied petroleum gas (LPG) supplies, aimed at fortifying energy security against regional instability in Hormuz.
Supply-Side Shocks to India
India, a major oil importer, is keen to mitigate supply volatility exacerbated by the ongoing conflicts in the Middle East.
India’s crude inventories are down by 15%, prompting a shift towards alternative sources of oil, including potential new supplies from the US, West Africa, and South America.
Commodities data by analytics firm Kpler show crude imports into India falling by 15% since mid-February, affecting growth for domestic producers.
India is exploring initiatives to enhance its oil and gas storage capabilities, including increasing ADNOC’s storage capacity within India to approximately 30M barrels.
UAE Energy and AI Sovereignty
The UAE, having announced its formal departure from the OPEC, aims to increase its oil production capacity significantly.
UAE ambitions align with India’s demand for LPG from the GCC: a trend disrupted by the ongoing Iran war and partial blockade of the Strait of Hormuz.
ADNOC announced the construction of a secondary pipeline, connecting oil fields in the capital’s emirate to the port of Fujairah, in order to ramp up supply while bypassing Hormuz. The pipeline will is forecast to be built by FY27.
The establishment of an AI supercomputing cluster between Abu Dhabi-based G42 and the Indian government also demonstrates a broadening of technological collaboration between both states.
Stay Up to Date with the Latest Updates at Finance ME
EDGE’s Rodrigo Torres on Risk, Sovereignty and Defence Finance in a Multipolar World
