India Energy Security Strategy: As tensions continue to rise across West Asia and threats loom over the strategically vital Strait of Hormuz, India has moved swiftly to secure its energy future through a series of major agreements with the UAE. The latest partnerships are being viewed as a crucial step in strengthening the country’s long-term energy resilience amid growing geopolitical uncertainty.
India currently imports nearly 85% of its crude oil requirements and around 60% of its LPG demand. A large portion of these supplies passes through the Strait of Hormuz — one of the world’s most sensitive energy shipping routes. In recent months, escalating regional instability has increased transportation risks and shipping costs, adding pressure on global fuel prices and energy markets.
Major Boost for LPG Supply Security
One of the key highlights of the new agreements is the long-term LPG supply deal between Indian Oil Corporation and Abu Dhabi National Oil Company. The UAE is already India’s largest cooking gas supplier, contributing nearly 40% of the country’s total LPG imports.
The expanded agreement is expected to provide Indian refiners with better long-term price visibility and improved supply stability. Experts believe the deal could help cushion domestic LPG prices if shipping disruptions intensify in West Asia.
Apart from LPG, India also maintains LNG contracts of up to 4.5 million metric tonnes per annum (MMTPA) with the UAE. These agreements play a major role in meeting over 50% of India’s imported natural gas demand, further reinforcing the country’s energy security framework.
Strategic Petroleum Reserves Get Stronger
India’s energy security push has also received a major boost through enhanced cooperation between Indian Strategic Petroleum Reserves Limited and ADNOC in underground crude oil storage infrastructure.
The latest initiative builds upon a 2018 partnership under which ADNOC stored more than 5 million barrels of crude oil at India’s Mangaluru strategic reserve facility. The new framework is expected to significantly strengthen India’s emergency crude storage capacity, helping the nation respond more effectively to geopolitical disruptions or shipping bottlenecks.
ADNOC is also rapidly expanding its production capabilities and aims to achieve output of 5 million barrels per day by 2027. Analysts believe this could offer India greater supply flexibility in the coming years. Additionally, the UAE’s recent exit from OPEC in May 2026 is expected to provide the country with greater autonomy in managing oil production and exports.
India’s Energy Vulnerability Still a Concern
Despite these strategic developments, India’s energy vulnerability remains a serious concern. The country still depends on imports for nearly 89% of its crude oil consumption, while domestic production continues to decline.
Another major challenge is India’s limited LPG storage capacity. Current LPG reserves can meet only around 22 days of demand — significantly lower than crude oil reserves, which cover nearly 74 days, and aviation turbine fuel (ATF) stocks, which last around 60 days. Experts warn that such limited buffer capacity could expose the country to sudden supply shocks during major geopolitical crises.
Pressure Mounts on Oil Marketing Companies
For companies like IOCL, which are central to these agreements, the operational environment remains difficult. The company’s stock has reportedly declined by nearly 11% so far this year.
Market analysts say rising global crude prices combined with restrictions on domestic retail fuel pricing are putting heavy financial pressure on public sector oil companies. Estimates suggest firms like IOCL are facing losses of nearly ₹20 per litre on petrol and close to ₹100 per litre on diesel under current pricing conditions.
Brokerage firm Emkay Global Financial Services has maintained an “Add” rating on the sector but reportedly reduced target prices by around 25%, citing higher crude oil prices and pressure from windfall taxes.
India Energy Security Strategy Gains Momentum
The latest India-UAE energy agreements underline New Delhi’s broader effort to reduce risks arising from global geopolitical instability. By securing long-term fuel supplies, expanding strategic reserves, and deepening ties with trusted energy partners, India is attempting to build a stronger shield against future energy disruptions.
However, experts believe that alongside international partnerships, India will also need to accelerate domestic energy production, diversify import routes, and expand storage infrastructure to ensure long-term energy security in an increasingly volatile world.
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