With oil prices spiralling amid the fallout from the US-Israel war on Iran and the Middle East’s diplomatic landscape shifting beneath everyone’s feet, Modi brought with him not just diplomatic pleasantries but a set of concrete energy agreements that promise to help insulate India from the worst of what is to come.
The visit carries additional weight given the UAE’s landmark decision last month to quit the Organisation of Petroleum Exporting Countries – a move widely read as the opening chapter of a new Gulf energy order.
Opec headquarters in Vienna, Austria. The UAE’s exit from the cartel’s quota system frees it to pump as much oil as it likes. Photo: Getty Images/TNS
As Opec’s sixth-largest producer, the UAE’s exit from the cartel’s quota system frees it to pump beyond its previous ceiling of 4.8 million barrels per day, giving it the flexibility to lock in preferential supply arrangements with favoured partners.
India – which imports about one-tenth of its oil from the Gulf nation and is the UAE’s largest liquefied natural gas customer, according to local media – sits near the top of that list.
The timing of Modi’s visit was probably “no coincidence”, said Srinivasan Balakrishnan, director of strategic engagements and partnerships at the New Delhi-based Indic Researchers Forum.
“Abu Dhabi’s move to ditch [Opec] quotas and ramp up production … gives it flexibility to supply more oil and LNG directly to key buyers like India.”
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Submission Statement: Indian Prime Minister Narendra Modi’s whirlwind visit to the United Arab Emirates before his four-nation tour that took him through the Netherlands, Sweden, Norway and Italy arrived at what analysts characterised as a moment of acute strategic opportunity. With global oil prices spiralling amid the fallout from the US-Israel war on Iran and the Middle East’s diplomatic landscape shifting beneath everyone’s feet, Modi brought with him not just diplomatic pleasantries but a set of concrete energy agreements that promise to help insulate India from the worst of what is to come, particularly interesting in the wake of UAE's exit from OPEC recently.
India and the European Union concluded a sweeping free trade agreement in late January – hailed by senior leaders on both sides as the “mother of all deals” – which, once it clears legal review and formal translation, is expected to create one of the world’s largest trading blocs. Modi sought to solidify trade and investment relationships in sectors as varied as semiconductors, defense, energy, critical minerals, green hydrogen and maritime cooperation.