Reserve System
India manages its strategic crude oil reserves through:
- Indian Strategic Petroleum Reserves Limited
The company works under the Ministry of Petroleum and Natural Gas.
The reserves help India maintain fuel supply during emergencies.
Importance of the Strait of Hormuz
The agreements are also linked to risks in the Gulf region.
What Is the Strait of Hormuz?
Strait of Hormuz is a narrow sea route connecting:
- Persian Gulf
- Gulf of Oman
- Arabian Sea
A large share of global oil trade passes through this route.
Any disruption in the region can affect international energy supply.
Other Agreements Signed During the Visit
India and the UAE signed additional agreements during the visit.
Strategic Defence Partnership
Both countries signed a Framework Agreement for a Strategic Defence Partnership.
Ship Repair Cluster in Gujarat
An MoU was signed for establishing a Ship Repair Cluster at:
UAE Investment in India
The UAE announced investments worth:
The investments will support:
- Infrastructure projects
- RBL Bank
- Samman Capital
India-UAE LNG Agreement
In January 2026, India and the UAE signed a:
- US$3 billion liquefied natural gas agreement
India became the UAE’s largest LNG customer under long-term supply contracts.
The total contracted supply is around:
- 4.5 million metric tonnes per annum
Why This Partnership Is Important
The partnership can help India:
- Improve energy security
- Ensure stable fuel supply
- Reduce risks from global oil disruptions
- Strengthen strategic reserves
- Expand long-term energy cooperation
The agreements also deepen India-UAE economic and strategic ties.
Important Exam-Focused Points
Month: Current Affairs - May 16, 2026
Category: International Relations | Economy