UAE crude exports to India hit multi-year high

The UAE climbed to become India’s second-largest crude supplier in May, with shipments surging nearly 41% m-o-m to 942.5k bbl / d, surpassing pre-war levels and reaching a multi-year high, Reuters reports. India’s aggregate crude oil imports rose 15.4% m-o-m to 5.2 mn bpd in May, driven by higher purchases from the UAE, Russia, Venezuela and Angola as refiners sought to secure supplies amid disruptions in the Strait of Hormuz.

Saudi Arabia ranked third among suppliers, while India also resumed purchases of Iraqi crude after a month-long gap. Russia remained India’s largest crude supplier, with imports rising about 20% m-o-m to 1.9 mn bbl / d.

Led by a Fujairah workaround: Throughout the friction, the UAE's Fujairah export hub served as a vital buffer. Gulf producers have already requested that Indian buyers prepare to lift their full and committed annual contract volumes the moment normal transit resumes — in an effort to lock down their market share.

Why it matters: Indian refiners are all set to cut back spot market purchases from Latin America and Africa if the Hormuz reopens following the interim US-Iran agreement. A reopening could reverse recent diversification efforts and redirect Indian refiners back towards lower-cost Middle Eastern supplies, including potentially Iranian crude, if sanctions are lifted.

India imports less gas, pays more

Meanwhile, India paid an estimated USD 353 mn extra for liquefied natural gas (LNG) imports during March and April as the war prompted buyers to replace cheaper Qatari supplies with more expensive US and spot-market cargoes, Financial Express reports. The higher spending came despite LNG imports declining 23% from 4.4 mn tonnes in January-February to 3.4 mn tonnes in March-April.

Qatar’s decline reshuffles supply mix: Qatar's LNG supplies to India collapsed from 1.06 mn tonnes in January to virtually zero by April, while US imports surged to a record 910k tonnes in May, making America India's largest LNG supplier.

Why it matters: The US aggressively seized the vacuum, scaling its market share from 5% in January to 41% by May to become India’s primary LNG supplier. But this came at a steep premium: US-linked spot cargoes cost USD 2-3 / mmbtu more than traditional Qatari contract prices. Elevated prices continue to pressure fertilizer producers, gas distributors and power generators, igniting broader concerns over inflation and competitiveness.

ONGC to build the country’s newest oil reserve

State-run Oil and Natural Gas Corporation (ONGC) has been directed by the government to construct and fill India’s next strategic petroleum reserve (SPR) facility in Mangaluru along the eastern coast, at an estimated cost of INR 15 bn (USD 1.6 bn), Economic Times reports. The planned underground cavern will feature a storage capacity of 1.75 mn metric tonnes (mmt), expanding the country’s existing crude storage capacity by nearly one-third

India's limited emergency oil stockpiles were exposed during the war. India’s aggregate strategic storage capacity currently sits at 5.3 mmt (roughly 39 mn barrels), though actual physical stockpiles had dwindled to just 21 mn barrels by the end of 2025. This leaves India with a significantly thinner cushion compared to global peers — China held 1.4 bn barrels, the US had 413 mn and Japan held 263 mn barrels.

A larger strategic reserve would provide a buffer against future price spikes, shipping disruptions and geopolitical shocks while reducing reliance on spot-market purchases during crises.