I had to bounce through Dubai en route to London and picked up a copy of The Gulf Today, from the 13th February and two stories piqued my interest.
The first was about crude oil, a topic we should all be interested in, if we enjoy driving and cars. The Abu Dhabi National Oil Company (Adnoc) has done a deal with India to store oil. This follows on the back of an economic plan agreed between the two countries after a state visit by the Prime Minister of India to the United Arab Emirates (UAE) and several senior officials from the UAE returning the favour.
The Indian Strategic Petroleum Reserve Limited company has created a 1.5 million tonne facility in Mangaluru, Karnataka state and the Emirates has agreed to fill half of the tanks with their oil – this is equal to 6 million barrels. Of the 0.75 million tonnes of oil to be poured in, the Emirates will give ¾ to India – that’s just over half a million tonnes of oil.
The plan is that Adnoc will use the facility to act as a warehouse for their oil that they trade in the region. The oil that India has access to, must be used in emergencies when oil flows slow to their home market. This will act as a buffer, protecting India’s users from the vagaries of the oil market.
This is good news for India and a strategic move for the UAE, protecting their reserves in different facilities within the region.