UAE's Opec exit: From India’s point of view, this is very good development, analysts say

The UAE's decision on Tuesday to exit Opec and Opec+ is likely to have a beneficial impact on its ties with India, bringing the two countries closer, especially on the oil and gas front, analysts said.

Narendra Taneja, chairman, Independent Energy Policy Institute, told NDTV Profit on Tuesday evening that the UAE is looking for more autonomy and focus on supplying oil to countries like India, which is closer to it in bilateral ties. “The UAE and India have deep relations and this will only improve now,” he said.

The UAE’s move to quit the two bodies has been speculated for a while, as it will get more autonomy to decide on raising production and meeting the needs of its major clients. India, for its part, is heavily dependent on imported crude oil and the UAE has been one of its key energy partners in recent years. Until the outbreak of the Gulf war, much of India’s LPG imports came from the UAE visa the Strait of Hormuz.

Taneja noted: "If Opec and Opec+ weaken, countries including India, China, South Korea and Japan will stand to gain a lot. They will have more autonomy to build bridges, negotiate prices and improve oil and gas supplies significantly.”

"From India’s point of view, this is a very good development," he pointed out.

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Other analysts said the move also reflects the UAE’s long-term strategic and economic vision and changing energy profile, including higher investments in domestic energy production.

All the leading state-owned Indian refiners, including Indian Oil, Bharat Petroleum and Hindustan Petroleum, have been collaborating with Adnoc and other UAE-based companies on mega-refining projects. Adnoc had entered into a tie-up with these companies for exploration and appraisal.

India’s National Security Adviser Ajit Doval was in Abu Dhabi recently and held talks with top leaders.

UAE’s Minister of Industry and Advanced Technology, Sultan Ahmed Al Jaber, meanwhile, led a high-level delegation to Delhi earlier this year, when he declared that India is now “a decisive driver” of global energy demand. This is expected to jump significantly and would requite huge investments over the coming years.

Al Jaber also referred to the growing India-UAE relationship, especially in the oil and gas sector.

“As the world’s third-largest energy consumer, India has become a decisive driver of global demand," he added, noting: "Over the next 15 years, air travel in India will grow by 150 per cent. India’s cities will approach one billion people. And its data center capacity will increase ten-fold.

“Together, these megatrends are driving the largest expansion of energy demand in human history, faster, broader and more complex than anything we have seen before," Al Jaber noted.