As the United Arab Emirates announced its exit from the oil alliance OPEC, MK Surana, former CMD of Hindustan Petroleum Corp., said it could open up a major opportunity for India to strengthen crude oil ties with the Gulf nation, given its close proximity and the suitability of UAE crude for Indian refineries.
Speaking to NDTV Profit, Surana said, "UAE had an excellent relationship with India and it has only strengthened in recent times and due to geographical proximity, which definitely opens up an opportunity for India to tie up for crude."
He mentioned that UAE produces the type of crude which is required by Indian refineries.
Surana further explained that the UAE currently produces around 3.6 million barrels of crude oil per day and has the capacity to ramp up output to nearly 5 million barrels. It remains one of the few oil producers with significant spare capacity. The Gulf nation has often sparked debate within OPEC to increase production as it has made substantial investments, he added.
ALSO READ: UAE Quits OPEC: What It Means For Oil Prices Amid Hormuz Standoff
On Tuesday, April 28, the UAE announced its exit from both OPEC and OPEC+, marking a significant setback to the oil producers' bloc and its de facto leader, Saudi Arabia, at a time when the ongoing Iran war has triggered a historic energy shock and rattled the global economy, Reuters reported. The exit will come into effect from May 1.
The development came as Gulf producers continue to face challenges in exporting crude via the Strait of Hormuz, a critical passage through which roughly one-fifth of global oil and LNG supplies transit. Following UAE's exit OPEC's membership will be cut to 11 and, according to BBC, it will hit roughly 15% of its production capacity, marking one of the most significant structural shifts in the cartel in recent years.
ALSO READ: Beyond Barrels: UAE's OPEC Exit Lifts The Veil On Saudi-Emirati Rift
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