India’s Energy Jackpot? MK Surana On UAE’s 5 Million Barrel Surge And The End Of OPEC Monopoly

追加: 2026-04-29

[00:00:00]MK Surana, former CMD of HPCL joining us to tell us the implications of this. Mr. Surana, we've been talking about this since morning and the fact that there is expected to be once this entire hormous trait issue gets resolved and hopefully does sooner rather than later. The production of oil from the UAE is expected to pick up. The question to you is from India's perspective is there likely to be a uh a a bigger advantage that some of some some of the other net importers would have purely from the perspective of the geographical placement of India visav UAE.

[00:00:39]>> Yeah, good morning Alex and uh uh thanks for inviting me to your show. There was quite a good background which was put by you just before this. uh in perspective of that I won't repeat that but uh currently UAE produces around 3.6 million barrels of crude and they have got a capacity to produce up to 5 million barrels in fact UAE is uh one of the few players who got a spare capacity and that has been a point of dispute between the OPEC countries to increase the production because UAE has invested a lot recently and they want to monetize it. Now UAE had an excellent relationship with India and it has uh only strengthened in recent times and due to geographical proximity definitely it opens up an opportunity for India to to tie up for uh the crude with UAE and uh the type of the crude which UAE produces the Murban the Das blends it suits well for the Indian refineries as well. Now in addition around one or 1.25 to 5 million barrel of crude coming into the world market and also the possibility of more countries within OPEC trying to buy for more share of production increasing the production it occurs well for the countries like importing countries like India because it will put a downward pressure on the oil prices of course the timing is such that uh right now because there is nothing coming out it may not be immediate effect on the prices but once the hormones get uh uh normalized there will be more crude in the market. A part of it will be offset by the desire of the countries to fill up their strategic reserves which they would have used recently. But over a period I think it should help in normalizing the the oil presence and it offers well for countries like India especially considering their diplomatic relationship also the balance of payment because lot of re uh lot of our people work in UAE and UAE is slowly uh trying to position itself as a as a economic uh economic hub. Also they are diversifying their economy away from oil. they've invested substantially in renewables and they're trying to position themselves along with other OECD countries. So I think it a hugs well for India.

[00:02:56]>> It it does and Mr. So Nana uh it was being described earlier today uh by another commentator and who was talking about the inelast inelasticity of demand and the fact that even a small increase in the supply can have an outsized impact on the pricing and so from that perspective if in 2027 you have 5 million barrels per day hypothetically that comes into play from up from 3.5 and they're not producing that 3.5 right now. What is the impact that you see happening with the price? I know that you're saying normalization and there was already a supply glut before the conflict started. So what in your opinion happens in 2027 assuming we don't have a conflict?

[00:03:43]>> See it will bring around 1 1.25 to 5 million barrels of oil additionally to the world market. And as I mentioned to you, there may be a reason for OPEC to consider increase in the production to make up for the losses which the OPEC countries would have made during these last two months and to balance their own budgets. So we should see some uh increased supply and also one of the reason is they're all full right now to the brim and they have to dispose of the inventory to continue with their production. So I think that once the hormones normalize there will be a sudden supply uh increase. We should try to bring down the prices which will get partially offset by the desire to fill up the strategic reserves. But 1 million barrel or 1.25 million barrel or let's say additional supplies does have an incremental impact because there is the oil uh oil prices work in a very tight balance of supply and demand. And if there is a there is a incremental supply coming which is over and above what the world is consuming generally it will create surplus inventory it absorbs the shock because of the news flows and it does have an impact on downward pressure but I I would assume that in a normalized condition the prices should hover around seven.

[00:04:55]>> Got it. Uh Mr. Surana uh one is of course UA's big move but two we had a geopolitical expert in the morning talking about how the decision making in the Middle East will now be fractured in multiple ways because of the alliances that each country will make as well.

[00:05:11]Does this have a meaningful uh impact on the OPEC OPEC or OPEC plus's ability to respond to either a crisis or a glut if you see OPC plus was controlling around 40 42% of oil supply to the world and only OPEC was around 28% let's say now UAE is having around 4% of the total supply now there will be a possib ility because some futures were already observed because of the disputes in the way the production cut should be taken.

[00:05:49]So while Saudi is on one spectrum while many other countries were on another spectrum and that was the reason to avoid cracks in in OPEC the there was a fast roll back of the voluntary production cut which OPEC has taken earlier. I definitely see there will be some impact on the way the OPEC operates. It was b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b basically very tight group with uh mostly dominated by Saudi.

[00:06:14]But the total geopolitics is also changing with the with the foreign policy in stance which is being taken by UAE versus Saudi in Yemen or let's say Sudan. Also UAE is trying to position themsel as a as economic hub away from purely oil. And uh uh and one more important thing is that that UAE economy is more uh more interpers with the the world economy because of the uh various investment UA Dubai etc. And therefore what affects world economy affects more to UAE compared to the other Gulf countries. While a higher oil prices will be in benefit to other Gulf countries, it will impact the world economy and it may not be that much positive for UAE. So there are different perspective on the economic and strategic future of the nation and uh the the foreign policy in stance which has taken that also uh has got an impact of like Saudi is getting into uh an econ an Islamic type of military arrangement with Pakistan while UAE having an arrangement with Israel on after Abraham accord. So and also UAE having the close relationship with US and also the currently during Iran war a grudge which UAE has that the Gulf countries have not done enough uh when they were being attacked. So all these and of course in Yemen when Saudi and uh UAE were on the elies once upon a time to to fight the Houthis but subsequently they found themselves supporting the rival groups.

[00:07:48]So all this is coming to to close but UAE possibility of UE exiting OPEC was known for quite some time when some time back UAE launched their own benchmark indices on group.

[00:08:01]>> Got it. Okay. Well Mr. Sana um great um talking to you as always sir. Thank you so much for taking the time out and being with us. Really appreciate your time.