Can PM Modi's visit to UAE, other four countries find a solution to the soaring oil prices problem?

Prime Minister Narendra Modi’s ongoing visit to the UAE, Netherlands, Sweden, Norway and Italy comes at a time when India is grappling with one of its biggest economic challenges in recent months — soaring crude oil prices.

Brent crude has remained above the $100-per-barrel mark after disruptions linked to the US-Iran conflict and uncertainty surrounding the Strait of Hormuz shook global energy markets. Since India imports nearly 90% of its crude oil requirements, rising energy prices are beginning to impact inflation, the rupee, fuel prices and broader market sentiment. The government has already increased petrol and diesel prices by ₹3 per litre amid mounting pressure on oil marketing companies, while the rupee continues to trade near record lows against the US dollar, making imports even more expensive.

Against this backdrop, Modi’s five-nation diplomatic tour is being viewed as more than a routine foreign visit. Analysts believe the trip reflects India’s attempt to secure long-term energy supplies, diversify crude sourcing, strengthen strategic reserves and build partnerships that could reduce the country’s future dependence on volatile oil markets. While experts do not expect the visit to directly lower international crude prices in the short term, they believe the diplomatic outreach could help India better manage future oil shocks and reduce supply-side risks over time.

“Prime Minister Narendra Modi's six-day visit to the UAE, Netherlands, Sweden, Norway, and Italy comes at a time when global oil markets are under severe stress. Since the Strait of Hormuz disruption earlier this year following the US-Iran conflict, oil prices have remained elevated, with Brent crude recently staying above $100 per barrel,” said Abhinav Tiwari, Research Analyst at Bonanza.

UAE visit seen as the most important energy stop

Among all the countries on Modi’s itinerary, analysts believe the UAE remains the most strategically important from an energy security perspective. The UAE possesses oil export infrastructure that bypasses the Strait of Hormuz, allowing crude shipments to continue even during periods of geopolitical disruption.

According Tiwari, India is expected to focus on securing additional long-term oil supplies, favourable trade terms and alternative payment arrangements during the visit. He added that India’s current strategy appears focused on managing the economic impact of high oil prices through diversification and energy security rather than directly influencing global crude prices.

“The UAE visit is the most important from an energy perspective. The UAE has pipelines that bypass Hormuz, allowing some crude exports to continue despite disruptions. India may try to secure additional long-term oil supplies, favorable trade terms, and alternative payment arrangements,” Tiwari added.

Analysts also highlighted Norway’s importance during the visit because it remains one of the world’s major non-Gulf oil producers. Increased imports of Norwegian crude could help India diversify away from excessive dependence on Middle Eastern supplies. Experts also believe Norway’s sovereign wealth fund investments in India could help support foreign investment flows and ease pressure on the rupee.

Meanwhile, the European leg of the tour involving Sweden, Netherlands and Italy is expected to focus more on long-term strategic cooperation in green hydrogen, clean energy, semiconductors, EV ecosystems and advanced manufacturing.

Focus shifts to long-term energy security

Market experts believe the larger significance of Modi’s tour lies in India’s attempt to structurally reduce future vulnerability to crude oil shocks rather than expecting immediate relief in petrol and diesel prices.

“Prime Minister Narendra Modi’s five-nation diplomatic tour is unlikely to directly reduce global crude oil prices, but it reflects a much deeper strategic effort to protect India from long-term energy shocks and imported inflation,” said Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth.

According to Hariprasad, the European partnerships indicate that India is gradually attempting to lower long-term dependence on crude oil through investments in green hydrogen, clean energy and manufacturing ecosystems. He also said stable bilateral energy agreements could help reduce supply-side uncertainty and protect India’s forex reserves at a time when crude oil prices and the rupee remain under pressure.

“The European leg of the tour — including visits to Norway, Sweden, and Netherlands — signals another long-term shift: reducing dependence on crude itself. Partnerships around green hydrogen, clean energy, EV ecosystems, and advanced manufacturing indicate India is trying to structurally lower future oil vulnerability,” said Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth.

Analysts, however, cautioned that the visit alone cannot immediately solve the global crude oil problem because prices are currently being driven by geopolitical tensions, shipping disruptions, insurance risks and uncertainty surrounding the Strait of Hormuz.

“Oil prices are not rising only because of demand. They are rising because of fear, supply disruption, insurance risk, shipping uncertainty and the Strait of Hormuz premium. Diplomacy can reduce risk premium, but physical supply disruption cannot be solved in one meeting,” said Ponmudi R, CEO, Enrich Money.

He added that: My view is clear: Modi’s visit can cool sentiment and reduce panic in crude markets if it produces firm supply commitments. But oil prices will fall meaningfully only when the geopolitical risk premium comes down. Until then, crude will remain volatile, and India must prepare for a higher-for-longer energy cost environment.

According to Ponmudi, India’s immediate focus will likely remain on ensuring energy security, protecting strategic reserves, diversifying supply chains and minimising the impact of rising crude prices on inflation, fiscal pressure and the rupee. He added that oil-sensitive sectors such as aviation, paints, logistics, chemicals and oil marketing companies may continue facing pressure if crude prices remain elevated for an extended period.

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