Saudi Arabia to store oil in Singapore to bolster Asia supply security

Saudi Arabia aims to enhance Asia supply security by storing crude oil at Singapore's Jurong Rock Caverns beginning late 2027, according to energy ministers from both nations. This decision follows the US-Israeli conflict with Iran, which disrupted oil shipments through the Strait of Hormuz and heightened global concerns over inventory levels.

Prior to the war, Asia relied on Middle Eastern oil for roughly two-thirds of its imports. The joint plan announced at Singapore International Energy Week aims to bolster Saudi crude oil supply security in Southeast Asia and bolster Singapore's energy resilience.

Saudi Aramco and Singapore's Energy Market Authority, along with JTC Corp, are expected to finalize a memorandum of understanding in the coming months. The rock caverns, situated 150 meters beneath ground level, possess a storage capacity of 1.47 million cubic meters, equivalent to approximately 9 million barrels of liquid hydrocarbons.

Presently, Saudi Aramco stores crude in Japan and South Korea, with Japan's government having priority access during potential shortages. Notably, Aramco also holds storage agreements in South Korea and Japan's Okinawa region.

In 2023, Saudi Aramco signed a five-year deal with Korea National Oil Corp to store 5.3 million barrels in Ulsan's reserve facilities. Meanwhile, Japan is exploring opportunities to expand crude reserves across Asia through the Partnership in Wide Energy and Resources Resilience Asia initiative, backed by $10 billion in funding. Despite China, Japan, and South Korea maintaining substantial oil inventories, numerous other Asian nations possess limited buffer capacities in times of supply disruptions.