SINGAPORE: Saudi Arabia plans to store crude oil at Singapore’s Jurong Rock Caverns from the second half of 2027 to strengthen regional supply security and improve the resilience of energy supplies to Asian markets, energy ministers from both countries announced on Monday.
Thank you for reading this post, don't forget to subscribe!The move comes amid major disruptions to energy supplies following the US-Israeli war with Iran, which affected shipments through the Strait of Hormuz and prompted countries to draw down inventories, raising concerns over global oil stockpiles.
Before the conflict, Asia sourced around two-thirds of its oil imports from the Middle East, leaving the region particularly vulnerable to disruptions along key shipping routes.
Singapore’s Minister for Energy, Trade and Industry Tan See Leng announced the joint initiative at the Singapore International Energy Week conference, saying the arrangement would strengthen Saudi crude oil supply chains in Southeast Asia and enhance Singapore’s energy security.
Saudi Aramco is expected to sign a memorandum of understanding with Singapore’s Energy Market Authority and JTC Corporation, with negotiations aimed at concluding within the next few months.
Saudi Energy Minister Prince Abdulaziz bin Salman Al-Saud said bringing crude supplies closer to major Asian markets would improve the flexibility of supply networks and strengthen preparedness for potential disruptions.
Located approximately 150 metres underground on Jurong Island, the Jurong Rock Caverns have a storage capacity of 1.47 million cubic metres, equivalent to roughly nine million barrels of liquid hydrocarbons, including crude oil and condensate.
Saudi Aramco already maintains crude oil storage arrangements in Japan and South Korea, where local governments have priority access to the stored supplies in the event of unexpected shortages.
In Japan, the storage capacity at Okinawa was expanded to 8.2 million barrels in September 2017 under an agreement with Japan Oil, Gas and Metals National Corporation. In 2023, Aramco also signed a five-year agreement with the Korea National Oil Corporation to store 5.3 million barrels of crude oil at reserve facilities in the port of Ulsan.
Meanwhile, Japan is in discussions with other Asian countries to strengthen regional crude oil reserves under the Partnership in Wide Energy and Resources Resilience Asia initiative, proposed by Prime Minister Sanae Takaichi earlier this year and backed by $10 billion in financial support.
While China, Japan and South Korea maintain substantial oil stockpiles, many other Asian countries have more limited reserves, leaving them exposed to supply shocks. The proposed Saudi-Singapore arrangement is intended to strengthen regional preparedness by positioning crude supplies closer to major consuming markets.
By Reuters
