Saudi Arabia will hold crude oil in storage at Singapore’s Jurong Rock Caverns beginning in the latter half of 2027, the energy ministers of the two countries said on Monday. The arrangement is aimed at strengthening supply security across the region.
The plan comes after the US-Israeli war with Iran sharply disrupted energy shipments to Asia through the Strait of Hormuz. Countries have been forced to draw down their stockpiles, which has raised concerns about inventory levels worldwide. Before the war, Asia sourced about two-thirds of its oil from the Middle East.
Singapore minister outlines the storage arrangement
Singapore’s minister for energy, trade and industry, Tan See Leng, announced the joint intent at the Singapore International Energy Week conference. He said the arrangement “enhances the resilience of the Saudi crude oil supply chain in Southeast Asia” and would also help Singapore cope if supplies are interrupted.
Tan said Saudi Aramco will sign a memorandum of understanding with the Energy Market Authority and JTC Corp on Monday, and hopes to conclude negotiations within a few months. In a video recording played at the conference, Saudi Energy Minister Prince Abdulaziz bin Salman Al-Saud said that moving supply closer to key Asian markets would make the supply network more flexible.
Jurong caverns offer large underground capacity
The rock caverns on Jurong Island lie 150 metres (492 feet) below ground. They can hold up to 1.47 million cubic metres, or roughly 9 million barrels, of liquid hydrocarbons such as crude oil and condensate.
Saudi Aramco already stores crude in Japan and South Korea, where local governments have priority to buy supplies held in tanks if an unexpected shortage arises. According to Aramco Japan’s website, storage capacity in Okinawa was expanded to 8.2 million barrels in September 2017 under an agreement with Japan Oil, Gas and Metals National Corp (JOGMEC). In 2023, Aramco agreed with Korea National Oil Corp to keep 5.3 million barrels in South Korea’s reserve facilities at the port of Ulsan for five years.
Japan and other Asian nations expand oil reserves
Japan is in talks with other Asian countries to increase crude reserves across the region. The effort forms part of the Partnership in Wide Energy and Resources Resilience Asia (POWERR Asia) initiative, which Prime Minister Sanae Takaichi proposed earlier this year, backed by $10 billion in financial support.
China, Japan and South Korea have built large oil stockpiles, while most other Asian countries have a thinner buffer against sudden supply shocks.
