SINGAPORE: Saudi Arabia plans to store crude oil at Singapore’s Jurong Rock Caverns beginning in the second half of 2027, the energy ministers of both countries announced Monday, in a move aimed at strengthening regional supply security.
The arrangement comes after the U.S.-Israeli war with Iran severely disrupted energy supplies shipped to Asia through the Strait of Hormuz, prompting countries to draw down inventories and raising concerns about global stockpile levels. Before the war, Asia imported two-thirds of its oil supplies from the Middle East.
“Saudi Arabia and Singapore are announcing our joint intent to establish an arrangement for Saudi crude oil to be stored at the Jurong Rock Caverns from the second half of 2027,” Tan See Leng, Singapore’s minister for energy, trade and industry, told the Singapore International Energy Week conference.
“This arrangement enhances the resilience of the Saudi crude oil supply chain in Southeast Asia, as well as contributes to Singapore’s energy security and resilience in the event of supply disruptions,” Tan said.
Tan said Saudi Aramco will sign a memorandum of understanding with Singapore’s Energy Market Authority and JTC Corp. on Monday, with negotiations expected to conclude within a few months.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman Al-Saud said in a video recording at the conference that bringing supply closer to key Asian markets “would strengthen the flexibility of our supply network and support Singapore’s security of supply and preparedness.”
The rock caverns at Jurong Island, located 150 meters (492 feet) below ground, can store up to 1.47 million cubic meters — roughly 9 million barrels — of liquid hydrocarbons such as crude oil and condensate.
Saudi Aramco currently stores crude in Japan and South Korea, where local governments have priority to buy the supplies in the event of an unexpected shortage.
The crude 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., or JOGMEC, according to Aramco Japan’s website. In 2023, Aramco signed a deal with Korea National Oil Corp. to store 5.3 million barrels of oil for five years in South Korea’s reserve facilities at the port of Ulsan.
Japan is also in talks with Asian countries to boost crude reserves across the region as part of the Partnership in Wide Energy and Resources Resilience Asia, or POWERR Asia, an initiative proposed earlier this year by Prime Minister Sanae Takaichi and backed by $10 billion in financial support.
While China, Japan and South Korea have built large oil stockpiles, most other Asian countries have less of a buffer in the event of supply shocks.
