Saudi Arabia has secured a deal with Singapore to store crude oil in underground caverns, according to a report by Bloomberg. The agreement comes in the wake of recent Houthi attacks on Saudi oil facilities over the weekend. The Saudi crude will be stored in the Jurong Rock Caverns, part of a petrochemical complex in southern Singapore, with deliveries expected to begin in the second half of next year. The caverns can hold 1.47 million cubic meters of crude oil, condensates, and other liquids, equivalent to 9 million barrels.
Saudi Aramco is actively seeking additional storage capacity abroad as the war in the Persian Gulf disrupts exports. The conflict, now spanning the Red Sea, has led to targeted attacks on vessels and infrastructure by the Yemeni Houthis. In response, Aramco has resorted to ship-to-ship transfers in the Gulf of Oman and rerouting tankers via the Suez Canal.
Singapore’s energy minister, Tan See Leng, highlighted that the arrangement enhances the resilience of the Saudi crude oil supply chain in Southeast Asia and contributes to Singapore’s energy security. Saudi energy minister Prince Abdulaziz bin Salman noted that bringing supply closer to key Asian markets strengthens the flexibility of their supply network and supports Singapore’s security of supply.
The deal underscores the importance of Asia as a key market for Aramco and other Middle Eastern producers, particularly amid the supply crisis resulting from the war between the U.S., Israel, and Iran.