Saudi Arabia, UAE Seek Up to 10-Fold Crude Stockpile Expansion in South Korea and Japan

Saudi Arabia and the UAE are expanding their crude oil stockpiles in South Korea and Japan, aiming to diversify storage hubs away from the Middle East. The two Gulf producers have asked the Japanese government to increase their respective reserves by up to 10 times, currently around 8 million barrels each.

The move comes as uncertainty surrounding the Strait of Hormuz remains unresolved. Saudi Arabia and the UAE operate overland pipelines that bypass Hormuz, but export volumes through those routes are limited. Pre-positioning crude in East Asia would allow producers to supply customers even if maritime transport is disrupted.

Negotiations are ongoing regarding storage capacity and cost-sharing arrangements. Japan has already been serving as an overseas crude storage hub for Middle Eastern producers. The UAE began storing crude in Japan in 2009, followed by Saudi Aramco in 2010 and Kuwait in 2020.