Singapore, 26 October. Saudi Arabia will start storing crude oil in the Jurong Rock Caverns underground facility on Singapore's Jurong Island from the second half of 2027 to strengthen supply security in Asia, the energy ministers of the two countries announced at Singapore International Energy Week.
"Bringing supply closer to key Asian markets would strengthen the flexibility of our supply network," said Saudi Energy Minister Prince Abdulaziz bin Salman. Saudi Aramco is signing a memorandum on Monday with Singapore's Energy Market Authority and the state-owned JTC Corp, and the parties aim to conclude negotiations within a few months. The caverns lie 150 metres underground and can hold up to 1.47 million cubic metres, or about 9 million barrels of crude and condensate. How much oil Riyadh will store there and on what terms has not been disclosed.
The decision is linked to the war around Iran, which disrupted shipments through the Strait of Hormuz and forced Asian countries to draw down inventories. Before the war, Asia got two-thirds of its imported oil from the Middle East. Saudi Aramco already stores crude in Japan and South Korea, where the local governments have priority to buy it in the event of an unexpected shortage.
What it means: The largest oil exporter is moving part of its stocks closer to buyers and outside the dangerous Gulf. For Asia, this is an insurance reserve in case the strait closes again.
Who benefits: Singapore strengthens its role as an oil hub and its own energy security. Saudi Aramco gains the ability to supply Asian customers even if Hormuz is disrupted.
Background: Singapore is a major refining and oil trading centre, and the caverns will give it an additional strategic buffer. The UAE earlier built underground storage for 42 million barrels in the Fujairah mountains, outside the Strait of Hormuz.
We have also reported that Araghchi said shipping through Hormuz will not return to pre-war rules.
