Saudi Arabia plans to begin storing crude oil in Singapore's Jurong Rock Caverns from the second half of 2027, adding another strategic stock point closer to Asian customers after disruption around the Strait of Hormuz exposed the vulnerability of regional oil supply routes.
By Carolina Curiel
Published October 26, 2026
What Readers Should Know
MONTREAL (Oil Monster): Saudi Arabia is extending its crude oil supply network deeper into Asia with plans to store barrels in Singapore, giving Saudi Aramco another regional inventory position closer to major customers and outside its normal export terminals.
Saudi and Singaporean energy ministers announced the joint intention Monday during Singapore International Energy Week.
The planned arrangement would place Saudi crude at the Jurong Rock Caverns from the second half of 2027.
Singapore Minister for Energy, Trade and Industry Tan See Leng said Saudi Aramco would sign a memorandum of understanding with the Energy Market Authority and JTC Corporation, with negotiations expected to conclude within the coming months.
Singapore Storage Plan
Start: Second half of 2027
Location: Jurong Rock Caverns, Singapore
Facility depth: About 150 metres underground
Total cavern capacity: 1.47 million cubic metres, roughly 9.2 million barrels
Saudi allocation: Not yet disclosed
Parties: Saudi Aramco, EMA and JTC Corporation
Saudi Energy Minister Prince Abdulaziz bin Salman said positioning supply closer to major Asian markets would improve the flexibility of Saudi Arabia's crude distribution system and strengthen Singapore's preparedness during supply disruptions.
The strategy effectively places Saudi-owned crude inventory downstream of the kingdom's export system and closer to some of its largest customers.
That can provide additional flexibility when normal shipping routes become congested, expensive or temporarily unavailable.
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This is more than a storage agreement.
Saudi Arabia is creating another layer between production in the Gulf and consumption in Asia.
If crude is already stored in Singapore, Aramco does not need to move every replacement barrel from Saudi terminals after a disruption begins.
That turns overseas inventory into a form of logistical insurance: the oil is positioned closer to the customer before the next shipping emergency occurs.
The announcement follows months of severe disruption to oil flows through the Strait of Hormuz.
Before the conflict, Asia sourced roughly two-thirds of its crude oil from the Middle East, according to Reuters.
That dependence left Asian refiners particularly exposed when shipping through the Gulf became constrained.
The disruption forced producers and buyers to rely more heavily on alternative pipelines, emergency stocks, ship-to-ship transfers and inventory held closer to consuming markets.
The proposed Singapore arrangement adds another tool to that supply-security system.
Singapore's Jurong Rock Caverns are located approximately 150 metres beneath Jurong Island.
JTC describes the facility as Southeast Asia's first commercial underground rock-cavern storage system for liquid hydrocarbons.
The complex contains five caverns with nine storage galleries and total capacity of approximately 1.47 million cubic metres.
That is equivalent to roughly 9.2 million barrels of liquid hydrocarbons such as crude oil and condensate.
The total facility capacity should not be confused with the amount that will be allocated to Saudi Aramco. The volume covered by the proposed Saudi-Singapore agreement has not yet been announced.
Why Underground Storage Matters in Singapore
The arrangement also fits Singapore's effort to strengthen energy resilience.
Singapore has little domestic energy production and depends heavily on imported fuels.
The country is a major refining, bunkering and petroleum-trading hub, meaning reliable access to crude and refined products is important both domestically and regionally.
Tan said the Saudi arrangement would strengthen the resilience of the kingdom's supply chain in Southeast Asia while contributing to Singapore's preparedness during shortages.
Singapore would not be Saudi Aramco's first overseas crude-storage arrangement in Asia.
Aramco has maintained a strategic storage agreement in Okinawa, Japan, since 2010.
Japan's energy agency JOGMEC leases 13 national crude-storage tanks to Aramco with total capacity of about 1.3 million kilolitres, equivalent to approximately 8.2 million barrels.
The arrangement allows Aramco to use Okinawa as a supply hub for Asian customers.
In exchange, Japan receives preferential access to the stored crude during an emergency.
Saudi Crude Stored Closer to Asian Markets
Japan: About 8.2 million barrels of storage capacity in Okinawa
South Korea: 5.3 million barrels under a joint-stockpiling agreement
Singapore: Planned from H2 2027; Saudi volume not yet disclosed
Strategic objective: Position crude closer to major Asian consuming markets
Saudi Aramco expanded the strategy in 2023 through a joint oil-storage agreement with Korea National Oil Corporation.
That arrangement covers approximately 5.3 million barrels of Saudi crude stored in national reserve facilities at Ulsan.
South Korea can receive priority access to the barrels during a supply emergency.
KNOC says its wider international joint-stockpiling program with Middle Eastern producers has become an important part of South Korea's response to oil-market and supply-chain instability.
The Singapore plan fits into a much broader Saudi strategy to reduce vulnerability to regional shipping disruptions.
Inside Saudi Arabia, the kingdom is investing in additional pipeline capacity that can redirect crude from eastern production areas toward Red Sea export terminals.
Outside Saudi Arabia, overseas storage places crude closer to major consuming markets before it is needed.
The two approaches address different parts of the same supply-security problem.
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Saudi Arabia is building redundancy at both ends of the barrel.
Pipeline investment helps crude leave the kingdom when one maritime route is disrupted.
Overseas storage helps ensure barrels are already available near customers if Gulf exports slow again.
Together, the two strategies reduce reliance on a single route between Saudi oil fields and Asian refineries.
Saudi Arabia has said it wants the ability to redirect as much as 10 million barrels per day of crude through expanded pipeline infrastructure over the next several years.
Energy Minister Prince Abdulaziz said the kingdom could add up to 1.2 million bpd relatively quickly by temporarily converting a domestic natural gas pipeline to crude service.
Further upgrades to pumping stations and the East-West network could add additional routing capacity.
The objective is not to move 10 million bpd through pipelines every day, but to give Saudi Arabia greater ability to reroute exports when normal maritime corridors are threatened.
The value of alternative infrastructure became clear during the current Middle East disruption.
Saudi Arabia restarted its East-West Pipeline after attacks damaged parts of the system, allowing crude flows toward the Red Sea port of Yanbu to resume.
The route allows Saudi crude to bypass the Strait of Hormuz entirely.
It therefore acts as the domestic counterpart to overseas stockpiling: one protects the route out of the kingdom, while the other protects availability nearer the destination market.
Asia remains the most important destination for Middle Eastern crude exports.
Before the current conflict, the region imported roughly two-thirds of its oil supplies from the Middle East, according to Reuters.
Japan provides an extreme example of that exposure. JOGMEC data show approximately 95% of Japan's crude imports came from the Middle East in 2024.
That dependency explains why Asian governments increasingly value arrangements that place producer-owned crude inside their own or neighboring markets.
The stored barrels remain commercially useful to Aramco while simultaneously providing a potential emergency buffer for the host country.
The planned arrangement has commercial value beyond emergency preparedness.
Singapore sits at the center of one of the world's largest oil-refining, marine-fuel and commodities-trading markets.
Holding crude there could allow Aramco to respond more quickly to regional customer demand, optimize cargo timing and reduce the distance between inventory and buyers.
It could also allow stored barrels to be redirected among Southeast and East Asian customers without waiting for a new cargo to arrive from Saudi Arabia.
The exact commercial structure of the arrangement remains under negotiation.
The size of Saudi Arabia's eventual storage allocation in Singapore has not yet been disclosed.
That will determine how strategically significant the arrangement is compared with Aramco's existing positions in Japan and South Korea.
Jurong Rock Caverns as a whole can hold roughly 9 million barrels, but some of that capacity is already used commercially.
The memorandum of understanding is therefore the beginning of the negotiation rather than the final storage contract.
What Happens Next
The Bottom Line
The Hormuz crisis has changed how producers and buyers think about oil security.
It is no longer enough to know that crude exists at the producing field or export terminal.
The more important question is how quickly that oil can reach the refinery when the normal route fails.
Saudi Arabia's planned Singapore storage arrangement puts physical crude closer to one of the world's largest consuming regions before the next disruption occurs.
In that sense, overseas storage is becoming part of the supply route itself, not simply somewhere oil waits between trades.
Continue Reading
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Saudi Arabia Targets 10M Bpd Pipeline Oil Export Capacity
Saudi Arabia Restarts East-West Oil Pipeline
Courtesy: www.reuters.com
