Saudi Arabia Plans Singapore Crude Oil Storage From Second Half of 2027

Saudi crude to be stored closer to Asian buyers

Saudi Arabia plans to begin storing crude oil at Singapore's Jurong Rock Caverns in the second half of 2027, placing supplies closer to Asian customers after the war involving the United States, Israel and Iran severely disrupted shipments through the Strait of Hormuz.

Singapore's Minister for Energy, Trade and Industry Tan See Leng announced the joint intention on October 26, 2026, at Singapore International Energy Week. Negotiations are targeted to finish within a few months, with Saudi Aramco expected to sign a memorandum of understanding with Singapore's Energy Market Authority and JTC Corporation.

The underground facility on Jurong Island can hold up to 1.47 million cubic metres of liquid hydrocarbons, roughly 9 million barrels. The amount of Saudi crude to be stored, the arrangement's financial value and Singapore's precise access rights have not been announced.

For Saudi Arabia, the proposed arrangement would put oil beyond a vulnerable Gulf shipping route before customers need it. For Singapore, a major refining and oil trading centre, locally stored crude would provide another buffer against interrupted deliveries.

Tan introduced the proposal during the opening day of the energy conference, describing it as a shared intention between the two countries:

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.

Why the location matters

Asia imported about two thirds of its oil from the Middle East before the war. Disruption to shipments through the Strait of Hormuz therefore affects a large share of the region's supply, leaving refiners and governments dependent on stored oil and alternative deliveries.

The conflict has already prompted countries to draw down inventories and has increased concern about stockpile levels. Oil held in Singapore would be closer to Southeast Asian customers when a disruption begins, reducing their immediate dependence on a fresh shipment arriving from the Gulf.

Saudi Energy Minister Prince Abdulaziz bin Salman Al-Saud explained the intended benefit in a recorded message to the conference:

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 plan changes where some Saudi oil would wait for buyers. Deliveries from storage could help cover a temporary interruption, while continued replenishment would depend on oil reaching Singapore. With the proposed start more than a year after the announcement, the arrangement offers no immediate relief from the current disruption.

What the underground caverns can hold

Jurong Rock Caverns sit 150 metres below ground on Jurong Island, Singapore's industrial energy hub. The facility stores liquid hydrocarbons, including crude oil and condensate, a light petroleum liquid that can be processed into fuels and other products.

The caverns' total capacity of roughly 9 million barrels gives a sense of the site's scale. The capacity assigned to Saudi Arabia will depend on the agreement now being negotiated.

Crude oil is the raw material that refineries turn into products such as petrol, diesel and aviation fuel. Holding crude near refining facilities gives buyers a supply of that raw material when incoming cargoes are delayed.

Singapore's role as both a refining centre and a trading hub makes the location useful to a producer serving several Asian markets. Oil already stored there could be sold and dispatched closer to customers, giving Aramco more options when shipping schedules are disrupted.

What Singapore would gain

Singapore expects the arrangement to support local energy needs if its crude supplies are interrupted. Its value would come from having physical oil nearby at a time when international deliveries are harder to secure.

Tan linked the proposal to both Saudi supply reliability in Southeast Asia and Singapore's ability to prepare for disruptions. The commercial purpose and the emergency purpose would operate together: Aramco would have stock near customers, while Singapore would gain a local buffer.

Tan also warned during his Singapore Energy Lecture at Marina Bay Sands that countries may prioritise domestic needs during a supply crunch. He identified resource nationalism, when governments put national control or domestic supply ahead of wider trade commitments, as a concern when it undermines contracts.

That warning helps explain the focus on preparedness. A supply agreement can arrange future deliveries, while oil already held locally provides a physical reserve that can be drawn upon under agreed terms.

Japan and South Korea offer existing models

Saudi Aramco already stores crude in Japan and South Korea under arrangements that give the host governments priority to buy the oil during an unexpected shortage. Those partnerships show how commercial storage can also support a country's emergency supply planning.

In Japan, storage capacity in Okinawa was expanded to 8.2 million barrels in September 2017 under an agreement with the Japan Oil, Gas and Metals National Corporation, known as JOGMEC.

In South Korea, Aramco agreed in 2023 to store 5.3 million barrels at Korea National Oil Corporation's reserve facilities in the port of Ulsan for five years.

Together, the stated capacities in Okinawa and Ulsan amount to 13.5 million barrels. Jurong Rock Caverns' total capacity of roughly 9 million barrels is about two thirds of that combined figure, although the Saudi allocation in Singapore is still to be settled.

The Japanese and South Korean arrangements provide a practical model for combining sales inventory with emergency access. Singapore's purchase rights and release procedures will be part of the terms that determine how its own arrangement works.

The dates that shape the proposal

The Singapore announcement extends a storage strategy that Aramco has already used elsewhere in Asia. The main dates show the gap between announcing an intention, completing negotiations and beginning operations:

• September 2017: Aramco's storage capacity in Okinawa was expanded to 8.2 million barrels.
• 2023: Aramco agreed to store 5.3 million barrels in Ulsan under an arrangement lasting five years.
• October 26, 2026: Singapore and Saudi Arabia announced their joint intention to establish storage at Jurong Rock Caverns.
• Within a few months of the announcement: Negotiations are targeted to conclude.
• Second half of 2027: Saudi crude storage in Singapore is expected to begin.

A memorandum of understanding records the parties' intention to work together. The planned negotiations would turn that intention into the operating arrangement for storing and accessing the crude.

Asia is looking for larger supply buffers

Japan is also discussing ways to increase crude reserves across Asia through the Partnership in Wide Energy and Resources Resilience Asia initiative, known as POWERR Asia. Prime Minister Sanae Takaichi proposed the initiative earlier in 2026, backed by $10 billion in financial support.

China, Japan and South Korea have built large oil stockpiles, while most other Asian countries have smaller buffers against supply shocks. The difference matters when many buyers seek replacement cargoes at the same time.

The Saudi proposal and Japan's regional initiative address related needs from different directions. Saudi Arabia wants supplies closer to its customers; countries buying oil want more protection when shipments stop or slow. Storage can connect those aims by placing inventory in markets where it may be needed.

For households and businesses, the stakes reach beyond crude trading. Refineries need oil to produce transport and industrial fuels, and interruptions can affect the availability and cost of those products. The Singapore proposal focuses on making physical supplies more accessible during such interruptions.

Singapore is preparing beyond oil storage

Tan presented the Saudi partnership alongside plans to expand Singapore's electricity infrastructure. Five new power plants are scheduled to come online between 2026 and 2031, increasing generation capacity by 26 per cent from around 12 gigawatts.

Singapore also plans seven new substations by 2031 and more underground power cables, including infrastructure supporting industrial demand in Changi, Pasir Ris and Paya Lebar. Substations adjust electricity voltage so power can move safely through the grid and reach users.

The oil storage plan addresses access to crude, while the plants and grid projects address electricity generation and delivery. Together, they show Singapore preparing for disruptions at several points in its energy system.

Tan, explaining why reliable and affordable energy remained a priority, connected supply security directly to everyday life:

Why do these crises matter? Because energy is an existential priority. Our economic growth and the quality of life depends on continued access to reliable and affordable energy.

Key Points

• Saudi Arabia plans to store crude at Singapore's Jurong Rock Caverns from the second half of 2027.
• The facility sits 150 metres underground and has total capacity of roughly 9 million barrels.
• Aramco is expected to sign a memorandum of understanding with the Energy Market Authority and JTC, with negotiations targeted to finish within months.
• The Saudi storage volume, financial terms and Singapore's precise access rights remain unannounced.
• Aramco already has storage arrangements in Japan and South Korea that give host governments priority purchase rights during shortages.
• The Singapore proposal would support future supply preparedness, with operations expected to begin in 2027.