Jurong facility can hold 9 million barrels, opening door to Saudi crude storage in Singapore
Key Facts
Saudi Arabia’s and Singapore’s energy ministries announced plans to establish an arrangement to store Saudi crude in Singapore, while Singapore’s Energy Market Authority and JTC exchanged a memorandum of understanding with Aramco during Singapore International Energy Week. The Saudi Press Agency said the exchange marks a first step toward implementing the proposed arrangement. Storage operations are expected to begin in the second half of 2027 in the Jurong Rock Caverns on Jurong Island. The arrangement aims to strengthen the flexibility of the Saudi crude supply chain in Southeast Asia and allow stored crude to support Singapore’s energy needs in the event of supply disruptions. The project thus combines the presence of Saudi crude near major Asian markets with a resource that can support Singapore’s energy security when needed.
The Jurong Rock Caverns have a maximum capacity of 1.47 million cubic meters of liquid hydrocarbons, or about 9 million barrels, according to JTC data. This capacity applies to the entire facility and does not mean Aramco has reserved the full amount or that a specific share of capacity has been allocated to it. The caverns are 150 meters underground, and JTC describes them as a secure facility for storing liquid hydrocarbons. Materials that can be stored include crude and condensates, according to the facility description. Underground storage also makes about 60 hectares of surface land available for other uses, JTC said.
The announcement comes as the risks of relying on maritime energy supply routes to Asia come into focus. Reuters reported that the war between the United States, Israel and Iran has severely disrupted energy supplies bound for Asia through the Strait of Hormuz, prompting countries to draw on their reserves. Before the war, Asia imported two-thirds of its oil supplies from the Middle East, according to Reuters. The International Energy Agency estimates that an average of 20 million barrels per day of crude and oil products passed through the Strait of Hormuz in 2025, or about 25% of global seaborne oil trade. This gives regional storage arrangements a role in preparing for transport and supply disruptions, in line with the stated aim of supporting Singapore when supplies are interrupted.
The move also reflects the Middle East’s importance as an energy source for Southeast Asia. The International Energy Agency said the region provides 60% of Southeast Asia’s crude imports, and that nearly half of the oil products refined or consumed there come from Middle Eastern crude. The agency estimated the region’s energy import bill at about $160 billion in 2026. Under current policies, the bill could rise to $400 billion, or 5% of the region’s economy, by mid-century. The agency’s executive director, Fatih Birol, said Southeast Asia is poised to account for 20% of global energy demand growth over the next decade, after India, highlighting the growth in the region’s needs alongside its reliance on imports.
The proposed arrangement would place Singapore within the Asian storage network that Aramco already uses. The company has arrangements to store crude in Japan and South Korea, with the local governments having priority to buy the stocks in the event of a sudden shortage, according to Reuters. In Okinawa, crude storage capacity rose to 8.2 million barrels in September 2017 under an agreement with Japan’s state-owned oil, gas and metals corporation. Aramco also signed an agreement in 2023 with the Korea National Oil Corporation to store 5.3 million barrels at reserve facilities in the port of Ulsan for five years. Available information does not specify the terms of storage in Singapore or the volume Aramco will store there.
Singapore Energy Minister Tan See Leng said the arrangement strengthens the flexibility of the Saudi crude supply chain in Southeast Asia and contributes to Singapore’s energy security when supplies are disrupted. Reuters quoted him as saying the arrangement “strengthens the flexibility of the Saudi crude supply chain in Southeast Asia and also contributes to energy security and resilience in Singapore when supplies are disrupted.” Saudi Energy Minister Prince Abdulaziz bin Salman said bringing supplies closer to major Asian markets “strengthens the supply network’s flexibility and supports security of supply and preparedness in Singapore.” Reuters reported that Tan said Aramco would sign the memorandum of understanding with the Energy Market Authority and JTC on Monday, and that he aimed to conclude negotiations within a few months. According to the Saudi Press Agency, the two countries’ energy ministries will advance the arrangement and coordinate its implementation with the relevant authorities, with storage expected to begin in the second half of 2027.
The announcement came as oil prices moved in opposite directions compared with the previous week’s performance and early trading on October 26. Brent crude futures fell 1.28% to $115.23 a barrel at 0744 GMT, according to Reuters via Investing.com. Brent had ended the previous week up 6%. Reuters reported that prices closed nearly $3 higher on Friday after Houthi attacks in Saudi Arabia raised concerns about energy supplies. These moves provide market context for the announcement, while storage is still expected to begin in the second half of 2027, according to the Saudi-Singapore statement.