Saudi Arabia will store crude oil in Singapore’s underground Jurong Rock Caverns from the second half of 2027, under a joint arrangement announced on Monday by energy ministers from both countries. The plan, unveiled at the Singapore International Energy Week conference, is designed to put Saudi barrels closer to Asian buyers and to harden the region’s fuel supply against future shocks.
Singapore’s Minister for Energy, Trade and Industry, Tan See Leng, announced the joint intent at the conference, saying Saudi Aramco would sign a memorandum of understanding with Singapore’s Energy Market Authority and JTC Corporation. Negotiations on the arrangement are expected to conclude within a few months.
“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,” Tan said. “This arrangement enhances the resilience of the Saudi crude oil supply chain in Southeast Asia, as well as contributes to Singapore’s energy security and resilience in the event of supply disruptions.”
Key Takeaways
- Saudi crude oil will be stored at Singapore’s Jurong Rock Caverns from the second half of 2027 under a joint Saudi-Singapore arrangement.
- The deal follows war-linked disruptions to Asian energy supplies shipped through the Strait of Hormuz, which forced countries to draw down inventories.
- Saudi Aramco will sign a memorandum of understanding with Singapore’s Energy Market Authority and JTC Corporation, with negotiations to conclude in a few months.
What Was Announced
Under the arrangement, Saudi crude will be held in the Jurong Rock Caverns, an underground storage facility on Jurong Island, from the second half of 2027. Saudi Aramco is due to sign the memorandum of understanding with the Energy Market Authority and JTC Corporation, the government agency that develops industrial infrastructure in Singapore.
Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman Al-Saud, addressed the conference in a video recording, saying the move would bring supply closer to the markets that need it most. “Bringing supply closer to key Asian markets would strengthen the flexibility of our supply network and support Singapore’s security of supply and preparedness,” he said.
Why Singapore, Why Now
The announcement comes after the US-Israeli war with Iran severely disrupted energy supplies to Asia shipped through the Strait of Hormuz, the narrow waterway through which a large share of the world’s seaborne oil passes. The disruption prompted countries across Asia to draw down inventories and raised concerns about stockpile levels around the world. Before the war, Asia imported two-thirds of its oil supplies from the Middle East.
The energy shock has kept markets on edge for months, with supply fears pushing oil prices higher as attacks and conflict threatened shipments. Saudi Arabia has also been working to defend its own territory, with Saudi defences intercepting Houthi missiles and drones, even as reports describe an Iran-brokered ceasefire proposal aimed at halting the attacks.
This arrangement enhances the resilience of the Saudi crude oil supply chain in Southeast Asia, as well as contributes to Singapore’s energy security and resilience in the event of supply disruptions.
- Storage begins: second half of 2027
- Location: Jurong Rock Caverns, about 150 metres below ground on Jurong Island
- Capacity: 1.47 million cubic metres, roughly nine million barrels of liquid hydrocarbons
- Partners: Saudi Aramco, Singapore’s Energy Market Authority and JTC Corporation
- Precedent: Saudi Aramco already stores crude in Japan and South Korea
Inside the Jurong Rock Caverns
The Jurong Rock Caverns sit about 150 metres below the ground on Jurong Island, Singapore’s petrochemical hub. The facility can store up to 1.47 million cubic metres of liquid hydrocarbons such as crude oil and condensate, equivalent to roughly nine million barrels. Storing oil underground in rock caverns shields it from weather and surface disruption, and placing Saudi barrels in Singapore puts them within short sailing distance of the refineries and import terminals of Southeast Asia.
For Singapore, the arrangement adds a physical buffer to its energy security. The city-state imports almost all of the fuel it uses, and the government has presented the deal as part of its preparedness for any repeat of the kind of supply shock seen during the war-linked Hormuz disruption.
A Model Already Tested in Japan and South Korea
Saudi Aramco already maintains crude oil storage arrangements in Japan and South Korea, where local governments have priority to buy the supplies held in the tanks in the event of an unexpected shortage. In Japan, Aramco Japan expanded storage capacity in Okinawa to 8.2 million barrels in September 2017 under an agreement with the Japan Oil, Gas and Metals National Corporation. The Singapore arrangement follows the same logic: host-country priority in a crisis, in exchange for a secure storage location close to demand.
The difference this time is the timing. Rather than building a new facility, the plan uses existing caverns, and the storage is explicitly framed as a response to a war that exposed how quickly Asian supplies can be squeezed when a single chokepoint comes under strain.
What to Watch Next
The next step is the memorandum of understanding between Saudi Aramco, the Energy Market Authority and JTC Corporation, with negotiations aimed at concluding within a few months. After that, the focus shifts to the second half of 2027, when the first Saudi crude is due to be stored at the Jurong Rock Caverns. The real test of the arrangement, as both ministers described it, will come if another supply disruption hits the region: whether barrels held close to Asian markets can steady supplies faster than shipments that must still travel through Hormuz.