Saudi Arabia, UAE seek up to 10-fold oil storage expansion in Japan

Saudi Arabia and the UAE are seeking a major expansion of crude storage in Japan and South Korea as persistent disruption at the Strait of Hormuz and Houthi attacks near the Bab el-Mandeb force Gulf exporters and Asian buyers to rethink supply security. The New York Times reported that Riyadh and Abu Dhabi asked Japan to raise their existing reserves of about 8 million barrels each by up to 10 times, while parallel talks are under way in South Korea over storage volumes and cost-sharing. The strategy would let the two producers keep serving East Asian customers from local stockpiles even when maritime routes are constrained, though the requested volumes could strain Japan's available tank space and compete with Japanese refiners' inventories and strategic petroleum reserves (emergency state-held oil stockpiles). Japan has hosted overseas crude since the UAE started storing oil there in 2009, followed by Saudi Aramco in 2010 and Kuwait in 2020, and Japan drew on part of those barrels in the early stages of the Iran war. The pressure on supply chains is also reshaping trade flows: Idemitsu Kosan President Noriaki Sakai said the refiner is importing Saudi crude from Yanbu via the Suez Canal and around the Cape of Good Hope, with voyages stretching from about 20 days to 50-60 days, while Saudi Aramco has offered extra loadings from Egypt's Sidi Kerir through the SUMED pipeline (Red Sea-Mediterranean oil link).

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