Saudi crude to be stored in Singapore from 2027

Saudi Arabia plans to begin storing crude oil in Singapore’s Jurong Rock Caverns from the second half of 2027, under a new bilateral energy arrangement. The joint intent, announced on Monday by the energy ministers of both countries at Singapore International Energy Week, will see Saudi crude held in underground caverns on Jurong Island to support supply security in Asia.

Singapore’s minister responsible for energy said the two sides had agreed in principle to the arrangement. The move is framed as strengthening the resilience of the Saudi crude oil supply chain in Southeast Asia while also contributing to Singapore’s own energy security in the event of supply disruptions.

To realise the storage plan, Saudi Aramco is due to sign a memorandum of understanding with Singapore’s Energy Market Authority and JTC Corporation, as well as with the Jurong Group, which develops the island’s industrial estate. Officials aim to conclude negotiations within a few months after the signing.

Singapore’s Ministry of Energy, Trade and Industry and Saudi Arabia’s Ministry of Energy jointly announced the intent to establish the crude oil arrangement. The memorandum of understanding is described as a first step toward implementing storage operations from the second half of 2027.

Singapore states that holding Saudi crude in Jurong Rock Caverns will enhance the resilience of Saudi supply chains in Southeast Asia and support Singapore’s energy needs during any supply disruption. The stored oil is intended to act as a buffer, reinforcing the city-state’s role as a regional energy hub.

The plan is also presented as a contribution to broader Asian energy security at a time when oil shipments through the Strait of Hormuz are severely disrupted by the war with Iran. Before the conflict, about two-thirds of Asia’s crude oil was supplied from the Middle East, leaving the region exposed to interruptions in Gulf export routes.

Jurong Rock Caverns, located 150m beneath Jurong Island, has a total storage capacity of 1.47 million cubic metres, described as enough to fill 600 Olympic-sized swimming pools. The facility adds underground capacity to Singapore’s existing oil and petrochemical infrastructure.

The crude storage initiative coincides with Singapore’s new five-year energy infrastructure plan, which includes developments in power generation, the electricity grid, solar deployment, energy storage and low-carbon electricity imports. As part of this plan, Singapore is also consulting industry on large-scale energy storage systems to meet rapidly growing electricity demand.

Singapore’s leadership links the crude storage agreement with efforts to cope with supply crunches and rising resource nationalism in global energy markets. Recent closure of the Strait of Hormuz and attacks on Saudi Arabia have highlighted vulnerabilities in energy flows to Asia.

Officials emphasise that, while the Saudi crude storage will only start operating from the second half of 2027 and will not add barrels to the market before then, it is designed to ensure Singapore remains prepared for future disruptions. The agreement with Saudi Arabia is presented as shoring up the country’s strategy of tapping diverse energy sources and leveraging new technologies to weather external shocks.