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Aramco seeks room in other countries' strategic oil reserves as Houthi attacks mount
Chief executive Amin Nasser says Saudi Arabia is talking to foreign governments about storing Aramco crude in their reserves, with Asia the focus, to keep supplies flowing through disruptions.
Key points
- Saudi Arabia is in talks to give Aramco access to foreign governments' strategic oil storage.
- Aramco wants to double its overseas storage capacity, especially in Asia.
- Engineering studies aim to raise east-west crude transfer capacity to 10 million barrels a day from 7 million.
Saudi Arabia is talking to foreign governments about letting Aramco store crude in their strategic oil reserves, the state oil giant’s chief executive, Amin Nasser, said on Thursday, as the kingdom looks for ways to keep supplying customers while its own infrastructure comes under repeated attack.
“Commercial storage available through partners is limited. The larger capacity lies in what we call strategic storage owned by governments,” Nasser said in an interview with Al Arabiya. “The Ministry of Energy is working with its counterparts in other countries to make strategic storage available for Aramco.”
Aramco already keeps commercial stocks in South Korea, Japan, the Netherlands and at Sidi Kerir, Egypt’s Mediterranean export hub. “We have maintained these overseas inventories for many years, but we are working to expand them, particularly in Asia,” Nasser said. He said the company wants to double its overseas capacity but gave no timetable and did not name the countries involved.
The push follows a run of Houthi strikes on Saudi infrastructure, including drone attacks that shut the kingdom’s most important pipeline for several days in September. On Wednesday, attacks on Aramco’s Shaybah oilfield and on Dammam airport each killed two people, Saudi authorities said. Brent crude rose above $112 a barrel on Thursday.
Aramco exports through three main corridors: the Strait of Hormuz, the Red Sea and Bab el-Mandeb, and Sidi Kerir. Nasser said the company has begun engineering studies to raise its capacity to move crude from the Gulf coast to the Red Sea to 10 million barrels a day, from 7 million. “We did not wait for the crisis to end,” he said.
For Asian buyers such as India, which already holds crude in underground strategic caverns and is among Saudi Arabia’s biggest customers, oil parked closer to home would offer a cushion if Gulf shipping routes are cut.