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Korean company signs oil storage deal with Aramco

Aramco's storage facility. Oil revenue reached SAR505.4bn in the first nine months of 2023, falling 24 percent year on year Aramco
Aramco made its biggest cut on the OSP in 13 months for February cargoes to a 27-month low amid competition from rival suppliers

South Korea’s state-run Korea National Oil Corp (KNOC) announced on Monday it has signed an oil storage agreement with Saudi Arabia’s oil giant Aramco to reserve 5.3 million barrels for five years.

The agreement announced in a press release posted on KNOC’s company blog was sealed as South Korean President Yoon Suk Yeol is visiting Riyadh for talks with Saudi Crown Prince Mohammed bin Salman and to attend other business events.

By storing Aramco’s oil in its reserves, KNOC said it would be able to enhance energy security.

Aramco was not immediately reachable for comment.

Yoon’s office said on Sunday that the oil will be stored at a reserve in South Korea’s southeastern port city of Ulsan, and the country has also secured the right to preferentially purchase the stored oil in case of emergency, as well as rental fees for the five-year period.

South Korea is the world’s fifth-biggest crude oil buyer, and Saudi is its No.1 provider.

Earlier this month, Reuters reported that India wants Saudi Aramco to participate in its planned 6.5 million metric tonnes strategic petroleum reserve (SPR) programme as the South Asian nation aims to strengthen ties with its key oil supplier.