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Saudi Aramco and Japan extend crude storage deal for three years

REUTERS/Maxim Shemetov
The fall in net profit will be due to a weak demand outlook amid a global economic slowdown

Japan Organization for Metals and Energy Security (JOGMEC) has renewed a deal with Saudi Aramco for crude oil storage on the island of Okinawa for another three years, the state-run Japanese company said on Thursday.

Under the agreement, JOGMEC leases 13 national crude oil stockpiling tanks on the island southwest of mainland Japan to Aramco, enabling Saudi Arabia’s state oil producer to store about 1.3 million kilolitres of crude oil for the next three years, JOGMEC said in a statement.

In return for providing free storage space to Saudi Aramco, Japan gets a priority claim on the oil stocks in an emergency.

The tank lease deal has been running since 2010 and has been renewed every three years.

In October, Saudi Minister of Energy Prince Abdulaziz bin Salman and Japan’s Minister of Economy, Trade and Industry Yasutoshi Nishimura stressed the significance of supporting the stability of the global oil market by promoting dialogue and cooperation between producing and consuming countries, state-run Saudi Press Agency reported.

The two ministers stressed the need to ensure the security of supplies for all energy sources in global markets, noting that the Kingdom will continue to be the most reliable partner and exporter of crude oil supplies to Japan.