Saudi Oil to Be Stored in Okinawa

Wednesday, June 16, 2010

Shinzo Abe and King Abdallah

Tokyo -- The Ministry of Economy, Trade and Industry (METI) has announced that Japan and Saudi Arabia have agreed on joint use of crude oil storage facilities in Okinawa in exchange for a preferential right to obtain oil in times of emergency.

Under this scheme, it appears that Japan will begin storing about 3.8 million barrels of Aramco's crude oil.

The agreement is a concrete manifestation of strengthening Japan-Saudi economic ties, and lessens the potential impact of a temporarily disruption of shipping through the Malacca Straits.

This project has its origins in the April 2007 visit of then-Prime Minister Shinzo Abe to Saudi Arabia in which the Japanese side first proposed the arrangement.

The Abu Dhabi National Oil Company (ADNOC) reached a similar bargain with Japan last year, and oil from the Emirates has been stockpiled in Kagoshima Prefecture since December.

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