Saudi Arabia is in talks to open a huge oil storage depot in Japan as the kingdom continues to shift its export focus eastward, away from the shrinking markets of the US and Europe, officials said yesterday. The move to acquire storage in the world's third-largest oil market follows an agreement that the Abu Dhabi National Oil Company (ADNOC) reached last year to store up to 3.6 million barrels on Okinawa, the small southern Japanese island.
The Saudis are in talks to store up to 16 per cent of their long-term supply to Japan on Okinawa, Hidenobu Teramura, the director for petroleum policy at Japan's ministry of economy, trade and industry told Reuters yesterday. "It will probably be one to two VLCCs (very large crude carriers) a month," Mr Teramura said, referring to the supply volume potentially diverted into storage. Japan imports about 800,000 barrels per day (bpd) from Saudi Arabia, according to official ministry figures, comprising about 20 per cent of its total oil imports.