Aramco CEO says kingdom seeks foreign strategic storage

Saudi Arabia and Aramco are looking for partnerships with other countries to expand strategic oil storage, Chief Executive Amin Nasser said in an interview with Al Arabiya Business that aired on Thursday, October 22. He said he expects oil demand to rise by about 3 million barrels per day once the Iran war ends. He also said Aramco wants to double its overseas storage capacity and is studying new export routes. One of those plans would raise the East-West pipeline's capacity from 7 million to 10 million barrels per day.devdiscourse.com+1

The comments came as Houthi attacks on Saudi energy sites added to supply fears. Drone strikes shut the kingdom's most important pipeline for several days in September. On Wednesday, attacks on Aramco's Shaybah oil field and on Dammam airport killed two people at each site, according to Saudi authorities.business-standard.com

Government-owned storage

Nasser said partners have only a limited amount of commercial storage to offer. "The larger capacity lies in what we call strategic storage owned by governments," he said. "The Ministry of Energy is working with its counterparts in other countries to make strategic storage available for Aramco". Aramco already stores oil in South Korea, Japan, the Netherlands and at Egypt's Sidi Kerir terminal. Nasser said the company wants to expand that network, especially in Asia, but he gave no timetable and did not say how much it can store abroad today.business-standard.com

Of the 3 million barrels per day of expected demand growth, Nasser said about 2 million would come from rising consumption. The other 1 million would go toward refilling inventories that countries drew down during the crisis. He estimated that the market has lost about 3 billion barrels of supply since the conflict began. He said prices would have risen further without releases from strategic reserves and flows through the East-West pipeline.english.alarabiya.net

Routes around Hormuz

Nasser said Aramco has three main export routes: the Strait of Hormuz, the Red Sea through Bab el-Mandeb, and Sidi Kerir on the Mediterranean. The East-West line carries crude from the Eastern Province to Yanbu on the Red Sea. Roughly 2 million barrels a day of its capacity goes to domestic refineries. According to Egypt Oil & Gas, engineering work on the expansion began early in the conflict.maaal.com+2

The plan builds on what Energy Minister Prince Abdulaziz bin Salman said at the WPC Energy Congress in Riyadh on October 12. He said the kingdom aims to reach 10 million barrels a day of pipeline capacity within two to three years. He added that temporarily using a natural gas line to carry crude could add 1.2 million barrels a day within about eight weeks.supplychainbrain.com

Building resilience

Nasser said the kingdom's capacity to handle shocks comes from long-term planning, not crisis measures. "We did not wait for the crisis to end," he said, adding that resilience requires "decades of investment and preparation".business-standard.com