Aramco Negotiates Access to Foreign Strategic Oil Reserves

Amin Nasser, Chief Executive Officer of Saudi Aramco, stated that the Kingdom is negotiating with foreign governments to grant the state-owned company access to their strategic oil reserves in an effort to make its supplies more resilient during disruptions, according to Bloomberg.

Nasser explained in an interview with Al Arabiya on Thursday that "commercial inventory available through partners is limited, and the largest capacity lies in what we call strategic inventory owned by governments," adding that the Ministry of Energy is working with its counterparts in other countries to make this inventory available to Aramco.

Aramco already holds commercial oil inventories in South Korea, Japan, the Netherlands, and Egypt's Sidi Kerir port on the Mediterranean. Nasser said the company wants to double its overseas storage capacity, without disclosing a timeline or current capacity.

He noted that the company has begun engineering studies to boost its capacity to transport crude from the eastern Gulf to the Red Sea in the west to 10 million barrels per day from 7 million, in addition to working on other routes. The move follows Houthi attacks on Saudi facilities, including drone strikes that disrupted the Kingdom's main pipeline for several days in September, as well as attacks on the Shaybah field and Dammam airport that killed two people in each location, according to Saudi authorities.

What Do These Terms Mean?

Strategic Reserve: An oil reserve owned by governments to be used during supply disruptions or crises.

Storage Capacity: The amount of oil that can be stored in a facility or a network of facilities at one time.

Pipeline: A pipe that transports oil or gas over long distances between production fields and export ports or refineries.