Symbiotic relationship between Japan and KSA goes beyond oil

Symbiotic relationship between Japan and KSA goes beyond oil
Saudi Aramco stores oil in three main locations: Rotterdam in the Netherlands for the European market; Sidi Kerir in Egypt for the Mediterranean market; and since early 2011, Okinawa in Japan for the Asia-Pacific market. (AFP)
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Updated 14 January 2020

Symbiotic relationship between Japan and KSA goes beyond oil

Symbiotic relationship between Japan and KSA goes beyond oil
  • Saudi Arabia supplies Japan with liquefied petroleum gas (LPG), which is a mixture of propane and butane used for cooking and as a transport fuel. It is also an important feedstock for the petrochemical industry
  • In response to a major earthquake in Japan in 2011, the Saudi government donated products equivalent to $20 million through Saudi Aramco

Japan is the world’s fourth-largest crude oil importer, at an average of around 3 million barrels per day. It imports a third of its crude oil from Saudi Arabia. Japan has for decades been the largest crude oil market in Asia for the Kingdom.
Saudi Aramco stores oil in three main locations: Rotterdam in the Netherlands for the European market; Sidi Kerir in Egypt for the Mediterranean market; and since early 2011, Okinawa in Japan for the Asia-Pacific market.
Saudi Aramco has stored crude in Okinawa for commercial purposes in exchange for prioritizing supply to Japan in the event of an emergency. This is extremely important for Japan’s energy security, specially during escalating geopolitical tensions.               
Saudi Aramco started by storing around 4 million barrels of crude oil in the Okinawa facilities. In 2016, the company and Japan agreed on a 2-million-barrel expansion of the crude storage capacity in Okinawa. In return, Japan continued to get a priority claim on the stockpiles in case of an emergency.
Later, it was agreed to raise the storage capacity in Okinawa to 8.2 million barrels. In December 2019, Japan renewed its deal with Saudi Aramco for crude oil storage in Okinawa for another three years.
The Kingdom also supplies Japan with liquefied petroleum gas (LPG), which is a mixture of propane and butane used for cooking and as a transport fuel. It is also an important feedstock for the petrochemical industry.
In response to a major earthquake in Japan in 2011, the Saudi government donated products equivalent to $20 million through Saudi Aramco. The two countries agreed to establish the Saudi LPG Emergency Relief Fund within the Japan Gas Association to distribute aid to the region affected by the earthquake.

 


Oil prices rise as market awaits deal output deal

Updated 03 December 2020

Oil prices rise as market awaits deal output deal

Oil prices rise as market awaits deal output deal
  • OPEC and its allies create uncertainty with two-day delay to meeting to decide whether to increase production

LONDON: Oil prices rose on Wednesday as the market awaited a pact from producers on output, which many traders expect will continue to be reined in, and Britain’s approval of a COVID-19 vaccine gave hopes for a demand recovery a boost.

Prices were hit earlier by a surprise build in oil inventories in the US and as OPEC and its allies created uncertainty with a two-day delay to a formal meeting to decide whether to increase production in January.

Brent crude oil futures were up 1.9 percent at $48.31 in late afternoon trade in London, while West Texas Intermediate crude was also up about 2 percent to $45.46.

Industry data from the American Petroleum Institute showed US crude inventories rose by 4.1 million barrels last week, compared with analysts’ expectations in a Reuters poll for a draw of 2.4 million barrels.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, a group known as OPEC+, postponed talks on next year’s oil output policy to Thursday from Tuesday, according to sources.

The group this year imposed production cuts of 7.7 million barrels per day (bpd) as the coronavirus pandemic hit fuel demand.

It had been widely expected to roll those reductions over into January-March 2021 amid spikes in COVID-19 cases.

But the UAE said this week that even though it could support a rollover, it would struggle to continue with the same deep output reductions into 2021.

“Energy markets will remain on edge until OPEC+ gets past tomorrow’s meeting. Oil prices should continue to have underlying support as vaccine makers announce start dates for beginning immunizations,” he added.

Britain on Wednesday became the first western country to approve a COVID-19 vaccine, jumping ahead of the US and the EU in what may be a first step toward a return to normal life and boost to oil consumption.