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.