Route bypassing Hormuz: Saudi and UAE initiative to expand oil reserves in Asia | Report
Against the backdrop of turmoil in the oil market and continued disruptions to shipping routes in the Middle East, the Gulf is no longer waiting for a solution: "You cannot rely on Donald Trump."
The New York Times reported that Saudi Arabia and the UAE have asked Japan to increase their oil reserves on its territory. The move comes against the backdrop of disrupted tanker traffic in the Strait of Hormuz and Houthi attacks in the Red Sea. Increasing reserves in Asia is intended to reduce exposure to prolonged disruptions in oil supplies. Japan, which imports more than 90% of its oil from the Middle East, already used these reserves in the first months of the war.
Saudi Arabia and the UAE are promoting a move to significantly increase their oil reserves outside the Middle East. This comes against the backdrop of rising tensions in the Gulf over the past year and the disruption of tanker traffic in the Strait of Hormuz by Iran. The goal of the energy powers is to move as much oil as possible to safe destinations — far from the Persian Gulf.
According to sources, the countries are urging Japan to increase storage capacity for them by up to ten times. Currently, each of them holds about 8 million barrels of oil there. At the same time, similar talks are being held with South Korea.
A common interest for the Gulf states and Asia
The move serves both sides. For Gulf exporters, storage abroad provides critical protection against risks on major shipping routes, such as the Red Sea and the Strait of Hormuz, which does not appear likely to open soon. For Asian countries — the world's largest consumers of Middle Eastern oil — this is a vital backup in case of long-term supply disruptions.
However, the move is accompanied by logistical challenges, as the requested quantities are expected to exceed Japan's available storage capacity. Despite this, talks between the parties are continuing. A spokesperson for the Abu Dhabi National Oil Company emphasized the commitment to providing stable energy supplies to Asia, while the Japanese Ministry of Economy confirmed that joint work is underway to strengthen the country's energy resilience.
The global energy map is changing
The move is part of a broader shift in global energy markets in the shadow of the war between the USA and Iran. Similar to the oil crises of the 1970s, the current crisis is forcing countries and companies to recalculate their path: producers in the Gulf are working to create land routes that bypass the Strait of Hormuz, and major importers are working to expand their energy sources.
The head of the Institute of Energy Economics in Japan stated:
"At this stage, we cannot rely on the hope that President Donald Trump will solve the situation. Asia and the Middle East are required to find solutions themselves."
The storage model is not new to Japan. Tokyo has been leasing storage space to Gulf states since 2009, thanks to a decline in local oil consumption. In exchange for storage, Japan gains preferential access to oil in times of emergency — a right that was utilized in the first months of the current war.
