Saudi Aramco Looks Abroad to Store Its Oil

Saudi Aramco is talking to foreign governments about using their strategic petroleum reserves, chief executive Amin Nasser said, as the world’s largest oil exporter looks for ways to keep crude flowing when its own infrastructure is hit. The discussions, reported on Thursday, would let Aramco store oil in other countries’ emergency stockpiles and draw on those tanks to serve customers if Saudi facilities are disrupted.

The move follows a string of attacks on Saudi oil infrastructure. In September, a drone strike shut down the kingdom’s most important oil pipeline for several days, according to Saudi authorities. On Wednesday, Aramco’s Shaybah oil field and Dammam airport were each attacked, with two people killed at each site. The Shaybah field sits in the Rub’ al Khali, the vast desert in the country’s southeast, and is one of the company’s largest producing assets.

Strategic petroleum reserves are government-held stockpiles, usually kept for national emergencies. Countries such as Japan, South Korea and members of the International Energy Agency hold hundreds of millions of barrels in underground caverns and tank farms. Gaining access to such facilities would give Aramco a buffer far from the Gulf, letting it deliver oil to Asian and European buyers even if loading terminals or pipelines at home are damaged.

The idea fits a broader shift in how oil producers think about supply security. For decades, importers built reserves to protect themselves against cutoffs from exporters. Now an exporter wants to use those same reserves as a distribution network. Aramco has long held storage and blending facilities abroad, including in the Netherlands, Japan and the United States, but those are commercial tanks rather than government reserves.

For buyers, the appeal is continuity. Asian refiners, which take the bulk of Saudi crude, have grown used to long-term contracts with steady monthly volumes. Any interruption forces them to scramble for spot cargoes, often at higher prices. If Aramco can hold barrels in importing countries, it can keep contract deliveries on schedule and smooth out the price spikes that follow attacks.

The talks also come as Gulf producers face a more contested neighborhood. Iran’s Islamic Revolutionary Guard Corps navy warned this week that it could widen its confrontation if ships keep using what it called illegal routes through the Strait of Hormuz, the narrow waterway through which about a fifth of the world’s oil passes. A senior Iranian security official said the current situation could bring sustained turmoil to energy markets for the next three years. Gulf states, he added, are rapidly redefining their relations with Iran.

Saudi Arabia has also been hit from the south. The Saudi-led coalition said it intercepted and destroyed a drone over Riyadh, the capital, this week. Attacks from Yemen have repeatedly targeted the kingdom’s airports and oil sites in recent years, including the September pipeline shutdown.

Aramco has not named the governments it is negotiating with, nor said how much storage capacity it is seeking. The company’s shares, like those of other oil majors, have been sensitive to headlines about supply risk. For global oil traders, the practical question is whether foreign reserves can be used quickly enough to matter during a crisis, and whether importing countries are willing to let a foreign producer park its barrels in facilities built for their own emergencies.

Nasser’s comments suggest Aramco sees storage abroad as a form of insurance rather than a substitute for its own tanks. The company already operates one of the largest storage systems in the world inside Saudi Arabia, including the huge Muajjiz and Yanbu terminals. Extending that network across borders would make the kingdom’s exports harder to choke off, but it would also tie its commercial fortunes more closely to the policies of host governments.

For now, the plan remains at the discussion stage. What is clear is that the attacks have pushed the world’s biggest oil company to rethink where it keeps its spare barrels.