Crude oil stocks held by Saudi Arabia and Abu Dhabi in Japan surged 28% month on month to about 9 million barrels at the end of November after Saudi Aramco discharged a crude cargo at its leased oil storage terminal in Okinawa in the southwest.
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The crude stocks held by Saudi Arabia and Abu Dhabi were 1.41 million kiloliters, or 8.87 million barrels, at the end of November, equating to four days of Japanese oil consumption, up from 1.1 million kiloliters a month earlier, according to data released Wednesday by the Ministry of Economy, Trade and Industry.
Saudi Aramco discharged a crude cargo at its leased oil storage terminal in Okinawa in November after making shipments from the terminal in October and March, a source familiar with the matter said.
The fully laden VLCC Arsan discharged a crude cargo at its leased Okinawa terminal from Saudi Arabia's Ras Tanura over November 4-7, according to S&P Global Platts trade flow software cFlow.
Saudi Aramco shipped a 136,000 mt Arab Light crude cargo on the Suezmax tanker Glorycrown from the Okinawa terminal to China in October after having shipped another crude cargo on the Suezmax Jag Lakshya to the same country in March.
According to METI data covering January-November 2019, a total of 1.09 million kiloliters, or 6.86 million barrels, of crude oil were shipped from Saudi Arabia and Abu Dhabi's leased oil storage terminals in Japan in shipments made in March, July, August and October.
The crude stocks held by Saudi Arabia and Abu Dhabi accounted for 1.7% of Japan's total petroleum reserves of 81.87 million kiloliters, or 514.95 million barrels, at the end of November, equating to 235 days of Japanese oil consumption, a slight drop from 81.98 million kiloliters at the end of October, METI data showed.
Security of supply
Japan's petroleum reserves have been in the spotlight in recent weeks in the wake of the escalation in tensions between the US and Iran in the Middle East, which supplies close to 90% of its oil imports.
Japan agreed on Monday to boost Abu Dhabi's leased crude oil storage capacity to 1.3 million kiloliters, or 8.18 million barrels, from 1 million kiloliters, a move that will not only enhance its security of supply, but also help to expand the Middle East supplier's access to the East Asian market.
The agreement was signed in Abu Dhabi during a visit by Japanese Prime Minister Shinzo Abe who had been visiting the UAE along with Saudi Arabia and Oman in an effort to ensure energy security as well as the safety of shipping in the Middle East.
Under the agreement, which involved the renewal of the existing joint crude oil storage scheme for three years, the Abu Dhabi National Oil Company can use the leased facility at Kiire in southwestern Japan as an East Asian supply base in exchange for prioritizing supply to Japan in the event of an emergency.
Following the latest deal, crude storage capacity in Japan leased to its top two crude suppliers -- Saudi Arabia and the UAE -- rose to a total of 2.6 million kiloliters, or 16.35 million barrels, equating to eight days of domestic consumption.