Saudi Arabia is building up oil reserves in Singapore to deal with an oil supply disruption caused by the Iran war.

Saudi Arabia plans to strengthen the security of oil supply to Asian markets by storing some of its crude oil in Singapore's underground facilities from the second half of 2027.

This decision was made following the severe disruption in the transfer of oil from the Strait of Hormuz to Asian markets, due to the American war and the occupation with Iran. Before the war, Asian countries imported about two-thirds of their crude oil from the Middle East.

The energy ministers of Saudi Arabia and Singapore announced on Monday, October 26, at the Singapore Energy Week International Conference, the initial agreement to store Saudi crude oil in underground tanks on Jurong Island from the second half of next year.