Saudi Arabia, Korea Sign MoU to Expand Crude Storage Capacity in South Korea

Saudi Arabia and South Korea signed a memorandum of understanding covering oil and gas cooperation, with a specific focus on expanding Saudi crude storage capacity, the Saudi Press Agency reported. The agreement also opens the door for joint work on oil infrastructure projects. No target volumes, timelines, or specific storage sites were disclosed. The MoU is a non-binding framework.

South Korea is the world's fifth-largest crude importer, taking roughly 3 million barrels a day. Most of that comes from the Middle East, with Saudi Arabia as the top supplier. Expanding storage on the Korean side would let Seoul build strategic reserves closer to its refineries and give Riyadh a more flexible delivery channel for its Asian customers.

For Saudi Arabia, the deal fits a broader push to lock in long-term demand from Asia. The kingdom has been investing in downstream assets across the region – refineries and storage terminals – to secure offtake agreements that outlast spot market shifts.

South Korea's state-run Korea National Oil Corp. operates roughly 146 million barrels of crude storage capacity, according to company data. Adding Saudi-dedicated storage would let the two countries bypass logistical friction that shows up during tanker scheduling crunches or refinery maintenance windows.

Saudi Arabia is already the largest foreign investor in South Korea's refining sector through its stake in S-Oil, which operates the 669,000-barrel-per-day Onsan refinery, according to S-Oil filings. That existing relationship gives the storage MoU a concrete anchor. S-Oil's crude supply chain is the most likely first user of any new capacity.

For crude oil traders, the deal is a long-dated signal on Asian demand logistics, not a near-term catalyst for physical flows. Storage additions take years to build. The real test is whether the MoU produces a signed engineering contract within 12 to 18 months.