Saudi oil giant Aramco inked an oil storage agreement with Korea National Oil Corp (KNOC) to store 5.3 mn barrels of oil for five years, state-owned South Korean news agency Yonhap reports. The move follows South Korean President Yoon Suk Yeol’s visit to Riyadh where he met with Saudi Crown Prince Mohammed bin Salman.

The details: The oil will be stored in South Korea’s southeastern port city of Ulsan, Reuters adds. The majority of Saudi crude will be Arab Light grade, S&P Global cites a KNOC official as saying. An initial shipment of 2 mn barrels will be sent to the country soon, the source adds. KNOC will have the right to purchase the oil held in reserve in emergencies, the official said.

What they said: “The agreement, which comes at a time when oil prices are fluctuating due to political instability in the Middle East due to the armed conflict between Israel and Hamas, would boost South Korea's energy security by preemptively attracting large volumes of Middle Eastern sour crude,” KNOC said in a statement.

The agreement is good news for both KSA + South Korea:The storage agreement boosts South Korea’s supply security as it shifts away from Russian oil, South Korean refiners told S&P Global. It also helps Saudi Arabia gain a bigger market share in Asia.

This is not the first storage agreement between Gulf oil producers and South Korea: KNOC also secured a storage agreement with Adnoc to store 4 mn oil barrels earlier this year.

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