This is what I have been wondering about - oil storage. I've seen a few reports that the Saudi's have filled storage in Asia and Europe. Clarksons' Tanker Report specifically stated this about a week ago, and it was mentioned in the Financial Times most recently. Aside from this - I know the the Saudi's also have considerable oil storage within their own country, that was built through a Strategic Reserve Program throughout the 90's.There are underground facilities in at least 5 different areas. Some of the storage is linked by pipeline to the Red Sea Port of Yanbu, in case of any problems in the Srait of Hormuz.
* Cosmo buys 1.26 million barrels from storage at Okinawa
* Purchase has no relation with sanctions on Iran -sources
(Reuters) - Japanese refiner Cosmo Oil has bought 200,000 kilolitres (1.26 million barrels) of Saudi Arabian crude from storage in Japan to fill its spot requirements, industry sources familiar with the matter said on Wednesday.
The May-loading crude will be shipped from Saudi Aramco's leased storage in the southwestern Japanese island of Okinawa, the sources said, adding that this marks the first time that a Japanese refiner has bought a spot Saudi crude cargo from Okinawa.
The purchase does not have any relation to the tightening global sanctions against Iran and Cosmo can buy more spot Saudi crude from Okinawa if it makes economic sense in comparison with other spot cargoes, the sources said.
The U.S. and European Union have tightened measures aimed at reducing Iran's oil trade, stemming the flow of petrodollars to Tehran to force the Islamic Republic to halt a nuclear programme the West suspects is intended to produce weapons.
Cosmo Oil has already lowered its Iran crude imports to a little below 30,000 barrels per day (bpd) since January from about 40,000 bpd last year, and is in talks to renew its contract with the Islamic Republic from April.
Saudi Aramco, the world's top oil producer, started shipping crude to Okinawa in February 2011 as part of an agreement with state-run Japan Oil, Gas and Metals National Corp (JOGMEC) to store about 3.8 million barrels of crude there for three years.