Tokyo’s trade ministry has agreed in principle to allow the UAE to continue to store crude in Japan for at least three more years, reports Reuters.
The agreement between the two countries allows the UAE free easy access to a supply depot, and Asian markets, while Japan has priority access to the same store if it finds itself short of crude.
As the number two supplier of crude to Japan, the UAE is an important customer. The arrangement has been in effect since 2009, and the recent decision to extend it will ensure the UAE can store crude oil there for another three to five years.
Under the arrangement, the UAE is given 6.29 million barrels of free storage space at Kiire oil terminal in Kagoshima, southern Japan. Japan currently lends storage of 4.4 million barrels to the UAE, according to Reuters.
A similar arrangement with Saudi Arabia is also in effect.