Japan, Saudi to sign emergency oil supply pact
(REUTERS) - Japan and Saudi Arabia will sign an agreement this weekend that will allow Tokyo to make emergency requests for additional supplies of crude oil, Japan's Nikkei newspaper reported in its Friday edition.
The agreement would set up a telephone hotline between the two governments to allow Japan to quickly seek additional oil supplies in the event of extraordinary circumstances such as terrorist attacks, unrest in the Middle East or a spike in the price of oil.
Japan opted to seek the supply deal because Saudi Arabia's crude oil exports are set to decline, the Nikkei report said.
Although the kingdom retains significant spare crude oil production capacity, its crude oil exports are falling due to growing domestic oil demand and plans to expand Saudi oil refineries to export more refined products.