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Sri Lanka keen to resume oil products imports from Iran

Sri Lanka keen to resume oil products imports from Iran

COLOMBO:  Earlier this year, Sri Lankan officials expressed interest to resume import of crude oil and oil products from Iran‎.

Before the imposition of international sanctions against Tehran, the Asian country was importing almost all of the 50,000 barrels of oil which it needs per day from Iran. Sri Lanka’s only refinery, the Sapugaskanda plant, is configured to run on Iranian light crude.

The sanctions left Sri Lanka struggling, with its sole refinery facing shutdown from time to time amid shortfalls in the absence of Iranian crude. In 2015 amid the nuclear talks which led to a nuclear deal between Tehran and the six world powers and removal of the international sanctions in 2016, the sides started negotiations to resume oil exports to Sri Lanka.

Iran hasn’t resumed oil export to Sri Lanka due to banking problems, despite almost two years have passed since the sanctions on Iran have been eliminated. The dispute over a huge unpaid oil bill due to Iran by Sri Lanka remains unresolved.

Earlier this year Iran’s foreign minister Mohammad Javad Zarif expressed hope that the two countries’ energy co-op would be boosted after settling the “remaining financial obstacles.” However, it seems that no significant progress has been made so far regarding the issue.

The Sri Lankan side has recently repeated the Asian country’s interest for import of oil products from Iran, without any referral to resuming crude oil import or financial issue.

The Iranian oil ministry’s SHANA news agency on Dec. 10, quoted Sharif Anis, Sri Lankan ambassador to Iran as saying his country is keen to buy oil products from Iran.

He referred to purchasing oil products and construction materials from Iran as priority in expanding trade ties between the two countries, adding that there are various export opportunities in Sri Lanka’s market regarding the items.

Furthermore, he said, tourism is another field for boosting cooperation between the two countries, adding bolstering direct investments in Iran and from Iranian investors is another field in which the two countries can cooperate.

It seems that the Asian country has no plan for the time being to import crude oil from Tehran and the Islamic Republic can only count on Sri Lanka’s oil products market, at least for a while.