Sri Lanka talks badly-needed Iran oil imports

Iran and Sri Lanka have begun new talks to resume oil shipments to the Asian country, head of the National Iranian Oil Company (NIOC) Roknoddin Javadi says. 

Sri Lanka was dependent almost entirely on Iran for its crude oil supplies before halting imports under US pressures in 2012.

Javadi said Iran is ready to resume sales when sanctions are lifted on the Islamic Republic in early 2016. “Iran’s oil negotiations have started with Sri Lanka,” the Mehr news agency quoted him as saying.

He said numerous talks have been held with Sri Land and other traditional oil customers over the past few months to resume Iran’s exports.

“All the countries are serious about purchasing crude oil from Iran,” he said, adding “we believe we will have suitable conditions”.

Javadi, however, stated that resuming exports to traditional clients will be “time-consuming”, Mehr reported.

Sri Lanka has been importing oil from Oman, Saudi Arabia and the UAE since sanctions were imposed on Iran.

Before the sanctions, the Asian country bought 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.

US sanctions have left Sri Lanka struggling, with its sole refinery facing shutdown from time to time amid shortfalls in the absence of Iranian crude.

According to officials, the facility’s switch to processing alternative crudes has reduced the yield. For instance, processed products from Oman light and Murban crude of Abu Dhabi have been 20% lower than those from Iran light.

Saudi Arabia’s light has also higher sulfur content than the Iranian grade.

According to Sri Lankan Petroleum Minister Susil Premajayantha, every 5,000 metric tons of Iran light yielded 1,250 tons of gasoline and 1,200 tons of gasoil. This ratio worked out to drop to 600 metric tons of gasoline and 1,400 tons of gasoil when Saudi light was used.

By Press TV