Despite Iran sanctions, swift action to import crude oil

Yasaratne GAMAGE

The Petroleum Corporation has already taken initiatives to swiftly import the required amount of crude oil despite the export sanctions against Iran, to assure continued fuel supplies, Petroleum Industries Ministry media sources said. Though there might be a slight delay in importing crude oil due to the continuous sanctions against Iran from whom Sri Lanka imports crude oil, the Petroleum Corporation will continue its supply with the stocks they have which are sufficient for coming weeks.

About 70 per cent of the country’s fuel requirement is fulfilled through imported refined oil while the balance 30 per cent is met with imported crude oil which is refined at Sapugaskanda oil refinery.

Sri Lanka also import crude oil from Iraq and Saudi Arabia. The US sanctions against Iran has affected many countries including Sri Lanka and face difficulties in importing crude oil.Earlier Sri Lanka imported 13 crude oil ships from Iran and after the economic sanctions it was reduced to 10 ships and later came to a complete halt as the sanctions were strengthened by the US.

The economic sanctions against Iran included ban on exporting oil using Iranian shipping lines and termination of insurance to Iranian oil ships which cut down Iranian oil supply to a greater extent to many countries.

The situation was made worse for Sri Lanka as the Sapugaskanda refinery is best suited for ‘Iranian light’ while similar crude oil such as ‘Arabian light’ can also be able to be processed in the plant meeting required specifications.

As a result the Petroleum Corporation has opted to increase the quantity of Arab light and has plans to import crude oil from Oman. As an urgent requirement the ‘Spot Tenders’ process would be a quick solution.