Iran-SL set to seal post-sanction oil sale deal

Iranian and Sri Lankan Oil Ministers have begun a fresh round of oil talks over signing the first oil sale contract in the post-sanction era, Iran’s MNA news service reported.

With the passage of seven months since sanctions removals and Iran’s entrance to post-sanction period, a new round of oil talks between Iran and Sri Lanka kicked off over the weekend in Tehran in the presence of Iran’s Oil Minister Bijan Zanganeh as well as the Minister of Petroleum Resources Development Chandima Weerakkody.

Sri Lanka is a traditional customer of Iranian crude as nearly 100% of the oil demand in its only oil refinery under the Ceylon Petroleum Corporation, was supplied by Iran before the imposition of international sanctions.

Speaking on the sidelines of a meeting with his Sri Lankan counterpart, Iran’s Zanganeh said the ties between the two countries, which had halted due to sanctions, would be reinvigorated, “being situated in the Indian Ocean region, Iran and Sri Lanka are naturally in conjunction with each other”.

The official, while emphasising that Iran could launch cooperation with the South Asian country in various fields, said there existed no restrictions for expansion of bilateral relations, especially in oil, gas and petrochemical areas.

He further voiced Iran’s readiness to bolster ties with Sri Lanka reiterating “we are optimistic that the Sri Lankan Petroleum Minister’s visit to Tehran would alleviate obstacles created during sanction years”.

Recently, National Iranian Oil Company (NIOC) Executive Director for International Affairs Seyed Mohsen Ghamsari announced oil exports to Sri Lanka had not started yet, adding, “NIOC executives in Singapore have launched talks with officials if Ceylon Petroleum Corporation over resumption of oil sales”.

The NIOC official had voiced Iran’s readiness to supply the whole 40,000 barrel demand of Sri Lanka underlining “over the past three years, some countries have taken Iran’s market share during sanction years and we are seeking to regain the market”.

At the present time, Sri Lanka’s total crude oil demand is estimated to be approximately 45,000-50,000 barrels per day.

Following the application of international sanctions, Iran’s crude was replaced by Saudi Arabian and Omani oil in the South Asian country’s refinery.

Meanwhile, Weerakkody had then announced that the use of Saudi Arabia’s oil had brought about a significant decline in the country’s gasoline production.