Sri Lanka suffering huge loss after replacing Iranian oil with Arabian crude

TEHRAN (FNA): Sri Lankan officials are concerned that the output of the Arabian Light crude used by the country after oil sanctions against Tehran to produce different oil products cannot be compared to the output of the Iranian Light, saying they are wary of the great loss they have sustained due to the replacement.

Sri Lankan media reported that the refining of Arabian light crude oil has resulted in a decline in the output of petrol and kerosene.

The country previously used Iranian light crude oil, which has now been stopped following the western sanctions on Iran. The government has now turned to the next option, Arabian light crude oil.

Petroleum Minister Susil Premajayantha said the Government had no other option but to look for alternative crude oil supplies, and explained that the yield from Arabian Light crude oil was less than Iranian Light.

He pointed out that the sulphur content in Arabian light crude oil was higher than Iranian Light.

“Usually when 5,000 tons of Iranian crude is refined we produce 1,200 tons of diesel and 1,250 tons of petrol while rest are kerosene and furnace oil. However, with Arabian Light crude oil, we get around 1,400 tons of diesel and 600 tons of petrol,” Premajayantha said.

According to the Minister, there is a 10 per cent decline in the yield when refining Arabian light oil.

Under pressure from the United States, the EU foreign ministers approved new sanctions against Iran’s oil and financial sectors last January.

The sanctions, which prevent EU member states from purchasing Iran’s oil or extending insurance coverage for tankers carrying Iranian crude, came into effect on 1 July.

On 1 August, the US Congress approved more illegal embargoes against Tehran, which seek to punish banks, insurance companies and shippers that help Tehran sell its oil.

Iran’s OPEC governor Mohammad Ali Khatibi said last month that the Islamic Republic keeps supplying crude oil to its customers regardless of the US and European-imposed embargos.

“Iran’s crude sale is going ahead as usual and we continue to sell oil to our traditional buyers in the remote places of the world,” he said.

Iran is the second largest OPEC oil producer, producing about four million barrels of oil a day. The country’s recoverable oil reserves are estimated at more than 137 billion barrels, or 12 per cent of the world’s overall reserves.