Sri Lanka may have paid up to $286 per barrel for oil, says HSBC chief

Sri Lanka may have purchased oil at around $286 per barrel amid the Middle East conflict, according to HSBC Chief Georges Elhedery, who said oil prices can be significantly higher than Brent crude benchmarks in Asia when insurance, shipping, and supply scarcity are taken into account.

According to a report by the Middle East Eye, speaking at an investment forum in Hong Kong on Tuesday, Elhedery highlighted how benchmark oil prices in the West fail to reflect the actual costs faced by buyers in parts of Asia.

“What worries me is not the headlines. Oil headline is above $100, $110,” he said, according to a transcript obtained by Bloomberg. “Realistically, if you are now trying to get oil from the Middle East, you may be paying $140, $150.” He added that the highest figure he had heard was $286 in Sri Lanka.

The disparity stems from the ongoing U.S.–Israeli war on Iran, which has disrupted global energy flows. Iran has taken control of the Strait of Hormuz, blocking Gulf exports, while the U.S. has responded with its own blockade against Iranian oil. As a result, exports through the Strait have slowed to a trickle.

Saudi Arabia has emerged as the region’s top exporter, sending roughly five million barrels per day from its Red Sea port of Yanbu. Yet even the Omani benchmark, trading at around $100 per barrel, does not capture the full burden on Asian buyers.

Shipping rates have surged, with costs from the Red Sea adding $30–40 per barrel, while insurance premiums have jumped from 0.25 per cent to 5 per cent.

The crisis has left countries like Sri Lanka facing extreme price shocks, underscoring the vulnerability of smaller economies to geopolitical conflicts. 

Iran has further warned it could close the Red Sea unless the U.S. lifts its blockade, raising fears of deeper disruptions to global energy supply.

Full report: https://sl1nk.com/n658yo2 (Newswire/ Middle East Eye)