Sri Lanka receives first crude shipment after Middle East escalation

Sri Lanka received its first crude shipment for its solo Iran-built refinery after the start of escalation in the Middle East, Deputy Energy Minister Arkam Ilyas said.

The island nation, which was buying crude from the UAE, was struggling without crude after U.S./Israel started bombing on Iran on February 28.

The island nation switched to more expensive refined oil amid fear of not receiving any crude shipments with the closure of the Strait of Hormuz.

“Today one shipment has arrived and we have bought it at $71.99 per barrel,”

Deputy Minister Ilyas told reporters at a special media briefing in Colombo.

“We are also receiving another (shipment) on April 29 at $71 per barrel and another one in mid May at $113 per barrel. We have never purchased crude oil at that price. We have always bought at around the index price.”

Sri Lanka’s Sapugaskanda oil refinery has been modified to refine Murban since 2012 after the U.S. sanctions on Iran denied Sri Lanka’s options of buying Iranian light crude, for which the original refinery was built for.

The efficiency of the 50,000 barrel per day refinery has declined due to the usage of other crude.