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Sri Lanka’s sole refinery faces closure after Iran sanctions

Sri Lanka’s only oil refinery may be forced to shut for up to two weeks after sanctions on Iran have led to Sri Lanka struggling to seek out alternative supplies of crude oil.

Sri Lanka depends almost entirely on Iran for crude oil, with the 50,000 barrels-per-day refinery in Sapugaskanda only able to process that particular type of crude oil.

Ceylon Petroleum Corporation general manager Susantha Silva told Reuters,

"At the moment, we are having problems with getting the required Iran crude... We are still trying, even right now. If it is not, then we have no choice, but to shut down for two weeks."

"We used Arabian light (crude) and we had problems but we have adjusted it now, (though) we are still unable to run at the full capacity... Arabian light will not give the proper yield so it is virtually not profitable also."


"The refinery needs Iranian crude but we have no choice now...
We have no choice but to try out any other crude. That's the situation at the moment but at the same time we are not allowing the country to dry out."

Sanctions imposed on Iran by the United States have forced Sri Lanka to scramble for other sources of oil from Oman and Saudi Arabia.

However, Sri Lanka still attempted 3 times to send ships to obtain Iranian crude oil. All 3 attempts were defeated.
Silva commented,

"I sent a ship and the ship was almost there and they could not get the insurance. (It) has come back and then anyway we were trying (to get a crude cargo) without payment because we can't open a (letter of credit)."

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