Sri Lanka’s Media Minister Keheliya Rambukwella told reporters that the government has been bypassing US sanctions on Iranian oil purchases by buying through third parties, claiming that there was an “understanding” with Washington, but the US “categorically” denied such an agreement, reported Reuters on Friday.

“We have been buying (Iran crude) from third parties. But we have had some understanding with the U.S. as well,” Keheliya Rambukwella, who is also spokesperson for the government, said.

“This is not the [permitted] quota. This is in addition to the quota. For instance, Malaysia supplied [what] happened to be Iranian oil,” he said.

“It is a very closed secret,” he added.

"I know the gravity of it. I know it's a serious statement," he said when asked by reporters if he was aware of the possible implications of what he was saying.

A spokesperson at the US embassy in Colombo denied Rambukwella’s claims.

"We categorically deny there was any agreement," a spokesman at the embassy told Reuters.

Rambukwella was speaking to reporters at a briefing on Thursday, when he made the claims.

“Iran was supplying to ‘X’ place under a different name and from there to other places. Wherever there are sanctions, third parties are involved,” Rambukwella said.

Asked the number of Iran crude cargoes that Sri Lanka has obtained through third parties, Rambukwella said, “I have no idea, but it was time to time.”

“At the end of the day, you get the oil, and our refinery is meant for Iranian crude. They have a sulphur problem and other issues,” he said.

Sri Lanka’s External Affairs Ministry meanwhile denied that the minister made those claims, rejecting the Reuters article in its entirety.

"The Government of Sri Lanka categorically rejects the contents of this news item as being wholly incorrect and devoid of any truth," the External Affairs Ministry said.