FINANCIAL CHRONICLE – Sri Lanka has successfully received its inaugural shipment of crude oil for its Iran-constructed refinery amidst rising tensions in the Middle East, as confirmed by Deputy Energy Minister Arkam Ilyas.
The country had previously relied on crude oil from the UAE but faced difficulties following the escalation of hostilities, particularly after the U.S. and Israel initiated airstrikes in Iran on February 28. In response to concerns about potential disruptions in crude supply, especially with the strategic Strait of Hormuz’s closure, Sri Lanka opted to purchase more costly refined oil.
During a press conference in Colombo, Deputy Minister Ilyas announced, “Today, we received a shipment purchased at $71.99 per barrel.” He further revealed that another shipment is expected on April 29 at a price of $71 per barrel, with yet another scheduled for mid-May at $113 per barrel—significantly higher than the prices Sri Lanka has traditionally paid, which have generally aligned with the index price.
The Sapugaskanda oil refinery in Sri Lanka has been adapted to process Murban crude since 2012, following U.S. sanctions on Iran that limited Sri Lanka’s ability to procure Iranian light crude, the type for which the facility was originally designed. However, the refinery’s operational efficiency, which has a capacity of 50,000 barrels per day, has been adversely affected due to the use of alternative crude sources.
Last month, the head of the state-owned Ceylon Petroleum Corporation (CPC) indicated that the CPC has ordered West Texas Intermediate (WTI) crude due to difficulties in obtaining Murban crude. They have also made adjustments to the refinery operations to effectively manage the ongoing crisis. (Colombo/April 17/2026)
