ECONOMYNEXT  – Sri Lanka, which is dependent on Iranian light crude has sought advice from India on its strategy on purchasing oil from the country in the light of tightening US sanctions during bilateral talks.

Sri Lanka’s Petroleum Minister Arjuna Ranatunga has sought information on how India will act in the case of tighter sanctions from Indian External Affairs Minister Sushma Swaraj, a statement from the office of the Prime Minister Ranil Wickremesinghe who is leading a delegation said.

The US has unilaterally broken out of with Iran on de-nuclearization struck with broad support, which the EU is still backing.  But the US has bullied firms in the EU into accepting its stance using its economic powers.

Sri Lanka is also dependent on US dollar clearing to maintain its international payments.

Swaraj had explained India’s strategy on India and has said Sri Lanka could also follow the process and promised further information.

India is a big buyer of Iranian oil.

India along with Sri Lanka is part of a the Asian Clearing Union, a kind of net settlement system set up by a group of countries with central banks with inconsistent policy that operates failing soft-pegs with the US dollar and therefore have persistent foreign exchange shortages .

Sri Lanka’s ageing state-run refinery, originally built by the Soviet Union, works best with Iranian light crude, with other heavier crudes not generating enough light distillates. (Colombo/Oct21/2018)