By Mark Ford

Sri Lanka has arranged letters of credit (L/Cs) to purchase oil from Oman and Saudi Arabia, according to petroleum industries minister, Susil Premajayantha.

This marks a change in suppliers, as the country has historically bought crude oil from Iran until international sanctions substantially closed opportunities for it, and buyers worldwide, to purchase Iranian crude on L/C terms.

Refinery closure

The move will stave off an anticipated fuel shortage due to the closure of Sri Lanka's Sapugaskanda refinery, which halted operations in late October due to the unavailability of Iranian crude.

The refinery is now expected to resume operations, probably from mid-November after the expected arrival of a ship carrying 80,000 tonnes of Omani crude, which is due to arrive on 10 November 2012.

Iranian offer

The minister says that more shipments of oil are subsequently due from Oman and Saudi Arabia.

Iran meanwhile has reportedly offered Sri Lanka a deal under which it may be able to supply Iranian crude to Sri Lanka on a non-L/C basis.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.