Crude Block

Dec 10, 2012 (LBO) - Sri Lanka is unable to import crude oil from Iran despite a sanctions waiver by the United States, because banks are wary of opening letters of credit fearing blacklisting, a media report said. Sri Lanka's The Sunday Times newspaper said state-run Ceylon Petroleum Corporatio, which used to buy Iranian light crude had not imported oil from Iran since June as banks feared opening letters of credit and insurers refused to provide cover.

The reported quoted Ceylon Petroleum Corporation managing director Susantha Silva as saying that he had requested US diplomats to facilitate the transactions by giving an assurance that banks and insurance firms will not be penalized.

On Friday, US had waivers to major Asian petroleum consumers for reducing their imports of Iranian oil and Sri Lanka was among twenty countries permitted to buy Iranian crude in limited quantities.

Sri Lanka used to import about 12 shipments of Iranian crude a year, it 2011 it was cut to 09.

State-run People's Bank and Bank of Ceylon feared opening letters of credit despite the waiver.

"It is understandable from their perspective because Sri Lanka’s economy would come to a standstill if they were bla