Like its Asian peers India and China, Sri Lanka has purchased around two-thirds of its oil from Russia since May this year to ease difficulties faced by millions over the fuel crisis.
Citing data from the analytic firm Refinitiv, The Financial Times reported that Russia has accounted for 2.6 million barrels since May, which is about 79 percent of the total oil purchased.
According to research firm Kpler, it is the first time Sri Lanka has imported Russian oil since at least 2013.
It is not clear, however, whether these purchases were made under a government-to-government deal or sourced from traders.
Neil Crosby, a senior oil analyst at OilX quoted by the Financial Times, said that Sri Lanka was “a bellwether of what we can expect poorer nations to look to be doing over the next few months.”
“They’re trying to reduce their import costs, they’re under financing pressure and in that context, Russian barrels look very tempting,” Crosby added.
The island nation of 22 million people ran out of fuel in May-June due to the foreign exchange crisis. President Ranil Wickremesinghe stated that due to ongoing geopolitical tensions, oil is not available in the international market even if one possesses cash.
In June-July, the Sri Lankan government introduced fuel rationing and closed down offices and schools to curb long queues outside fuel stations, resulting in law-and-order situations in Colombo.
The island nation announced a default on its external debt for an interim period in mid-April, pending a restructuring of the obligations under an IMF-supported economic adjustment program.