Tuesday, July 24, 2018

Sri Lanka Will Pay Its Oil Debt To Iran With Tea

As far as SL's big neighbor goes I think Iraq is still India's largest supplier with Iran now in second place.
If United Nations sanctions on Iran are enforced, things could get interesting fast.*

From OilPrice:
Sri Lanka will pay down its oil debt held by Iran with tea in response to new regulations that Sri Lanka has issued in order to comply with a UN Security Council Resolution.

The UN resolution calls for the imposition of sanctions on Iran for failing to stop its uranium enrichment program, and restricts financial transactions with Iran. In response to these restrictions, Sri Lanka is hoping to pay Iran in tea—a year’s worth of it.

Sri Lanka’s Ceylon Petroleum Corporation (CPC), Sri Lanka’s state-owned oil and gas company, owes Iran about $250 million for oil shipments in recent months. But restrictions on payments limits CPC’s options on how to pay for the oil. The Sri Lanka Tea Board proposed a solution: compensate Iran with tea instead of dollars.

The proposal would have the CPC pay for the tea, then the tea would be shipped to Iran.

“If the CPC pays us, we can continue the export of tea to Iran as there is no ban on this commodity. The amount the CPC owes Iran can offset payment for a year of tea export to Iran,” Tea Board Chairman Lucille Wijewardena said, adding that there would be more discussions on the subject in the coming week....

Back to India, for some reason no one wants to build an oil pipeline from Iran, across Afghanistan or Pakistan, to India. Go figure.
There is an Iran-Pakistan gas pipeline being built but now India thinks it might be more secure if the route was under the ocean rather than transiting their neighbor to the west. 

*See for example:
Dec. 2017
"The New Great Game moves from Asia-Pacific to Indo-Pacific"

November 2010
India Orders Firms to "Scour the Earth" for Energy Supplies as President Obama Heads Over
The Chinese approach works best if you have a blue water navy.
The Indian's currently have one aircraft carrier, the Viraat. Back in 2001 the Chinese bought a Soviet carrier from Ukraine for $20 mil. and said they were going to turn it into a, aahhh, casino, yeah that's the ticket. They've since started work on two more.
I have a hunch that American schoolkids today will be hearing a lot about the Indian Ocean before they graduate and might even be able to find it on a map.*
*I mean come on, just look at the land masses that border it:
Map of Indian Ocean
May 2012
February 2014
Indian Ocean Geopolitics: China Goes to the Maldives
January 2015 
"Is China Moving to Control the Indian Ocean?"
April 2015
"China’s Grand Plan for Pakistan’s Infrastructure"

Somehow related:
The Softer Side Of Clausewitz