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Sri Lanka and Iran Explore Expanding Oil Trade Amidst U.S. Sanctions Challenges

Sri Lanka and Iran are reportedly considering the prospect of expanding their oil trade, bypassing U.S. sanctions that have posed significant challenges for Iran’s trade activities. The information comes from a reliable source indicating that Iranian Foreign Affairs Minister Hossein Amir Abdollahian, during his visit to Sri Lanka, engaged in discussions with Sri Lankan leaders on this matter.

The discussions revealed that Iran, grappling with the impact of the “toughest ever” U.S. sanctions imposed over the nuclear deal, has encountered difficulties in trading goods. The source familiar with the talks shared that while some oil transactions currently occur through third parties, both nations have decided to explore the potential expansion of trade despite the U.S. sanctions.

This move follows Sri Lanka’s initiative to barter tea to Iran in 2023 in lieu of $250 million owed for previously purchased oil. The source provided an update on the progress of this transaction, stating that it is well underway. Additionally, the two countries had previously agreed on the necessity for their Central Banks to establish contact to work out the necessary modalities, although specific details on this aspect were not disclosed.

The Iranian Foreign Minister’s visit, taking place from February 19 to 21 upon an invitation from Sri Lanka’s Minister of Foreign Affairs, Ali Sabry, signifies ongoing diplomatic efforts between the two nations in navigating challenges posed by international sanctions.

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