Tea-for-Oil Deal: Sri Lanka Pays $55 Million of $251 Million Debt to Iran
Posted on July 18th, 2024
Courtesy IranWire
Sri Lanka has made progress in paying its oil debt to Iran through a tea-for-oil agreement, Sri Lanka’s Tea Board Chairman Niraj De Mel said.
De Mel reported that the country has paid $55 million out of its $250.9 million debt for oil purchases from Iran through tea exports.
The debt payment process began in August last year, following an agreement between the two countries.
In the first four months of this year, Sri Lanka has exported 4.1 million kilograms of tea to Iran, tripling the amount exported during the same period in 2023.
The arrangement, agreed upon in December 2021, allows Iran to accept Sri Lanka’s tea as payment for the outstanding oil debt.
The agreement has roots in oil purchases made by Sri Lanka from Iran nine years ago, which had remained unpaid due to international sanctions against Iran.
Alireza Peyman Pak, head of the Iran Trade Development Organization, previously confirmed the signing of a contract for monthly tea exports from Sri Lanka to Iran to settle the $251 million debt.