Sri Lanka and Russian Oil

https://www.reuters.com/markets/europe/sri-lanka-is-open-buying-russian-oil-pm-tells-ap-2022-06-12/

As a country in a state of turmoil and caught between political and financial forces based both in China and the West, Colombo is looking for other options. And for obvious reasons Moscow is also looking for new markets. While the Russian oil industry has jumped through numerous hoops and played games with pricing to keep their markets open, the possibility of new markets must be appealing for those in Russia.

However, there are dangers of a Sri Lankan default – as indeed Colombo has already defaulted on its international loans. And given the volatility of the political situation, there is additional risk. A new administration might reverse course and under pressure from the West default on its payments to Moscow. In fact such a write off might be made a condition for refinancing with the IMF. It's hard to say, but the episode reveals just how desperate Sri Lanka is and how dire the economic situation has become. With already punishing inflation and shortages of consumer goods, food, and gas used for things like cooking, the possibility of the nation running out of oil (and thus petrol) could mean a national economic collapse – which would likely lead to a political implosion. Sri Lanka is in big trouble but as Beijing and Washington circle like vultures, there are other social and political forces at work within Sri Lanka itself and in neighbouring India. Everyone is watching and waiting.

Working with Russia will mean trouble for Sri Lanka. The West will turn against it and so this too becomes a test. If Sri Lanka decides to throw caution to the wind and deal with Moscow in a bid to keep its economy going – and this despite Western threats, it may open up a new chapter. Might we see other small nations doing the same? Some nations can see that while Russia and China are accused of playing manipulative games with energy and trade, the West is no less guilty. Sri Lanka is on the ropes and yet Western finance wants its money and is perfectly happy to impose austerity measures leading to starvation and suffering – in order for Western financial institutions to get paid. Remember that as you sit next to people in the pew, as not a few of them are profiting off the suffering of these people and others.

But instead of bowing to the Western devil, they opt to do business with another one – found in Moscow. Either way they know they're going to be used and manipulated. Russia is perhaps the best choice because they too are in a desperate situation and are willing to sell the oil at a discounted rate – even with Sri Lanka's shattered credit rating.

But of course the oil has to get to Sri Lanka. That too is an increasingly difficult proposition and one of growing controversy as the US and EU attempt to tighten the restrictions and the nature of the sanctions regime. The latest move has been an attempt to block insurance for ships carrying Russian cargoes and there will be more to come.