The United States denied on Friday that it had any agreement with Sri Lanka to allow Colombo to import Iranian crude oil through third parties, avoiding Western sanctions aimed at curbing Iran's nuclear program.
"We categorically deny there was any agreement," a spokesman at the U.S. Embassy in Colombo told Reuters.
Sri Lanka's Media Minister and government spokesman Keheliya Rambukwella told reporters late on Thursday that Sri Lanka has been buying Iranian crude from various countries via third parties, and avoiding sanctions - with the understanding of the United States.
"For instance, Malaysia supplied what happened to be Iranian oil. It's a very closed secret," Rambukwella said during a briefing on the expansion of Sri Lanka's shipping fleet. "But we have had some understanding with the U.S. as well."
"I know the gravity of it. I know it's a serious statement," he said when asked if he was aware of the possible implications of what he was saying. He did not elaborate on the nature of the understanding between Sri Lanka and the U.S. government.
"Iran was supplying to 'X' place under a different name and from there to other places. Wherever there are sanctions, third parties are involved," Rambukwella added.
Asked how many cargoes of Iranian crude Sri Lanka had obtained through third parties, Rambukwella said, "I have no idea, but it was time to time. At the end of the day, you get the oil, and our refinery is meant for Iranian crude. They have a sulfur problem and other issues."
In a statement, Sri Lanka's External Affairs Ministry "categorically" rejected the contents of a Reuters article reporting Rambukwella's comments on Sri Lanka evading U.S. sanctions against Iran, saying it was "wholly incorrect and devoid of any truth."
A spokesman for Malaysian state oil firm Petronas [PETR.UL] declined to comment. A Petronas source, who didn't want to be named because of the sensitivity of the issue, said the company had been told by the Prime Minister's office not to deal in any business related to Iran. Malaysia stopped buying Iranian oil when Western sanctions were put in place in early 2012. (Reuters)