Sri Lanka may have purchased oil at around $286 per barrel amid the Middle East conflict, according to HSBC Chief Executive Georges Elhedery, who highlighted that actual oil costs in Asia can be significantly higher than Brent crude benchmarks due to added expenses such as insurance, shipping, and supply shortages.
According to a report by Middle East Eye, Elhedery made the remarks at an investment forum in Hong Kong on Tuesday, noting that global benchmark prices often fail to reflect real costs faced by Asian buyers.
He said that while headline oil prices may be above $100 or $110 per barrel, the effective cost of sourcing oil from the Middle East could rise to $140 or $150. He added that the highest figure he had heard was $286 per barrel in Sri Lanka.
The price disparity is attributed to disruptions caused by the ongoing U.S.–Israeli conflict with Iran, which has affected global energy flows and restricted movement through key shipping routes such as the Strait of Hormuz.
Iran has reportedly taken control of the Strait of Hormuz, limiting Gulf exports, while the United States has imposed counter-blockades on Iranian oil shipments, further tightening global supply.
Saudi Arabia has become the region’s leading exporter, shipping around five million barrels per day through its Red Sea port of Yanbu. However, even regional benchmarks such as Oman crude, trading at around $100 per barrel, do not fully capture the additional costs borne by Asian importers.
Shipping costs have risen sharply, with Red Sea freight adding an estimated $30–40 per barrel, while insurance premiums have increased from 0.25% to 5%.
The situation has left countries like Sri Lanka exposed to severe price pressures, highlighting the vulnerability of smaller economies to geopolitical energy shocks.
Iran has also warned of possible further disruptions, including threats to close key maritime routes unless U.S. sanctions and blockades are lifted, raising concerns over continued instability in global oil supply chains.
