By Easwaran Rutnam Sri Lanka was bracing for the fallout from the tensions in the Middle East after the US and Iran launched what some termed a shadow war last week. The Government said that it was closely monitoring the developments in the Middle East and analysing the possible repercussions on Sri Lanka. Iran is one of the biggest markets for Sri Lankan tea and there are fears fresh US sanctions will have an impact on Sri Lankan tea exports. “Iran was one of the biggest markets for Sri Lankan tea. So this may have a big impact on our tea business. But it’s still too early to say anything,” Government Spokesman Minister Keheliya Rambukwella told The Sunday Morning. Iran had imported an estimated 23.9 million kilograms of Ceylon Tea worth $ 129 million in 2018. Sri Lanka and Iran were also in talks over a tea for fuel repayment barter deal. Once finalised, the deal was to see Sri Lankan export tea repay liabilities valued at approximately $ 240 million for oil imports from Iran. Minister of Plantation Industries and Export Agriculture Dr. Ramesh Pathirana told The Sunday Morning that if the crisis escalates, Sri Lanka may need to look at alternative methods of transferring money to Iran. “There were some issues on financial dealings with Iran even before the latest conflict erupted. We were discussing the barter system to give tea as a payment for oil. But nothing had been finalised,” Dr. Pathirana said. He said that while the crisis in the Middle East had not yet had a major impact on Sri Lanka, the country was closely monitoring the developments. “So far, we have not encountered a significant issue,” he said. In an official statement, the Sri Lankan Government had last week noted it was deeply concerned about the growing tensions in the Middle East following the assassination of a senior Iranian leader. Sri Lanka urged all parties to act with utmost restraint and maintain peace and security through constructive dialogue in order to de-escalate the threat to the stability of the region. Tensions arose in the Middle East after the US killed Iranian General Qasem Soleimani in Baghdad. Following the killing, Iran had declared that it will no longer abide by any of the restrictions imposed by a 2015 nuclear deal. In a statement, it said it would no longer observe limitations on its capacity for enrichment, the level of enrichment, the stock of enriched material, or research and development. Later, Iran fired more than a dozen ballistic missiles at bases in Iraq housing US and coalition forces. No one was killed. On Wednesday (8), the US announced it will immediately impose additional punishing economic sanctions on the Iranian regime. US President Donald Trump said that the powerful sanctions will remain until Iran changes its behaviour. Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo said in a joint news conference on Friday that the new measures would target eight senior Iranian officials involved in "destabilising" activities in the Middle East, as well as Tuesday's missile attack. Among the senior Iranian officials targeted in the new measures were the Secretary of Iran's Supreme National Security Council Ali Shamkhani, the Iranian Armed Forces Deputy Chief of Staff Mohammad Reza Ashtiani, and Gholamreza Soleimani, the Head of the Basij militia, a volunteer force loyal to the Iranian Government. Mnuchin said US President Donald Trump would issue an executive order imposing sanctions on anyone involved in the Iranian textile, construction, manufacturing or mining sectors. Separate sanctions would also be imposed against the steel and iron sectors, he said. “The US has not made clear what the sanctions will be. We already have an issue where we had to make alternative arrangements for oil which we were obtaining from Iran because of the sanctions. Right now, it is hard to make a proper assessment as to how the latest developments will affect us,” Rambukwella said. However, the Minister admitted that the situation in the Middle East did look rather precarious. As tensions grow, all international airlines, including SriLankan Airlines, took steps to change its flight routes and avoid Iran and Iraqi airspace. SL citizens’ safety Some countries also began to order the evacuation of its citizens from Iran but Sri Lanka said that there was no immediate need to evacuate any Sri Lankans from Iran. When asked if there was a move to evacuate Sri Lankans or Sri Lankan staff at the Embassy in Iran, Foreign Secretary Ravinatha Aryasinha responded in the negative. Sri Lanka’s Embassy in Iran is operating without an ambassador at the moment as the Ambassador is among several recalled by the new Government. When contacted by The Sunday Morning, an official at the Sri Lankan Embassy in Iran said that the environment in the capital was calm. “There is no issue here. We are operating as usual and we have not been asked to return to Colombo,” the official said. The official said there are about 43 Sri Lankans in Iran and all of them were safe. The official further noted that the Embassy was in close touch with the Sri Lankans in Iran as well as the Foreign Ministry in Colombo. Just recently, Iran had called for improved bilateral relations with Sri Lanka, including defence ties. Iranian Ambassador to Sri Lanka Mohammad Zaeri Amirani called for improved bilateral co-operation and friendship between Iran and Sri Lanka when he called on Defence Secretary Maj. Gen. (Retd.) Kamal Gunaratne at his office earlier this month. Ambassador Amirani had briefed the Defence Secretary on the present political situation in his country and informed him about training opportunities that could be offered to the Sri Lankan Police and armed forces personnel in Iran. While thanking the Iranian Ambassadors’ gesture of goodwill, Maj.Gen. Gunaratne had said that he was looking forward to improving bilateral relations with Iran.