Tensions between Turkey and the United States show no signs of abating, as a top Turkish official declared that the United States’ demands to stop trading oil with Iran would go unheeded by Ankara.
The country’s Economy Minister Nihat Zeybekci told a press conference June 27, “The decisions taken by the United States on this issue are not binding for us,” adding that Turkey would only fall in line behind a United Nations resolution to the same effect. “We recognize no other [country’s] interests other than our own,” he said. Zeybekci’s comments followed the Donald Trump administration’s announcement yesterday that it will impose sanctions against all importers of Iranian oil by Nov. 4. Iran remains Turkey’s biggest source of crude oil imports, accounting for nearly half of its foreign supply in the first quarter of this year, the state-run Anadolu news agency reported.
Turkey’s economy is looking increasingly shaky with the Turkish lira shedding around one-fifth of its value against the greenback since the start of the year. The increase in oil prices triggered by the US threat of sanctions will add to the financial burden, and Turkey and Iran will undoubtedly seek ways to continue trading, as it serves both sides. Iran is experiencing its own share of economic woes, sharpened by Washington’s withdrawal from the Iran nuclear deal and its decision to reimpose sanctions. Tehran has been racked by protests over the past week over the dizzying decline in the value of its national currency. They were the biggest demonstrations in recent years, multiple news outlets have reported.
Iranian President Hassan Rouhani was among the first world leaders to congratulate his Turkish counterpart Recep Tayyip Erdogan for his victory in the June 24 presidential polls.
According to the official website of the Iranian president, Rouhani told Erdogan, “The holding of glorious elections in Turkey in full peace and security is a pleasure for the Iranian nation and government. … The people of Turkey showed the world that they are able to implement and display democracy at its best in an Islamic country.”
Turkey has gotten around US sanctions against Iran in the past, but it faces far greater scrutiny since a massive sanctions-busting scheme was uncovered by the US Treasury, resulting in the arrests of Iranian-Turkish gold trader Reza Zarrab, who cooperated with the authorities, and Mehmet Hakan Atilla, a top executive of the state-owned Turkish Halkbank. The Turkish official, who claimed innocence, was sentenced in May to 32 months in prison by a federal district court in Manhattan for his role in the scheme. The US government alleged that Halkbank had laundered billions of dollars’ worth of Iranian oil earnings, creating a slush fund for Iran’s clerical regime to use at its will.
Ankara is waiting with bated breath as the US Treasury ponders an expected multibillion-dollar fine it's likely to slap on the Turkish state lender. Its scale will in turn determine the effects on Turkey’s banking sector at a time when large Turkish companies are struggling to repay their corporate loans.
Paradoxically, the looming quarrel over sanctions coincides with a concerted effort by the Trump administration to repair ties with Turkey, whose support is seen as critical to its policy of countering Iran. Erdogan, who was re-elected for another five-year term with vastly expanded powers, is keen to reset relations with Washington but on his own terms. They include a halt to the Pentagon’s ongoing partnership with Syrian Kurdish militants in northern Syria and bringing greater pressure to bear on the Pennsylvania-based Sunni preacher-cum-businessman Fethullah Gulen, who is blamed for the violent attempt to overthrow Erdogan in July 2016.