Despite US Sanctions Threat, Iranian Oil Still Flows to Turkey

Article Summary
Turkish Energy and Natural Resources Minister Taner Yidiz has signalled that Turkey does not intend to reduce its imports of Iranian oil until a viable substitute is found, and that it will honor the rest of its contract with Iran. It is thus not yet on the list of countries exempt from the US financial sanctions for supporting Iran’s oil industry.

Turkish Energy and Natural Resources Minister Taner Yildiz said that Turkey will continue to buy Iranian crude oil until alternative sources are found. He said that Turkey is the largest importer of  Iranian oil, with 9 million tons annually. This a considerably higher figure that used by other heavy-consumer countries as India, China and South Korea. “The security of our supply is vital. Companies are continuing with their negotiations. It would be wrong of us to say we will increase our imports from here, decrease from there, before we can ensure our supply,” said the Minister.

“Our priority is to procure oil. We are maintaining contacts with countries like Saudi Arabia and Libya to diversify our sources. It is normal for us to increase our natural-gas suppliers from 6 or 7 countries to up to 15 countries, for crude oil,” he added.

Turkey will continue to buy Iranian oil until the end of the current contract, and there is no intention to terminate the contract until substitutes are found, he added.

Yildiz noted that contacts are ongoing with Venezuela, where Turkey may undertake housing projects as payment for oil.

The US is playing the financial sanctions card, and Turkey is not exempt.

The European Union, which is preparing to commence its oil embargo on July 1 [2012], is already reducing its Iranian imports. The US has acknowledged the decisions of 10 EU countries as well as Japan to substantially reduce their oil imports from Iran, and has granted them an exemption from financial sanctions.

Along with Turkey, large-scale oil consumers such as China, India and South Korea are not on the US list of exemptions. Banks of  the privileged countries will not face any sanctions, which could include measures such as being excluded from the US financial system, for six months. The US expects those countries wanting an exemption to substantially reduce their oil imports from Iran in the near future.

When asked about the US decision, Minister of Energy Yildiz said, “The fact that Turkey is not on the list doesn’t mean that it won’t be; negotiations continue at company levels.”

Prime Minister Recep Tayyip Erdogan is expected to discuss the issue with President Obama when they meet in South Korea next week.

Turkey gets most of its oil from Iran. According to a tally of dependence on Iranian oil, Turkey leads with 30.6%, followed by South Africa with 25%, Greece with 22.6% and Italy with 13.5%.

The countries which will be exempt from US financial sanctions are: Japan, France, Germany, Belgium, Britain, Greece, Italy, Holland, Poland, Spain and the Czech Republic.

Found in: oil

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