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Initially Defiant Turkey Complies With U.S. Sanctions On Iranian Oil

Despite criticizing the U.S. decision not to extend any sanction waivers for Iranian oil customers, Turkey appears to be fully complying with the U.S. sanctions on Iran’s oil, Reuters reported on Tuesday, citing tanker tracking data.

Turkey was one of the eight buyers of Iranian oil that were given an initial six-month waiver to continue importing crude from Iran at reduced volumes after the U.S. slapped back sanctions on Iran in November last year. Under its ‘maximum pressure’ campaign against Iran, the U.S. ended all waivers for all Iranian customers as of early May.

On the day on which the U.S. announced that it was not extending any exemptions to any Iranian oil buyer, Turkey’s Foreign Minister Mevlut Cavusoglu tweeted:

“The US decision to end sanctions waivers on Iran oil imports will not serve regional peace and stability, yet will harm Iranian people. Turkey rejects unilateral sanctions and impositions on how to conduct relations with neighbors.”

Earlier this month, Cavusoglu said that Turkey will not be able to “quickly” source oil from alternate sources after the end of the U.S. waivers.  

“It does not seem possible for us to diversify the sources of the oil we import in a short time,” Cavusoglu said.

Turkey’s refineries, according to the minister, are not equipped to process crude oil from just any other country, and would therefore require retooling—something that is not only time intensive but costly.

Related: War With Iran Could Send Oil To $250

However, so far in May—the first month in which the U.S. doesn’t allow any sanction waivers on Iran’s oil—no tanker loaded in Iran has arrived at a Turkish port, according to Refinitiv tanker tracking data cited by Reuters.

Turkey’s biggest refiner Tupras had tried to negotiate a waiver before the end of the previous exemptions, but it wasn’t granted such and made it clear it wouldn’t import oil from Iran, a source familiar with the negotiations told Reuters.

Before the U.S. withdrawal from the Iran nuclear deal in May of 2018, Turkey was importing nearly half—or 47 percent—of its crude from Iran, according to Reuters data.

Subsequently, Turkey had reduced its imports from Iran and has started to buy more oil from Russia, Kazakhstan, and Iraq, to replace Iranian barrels, according to analysts.  

By Tsvetana Paraskova for Oilprice.com

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  • Mitch Farney on May 21 2019 said:
    Kurdistan oil flows via pipeline thru southern Turkey for export, and Kazakhstan oil from the east, both ending at the same export facility at Cehyan... seems logical they would regularly purchase and refine those 2 types. And plenty of Iraqi shared fields with Iran.

    What about pipeline gas form Iran?
  • Mamdouh Salameh on May 21 2019 said:
    Turkey doesn’t recognize US sanctions and therefore it will not stop buying Iranian crude now or in the future.

    The claim by Refinitiv tanker tracking cited by Reuters that no tanker loaded in Iran has arrived so far in May at a Turkish port is not a proof that Turkey is not buying Iranian crude. Ghost tankers carrying Iranian crude could easily offload crude at Turkish ports without being recognized as originating in Iran.

    Furthermore, Iran could send its oil exports to Turkey by land across the border between them. Alternatively, Russia could supply Turkey with oil on behalf of Iran from its Black Sea terminals and take an equivalent amount of Iranian oil under the barter trade agreement between them. I

    Russia has every incentive to undermine US sanctions on Iran in retaliation for US sanctions against it.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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