Turkey making steep Iran oil import cuts to avoid Western sanctions

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A worker checks the valve gears in a natural-gas control centre of Turkey's Petroleum and Pipeline Corporation, 35 km west of Ankara. Photo - Umit Bektas/Reuters

Reports coming from Turkey suggest it has steeply cut oil imports from Iran in May and June in order to avoid US sanctions. The Anatolian nation’s official trade data showed stubbornly high imports in April.

Analysts believe Ankara’s decision to reduce imports from its eastern neighbour will add pressure on Tehran which is seeking new markets to sell oil as US-led sanctions bite its hydrocarbon industry.

Oil experts say Iran is coming under increasing pressure as sharp drop in crude prices in May below $100 a barrel significantly reduce Tehran’s oil income.

The European Union’s total ban on imports of Iranian oil come into effect from 1 July.

Turkey, the world’s fifth largest buyer of Iranian oil, announced to reduce imports from the Islamic Republic in March by 20%. Iran’s Asian customers such as Japan and South Korea have also taken similar measures.

Turkey’s only crude buyer, refiner Tupras, has a term contract with Iran that expires in August allowing it to lift 180,000 bpd.

According to Ankara’s official trade data, Turkey bought an unusually high 270,000 bpd of Iranian crude in March and fresh data for April showed imports at 249,000 bpd.

A source at Tupras insisted volumes have in fact been much smaller as April data included some purchases made in March.

The source told Reuters that April imports have been just 107,000 bpd and 142,000 bpd in May if counted by loading dates.

“The plan for June is the same – 142,000 bpd,” the source said, adding Tupras planned to keep its imports at around 80% of contracted volumes after July.

“We are abiding by our declaration from the end of March. We’re aiming to continue in July in line with June,” he said.

Turkey will become the sole buyer of Iranian crude in Europe as most European refiners have gradually stopped lifting Iranian crude ahead of the EU embargo effective from July.

Trade data compiled by Reuters showed EU imports of Iranian crude fell to around 350,000 bpd in April from over 700,000 bpd last year.

According to the US Energy Information Administration, Turkey accounted for 7% of the Islamic Republic’s crude oil exports in 2011.

Ankara’s official trade data shows that Turkey got about 58% of its nearly 6 million tonnes in crude supplies from Iran during the first four months of this year.

In 2011, Iran provided more than half of Turkey’s total crude imports at just over 18 million tonnes.

Iraq, its second biggest supplier, trailed far behind with 743,537 tonnes, or 45,000 bpd in the first four months.

Other suppliers were Libya, Nigeria, Saudi Arabia, Russia, Azerbaijan and Kazakhstan.

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