May 03 2019

Turkey cannot reduce reliance on Iran oil quickly - foreign minister

Turkey cannot reduce its reliance on Iranian crude and diversify its oil imports in a short time, Turkish Foreign Minister Mevlüt Çavuşoğlu said on Thursday, a day after a U.S.-imposed deadline ending a sanctions waiver passed, Reuters reported

U.S. President Donald Trump announced last month that Washington would not renew waivers granted last year to eight countries that buy Iranian oil, including Turkey. Washington demanded that buyers stop purchases by May 1 or face sanctions.

Turkey’s trade volume with neighbouring Iran amounts to around $9 billion, including large quantities of imported Iranian raw petroleum materials and natural gas. Trump’s decision could pressure Turkey’s inflation rate, which fell to an annual 19.5 percent in April from 19.7 percent the previous month, as Turkey is almost completely reliant on imports to meet its energy needs.

Çavuşoğlu said Turkey’s refineries were not suited to handling oil from some other countries. Despite this, Ankara has reduced its oil imports from Iran by an average of 209,000 tonnes per month in the four months after the imposition of sanctions in November from an average of 912,000 tonnes per month until May 2018, according to Reuters’ calculations. 

“It does not seem possible for us to diversify the sources of the oil we import in a short time,” Reuters quoted Çavuşoğlu as saying during a news conference in Ankara. “We have to renew the technology of our refineries when we buy oil from third countries. That would mean the refineries remaining shut for some time. This, of course, has a cost.”

The fact that Turkey cut back its oil imports from Iran last year shows Turkey in fact has a variety of options and what Turkey tries to avoid is damaging its alliances with Russia and Iran in Syria by siding with Trump administration against Iran, said analyst Dimitar Bechev last week.

https://www.reuters.com/article/us-usa-iran-oil-turkey/turkey-says-cannot-quickly-abandon-iranian-oil-as-u-s-waivers-end-idUSKCN1S80WT