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Turkey stays loyal to Tehran, does not plan to cut oil imports

Turkey stays loyal to Tehran, does not plan to cut oil imports
Turkey has no plans to consider alternative oil suppliers, and will continue to import fuel from Iran. Ankara officials disapprove of the EU and US embargo against Tehran, which they see as ‘Western economic bullying.’

Ankara will remain a rare loyal customer of Tehran “unless the UN endorses the EU and US oil embargo," Turkish and Saudi sources told Reuters. The prospects of United Nations supporting the oil embargo seem improbable as Russia and China, who have a veto power, insist on peaceful resolution of the conflict. China is also being the largest buyer of Iranian crude.

Turkey’s loyalty will help Iran to avoid major losses from reduced sales of crude after the European Union banned Iranian oil imports from July 2012. Major Asian customers are likely to follow under pressure from Washington.

The decision came after a Turkish delegation travelled to the Saudi capital Riyadh over the weekend and decided against requesting additional supplies from the country. Saudi Arabia is the only producer in the world with spare volume on offer to replace Iranian production.

In January, the two largest buyers of Iranian oil, China and India, have also tried to protect themselves from US sanctions targeting countries that trade with Iran. India has confirmed it is going to pay for Iranian oil with gold, not dollars, and China might follow that example one way or another.

India and China needed to switch from the dollar in bilateral trade, since the US and EU have issued unilateral sanctions against the Iranian oil industry and financial institutions. The sanctions would ban any bank involved in oil trading with Iran from dealing with American and European counterparts.

Meanwhile, in a bid to bypass economic restrictions Iran has turned to bartering, trading gold bullion and oil for vital food imports, reports Reuters. New financial sanctions have hurt Tehran’s ability to import basic staples for its population of 74 million, commodities traders said.

The EU adopted the oil embargo on January 23. It immediately banned new oil deals with Iran and implemented a total boycott of Iranian oil from July 2012. The EU embargo followed tough US sanctions approved earlier last month. Taken together, they remove 2.6 million barrels of oil from international markets.

Western leaders insist Iran is on a dangerous path towards acquiring nuclear weapons and demand it halts its program. Tehran consistently denies such ambitions, saying its nuclear intentions are civilian, not military.