Shunned by US, Turkey looks for alternative oil

ANKARA - Hürriyet Daily News

An Iranian oil worker repairs a pipe at an oil refinery in Tehran in this file photo. US says 10 European countries and Japan are exempted from economic sanctions on Iran, praising them for already having reduced dependency on oil from the Islamic republic. AP photo

Turkey is in talks with Saudi Arabia and Libya to buy oil in a bid to diversify supplies, Turkish Energy Minister Taner Yıldız has said, stressing that Ankara would continue to seek exemption from U.S. sanctions on Iran.

“Turkey’s absence from the U.S.’s waiver list regarding the Iran issue doesn’t mean it will not be included,” Yıldız told reporters yesterday. “Those talks are carried out on the level of companies,” he added.

Stressing that Turkey’s security of supply was an important issue; the minister said they would not halt purchasing crude oil from Iran unless other suppliers were lined up.

“It is not appropriate to comment if the purchase of oil from Iran will increase or decrease. Primarily, we have to replace the supply,” he said. Yıldız, who met with Saudi Deputy Oil Minister Bin Salman yesterday, said Turkey was having talks with Libya and Saudi Arabia to replace its Iranian energy supply.

Among the big consumer countries such as India, China and South Korea, Turkey was the only country purchasing 9 million tons of oil from Iran, Yıldız said.

US exemptions

The U.S. exempted 10 European Union countries and Japan from economic sanctions on March 20, praising them for already having reduced dependency on oil from Iran. U.S. Secretary of State Clinton announced on March 20 that the 10 EU countries currently importing Iranian oil had “significantly reduced their volume of crude oil purchases from Iran. As a result, I will report to the Congress that sanctions … will not apply to the financial institutions based in these countries.”

The decision also means banks in the 11 countries have been given a six-month reprieve from the threat of being cut off from the U.S. financial system, under new sanctions designed to pressure Iran over its nuclear program, which the West suspects is intended to produce weapons.

South Korea and Turkey are among the top 10 consumers of Iranian oil. Japan, China and India combined buy close to half of Iran’s crude exports of 2.6 million barrels a day.

Turkey imports nearly 200,000 barrels of oil per day from Iran. Turkey’s sole refiner Tüpras, a unit of Koç Holding, is the main customer for Iranian crude, buying 30 percent of its crude oil from Iran through a 9 million ton annual purchase contract. Koç Energy Group Chairman Erol Memioğlu told reporters last month that Tupraş’s existing oil contract with Iran ended in August.

Prime Minister Tayyip Erdoğan plans to discuss the issue with U.S. President Barack Obama during the nuclear security summit in South Korea on March 26. It is also set to be a key issue of the talks in Tehran during Erdoğan’s visit to the country on March 28-29. Turkey has refused to join U.S. and EU sanctions against Iran, which include a ban on oil imports, saying it is only bound by U.N. Security Council measures, not unilateral decisions.