Turkey ups Iran oil imports in March before embargo

DUBAI - Reuters

Turkey’s oil refiner Tüpraş boosted exports from Iran in March , figures show.

Turkey’s crude oil imports from Iran rose sharply in March, providing the Islamic republic with much-needed oil revenues as Tehran struggles to sell its crude in the face of tightening Western sanctions aimed at slowing its nuclear program.

Turkey imported 1.174 million tonnes, about 270,000 barrels per day, of Iranian crude oil in March, according to official trade data on the Turkish Statistical Institute web site, obtained by Reuters following a request.

A Turkish industry official said April imports fell back to a more normal 140,000 bpd and would remain at about the same level in May.

The March figures represent the highest monthly purchase of Iranian crude by Turkey since July 2011 and are almost triple the 401,349 tonnes, 100,000 bpd, imported in February. The imports also reflect a 90 percent jump from March 2011.

But Turkish analysts say Turkey’s sole refiner and biggest crude importer Tüpraş was likely to stand by its end-March pledge to cut Iranian imports by up to a fifth.

“This looks like a last attempt to stockpile Iranian crude before cutting down,” analyst Cüneyt Kazokoğlu at FG Energy in London said.

“Peak season for Turkish crude imports is traditionally May to September. Last July, Turkish imports from Iran were almost at an all-time high. With the oil ban coming into force on July 1, right in the middle of the peak season, Tüpraş might have wanted to take as much Iranian crude as possible before starting to reduce supplies,” he said.

Turkish Energy Minister Taner Yıldız said at the end of March that the country would diversify its oil supplies.

The first shipment of crude under a Libyan term contract deal arrived in February, even though the amount is as little as 1 million barrels per month.

“Turkey has also started buying from some of the African countries that they haven’t bought in years, like Libya and Nigeria. Iraq is also a natural alternative supplier,” he said.

But quarterly trade figures highlight Iran’s strong dominance in Turkey’s crude imports, indicating the diversification of suppliers is still a work in progress.

The data shows Iran accounted for 2.44 million tons, 193,000 bpd, or more than half of the 4.416 million tons, or 350,000 bpd, of crude Turkey imported in the first three months of this year.

Its second biggest supplier, Iraq, trailed far behind with 568,326 tons, 45,000 bpd, in the same period.

Last year, Iran provided more than half of Turkey’s total crude oil imports at just over 18 million tons.

Trade between Turkey and Iran has risen sharply over the past decade, leading to Turkey being regarded as a possible weak link in the international sanctions against Iran.

Having been omitted from a list of countries granted exemptions by Washington, Turkey remains hopeful of obtaining a waiver to avoid U.S. financial sanctions.

Washington has already exempted Japan and 10 EU nations from measures it is threatening to impose on companies from countries that do not back its efforts to isolate Iran. It granted the exemptions because those countries have significantly cut purchases from Iran.

European Union nations have agreed to embargo Iranian oil from July 1.

That has left Iran’s top customers, China, India and Turkey, exposed to the possibility of such steps.