Turkey has closed its ports to Iranian oil: reports

Turkey has closed its ports to Iranian oil: reports
Refiner Tupras, headquartered in Korfez (pictured) in northwestern Turkey, is by far the biggest Turkish importer of Iranian crude oil.
By bne IntelliNews May 21, 2019

Turkey appears to have closed its ports to Iranian oil, reports indicated on May 21.

That would mean Ankara is fully complying with the US drive to cut Iran’s crude shipments on the world oil market to zero—but the move would fly in the face of rhetoric from the Erdogan administration in which officials said they were not accepting a scenario in which Turkey is deprived of its right to import oil and gas from its neighbour. Iran, of course, has openly said that it is maximising efforts to sell oil on the grey market and the possibility remains that some consignments moving under the radar are making it to Turkey. But Ankara, which would not want to see yet another row with Washington undermine its already brittle capital markets, may, for now at least, be toeing the line.

A Reuters report suggested Turkey has replaced Iranian oil with crude from Iraq, Russia and Kazakhstan since the US announced it would not tolerate any Iranian oil exports from the start of May.

Turkey’s largest oil refiner, Tupras, which consumes almost all of the country’s oil imports, has reportedly used its play book from 2012-2013, when earlier US sanctions on Iran forced it to ramp up supplies from Iraq and Russia, an oil industry executive who requested anonymity told the news agency, adding: “It is the same story...This time they are importing more Kazakh oil though.”

Kazakh import volumes hit a 20-year high in February, he was cited as saying.

No tankers arrived’
According to Refinitiv tracking data, no tankers loaded in Iran have arrived at Turkish ports so far this month. In early May, a tanker carrying 130,000 tonnes of Iranian crude was midway across the Mediterranean Sea to Turkey when it changed course and turned off its tracker, Refinitiv oil analyst Ehsan ul-Haq told Reuters. Analysts, referring to satellite imagery, reportedly said it likely unloaded instead at the Syrian port of Banias.

Turkish President Recep Tayyip Erdogan has said the US sanctions regime targeted at Iran is destabilising for the region. After the US “zero” push was announced in late April, Turkey’s foreign minister said it did not seem feasible for his country to diversify its oil and gas supplies to exclude Iran in such a short period of time.

Turkey, the largest economy in the Middle East, is almost completely reliant on imports for its energy needs and the massive energy bill it faces each year stretches its current account deficit. It has also complained to the US that alternative oil to Iranian crude available from Saudi Arabia and the United Arab Emirates (UAE)—two Gulf nations aggressively backing the US sanctions assault on Iran—is more expensive than what Iran is offering.

Prior to May 2018, when the US unilaterally exited the Iran nuclear accord, Turkey imported an average of 912,000 tonnes of oil a month from Iran, or 47% of its total imports. In the four months since November 2018, when the US imposed sanctions against Iran’s oil, gas and petrochemical industries but granted limited oil waivers that ran until the end of April this year, Turkey imported an average of 209,000 tonnes of Iranian oil, or 12% of its total imports, according to Reuters calculations based on regulatory data.

The latest report from Turkey’s energy watchdog shows Iran supplied 15% of the country’s oil consumption in February, with Iraq accounting for 23%, Russia 20% and Kazakhstan 16%.