Turkey cannot quickly cut Iranian oil, says minister


A traffic jam fills a highway in the Levent business district of Istanbul (file). Turkey, which is almost completely reliant on oil imports to meet its energy needs, imported 912,000 tonnes of oil per month on average from Iran until May, making up 47% of its total oil requirements

Turkey will be unable to diversify oil imports quickly after the US ended waivers on purchases from Iran, the Turkish foreign minister said yesterday, a day after a US-imposed sanctions deadline. The US demanded on April 22 that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers that had allowed Iran’s eight biggest customers, including Turkey, to import limited volumes. While Turkey has managed a gradual shift away from its heavily reliance on Iranian crude over the past year, Turkish Foreign Minister Mevlut Cavusoglu said its refineries are not suitable for the oil of some other countries.

“It does not seem possible for us to diversify the sources of the oil we import in a short time,” he said at a news conference, adding that Washington should review its decision. “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 White House has said it was working with oil exporters Saudi Arabia and the UAE to ensure the market was “adequately supplied”. Turkish imports from Iran have dropped gradually since last May, when the US first mentioned possible sanctions. Turkey, which is almost completely reliant on imports to meet its energy needs, imported 912,000 tonnes of oil per month on average from Iran until May, making up 47% of its total oil requirements. In the four months since the imposition of sanctions in November, Turkey has imported an average of 209,000 tonnes of oil per month from Iran, or 12% of its needs, according to Reuters calculations based on regulatory data.

Turkey last week said it was working to convince Washington to allow oil refiner Tupras to continue crude imports from Iran. The company’s refineries are capable of processing heavy and high-sulphur crude oil. It used oil from 11 countries other than Iran last year, according to information on the company’s website. The Middle East supplied 80% of that oil, with Russia, Azerbaijan and Kazakhstan accounting for 14%.Tupras did not respond to a question from Reuters about how the sanctions would affect its operations. Separately, Turkey’s energy sector has $12bn-$13bn worth of loans that require restructuring, out of a total of $70bn, lender Garanti Bank’s deputy managing director Ebru Edin said yesterday. Last month, Finance Minister Berat Albayrak unveiled a plan to transfer some of the banking sector’s problem loans to off- balance-sheet funds, two of which were to focus on energy and real estate. Some debtors will be able to repay loans if terms are eased, “but some of the projects may not be able to repay the debt even if restructured,” Edin told broadcaster Bloomberg HT. The planned energy sector fund will be managed by a portfolio management company, he said.

Sources and photo-credits: Bloomberg, Gulf Times