Page 27 - TURKRptMay19

2.5 Turkey looking for mechanisms to boost sanctions-shielded trade with Iran
Foreign Minister Mevlut Cavusoglu on April 17 reasserted Turkey’s opposition to the US sanctions regime directed at Iran and said Turkish officials were looking into establishing new trade mechanisms with the Islamic Republic.
Turkey loath to replace Iranian oil with Saudi and UAE supplies under US sanctions pressure. Turkey is highly reluctant to buy more crude oil from Saudi Arabia and the United Arab Emirates (UAE) to replace volumes that the US says would breach its new drive to push Iranian oil exports to zero.
Iran is the third largest supplier of oil to Turkey, which boasts the Middle East’s biggest economy. At the same time, Ankara’s relations with Saudi Arabia and its close ally UAE are fraught, especially given unresolved rows over the murder of Saudi critic Jamal Khashoggi in the kingdom’s consulate in Istanbul last October. The US has said it aims to keep world oil prices stable by working with Saudi Arabia and UAE to replace Iranian oil barred from the market.
On a broader perspective, Turkey’s Erdogan administration remains opposed to the entire sanctions regime targeted at Iran by the US. It said in April it would set up a financial channel via which US sanctions imposed against the Islamic Republic, could be circumvented.
China, India and Turkey aren’t necessarily committed to bringing imports of Iranian crude down to zero and the US will have to negotiate "over the terms of their withdrawal from Iran or be prepared to deal with their noncompliance,” according to a report by Richard Nephew published by Columbia University’s Center on Global Energy Policy, cited by Bloomberg.
In January, Iran accounted for just over 12% of Turkey’s oil imports, according to the latest available official data. Iraq was the top supplier with almost 24%, followed by Russia with 15%. Saudi Arabia ranked 8th with 4.3%. Turkey only imported diesel fuel from the UAE in January.
Trump dramatically ups ante in fight with Iran saying ‘no more oil waivers’. Anxieties that Donald Trump may trigger military clashes, or worse, with Iran rose on April 22 as he announced his administration was ending exemptions from sanctions for countries still buying oil from the Islamic Republic. Trump said waivers for China, India, Japan, South Korea and Turkey would expire in May. The move is aimed at bringing Iran's oil exports to zero, denying Tehran its main source of revenue. Three other waiver holders, Greece, Italy and Taiwan, have already stopped importing Iranian oil. There had been speculation that the US was very likely set to grant some waiver extensions given concerns that entirely taking Iranian crude off world markets might drive up the oil price, but it appears White House officials hope recent negotiations with Saudi Arabia and the United Arab Emirates have produced assurances that they will work sufficiently hard to ensure enough replacement international supplies.
“Accelerating our pressure campaign”. US Secretary of State Mike Pompeo said Trump's decision to take the option of not renewing the waivers demonstrated that his administration was "dramatically accelerating our pressure campaign in a calibrated way that meets our national security objectives while maintaining well supplied global oil markets".
27 TURKEY Country Report May 2019 www.intellinews.com