Page 8 - FSUOGM Week 29 2019

FSUOGM POLICY FSUOGM
Turkey’s STAR refinery turns to Russian oil
TURKEY
The re nery’s preference had been sanctioned Iranian crude.
AZERBAIJAN’S state oil company SOCAR has resorted to Russian crude to supply its new $6.3bn refinery on Turkey’s west coast, after ruling out purchases from Iran because of US sanctions.
e Star re nery, situated on the Aliaga pen- insula, has agreed to buy an initial 1mn tonnes of Urals crude – equal to around a tenth of its annual processing capacity – from Russia’s Ros- ne , the facility’s CEO Mesut Ilter told Bloomb- erg on July 21.
“If there were no restrictions, we would buy Iranian crude,” he was cited as saying, adding that the re nery can purchase oil from anywhere “as long as our model supports it”, although in practice Azerbaijan’s own light crude is not really suitable.
e Trump administration abolished waiv- ers in May that permitted a small number of countries to continue purchasing Iranian oil. e move prompted erce rebuke from Ankara, with Turkish President Recep Tayyip Erdogan
describing Washington’s measures as “cruel”. e leader has even o ered to step in and mediate talks between the US and Iran.
It is di cult to deduce how Iranian crude is still owing into Turkey, if any. SOCAR began operating the 200,000 barrel per day STAR re n- ery last October, and the plant now accounts for a quarter of Turkey’s re ning capacity. Prior to its launch, Tupras was Turkey’s only re ner. At full capacity, STAR is capable of annually producing 5mn tonnes of diesel, 2.5mn tonnes of petro- chemical feedstock and 1.5mn tonnes of jet fuel.
STAR’s operation will help Turkey slash its diesel imports from 60% to 40% of annual demand, while allowing the country to go with- out imports of jet fuel, even a er its new airport in Istanbul is launched. However, SOCAR’s man- agement is betting on the petrochemical market to ensure the plant’s long-term pro tability.
“We have built this re nery considering Tur- key’s long-term dynamics and petrochemical needs,” Ilter said.™
Iran nuclear deal signatories meet in Vienna
IRAN
The situation has been complicated by Iran’s seizure of a UK- agged oil tanker.
REMAINING major power nuclear deal sig- natories Britain, France, Germany, Russia and China will meet Iran in Vienna on July 28 to dis- cuss how to save the 2015 accord, the EU’s for- eign policy service said in a statement on July 23.
“The meeting has been convened at the request of France, Germany, the United King- dom, and Iran, and will examine issues linked to the implementation of the JCPOA [Joint Com- prehensive Plan of Action, as the deal is formally known] in all its aspects,” the statement said.
What will be a sitting of the Joint Commis- sion of the Joint JCPOA will be chaired by the EU foreign policy service’s Secretary General Helga Schmid.
e nuclear deal situation has been com- plicated by Iran’s seizure of a UK- agged oil tanker in response, it is widely thought, to the UK seizing an Iranian tanker at what the Irani- ans see as the behest of the US, which walked out of the nuclear deal in May 2015. e immi- nent arrival of Boris Johnson in 10 Downing Street as Britain’s new PM may also bring some new policy influence to bear on European unity shown so far to preserving the nuclear deal, particularly if Johnson proves close to Donald Trump.
is week started o with UK Foreign Sec- retary Jeremy Hunt pushing for a European-led maritime security force in the Gulf to protect shipping from any further attempted seizures by Iran. But Iranian vice-president, Eshaq Jahangiri,
on July 23 said any international coalition to pro- tect the Gulf would bring only insecurity. “ ere is no need to form a coalition because these kinds of coalitions and the presence of foreigners in the region by itself creates insecurity,” he said. “And other than increasing insecurity it will not achieve anything else.”
European leaders have broadly welcomed the Hunt plan. e UK envisages a multinational maritime operation that could also include countries in the Gulf region. e UK govern- ment faces pressure to protect half a trillion dollars of energy shipments that pass through the Strait of Hormuz each year. Johnson’s allies appear to be willing to continue Britain’s sup- port for the Iran nuclear deal, but see no need for America to be excluded from plans for a maritime security patrols through the Gulf, the Guardian reported.
e newspaper also said that British shipping executives reported the cost of war insurance for shipping going through the Strait of Hormuz was soaring, with the price for a voyage through the strait for a very large crude carrier (VLCC), the most common supertanker in the range of 200,000 to 400,000 tonnes, was set to rise by about $500,000.
The Iranian foreign minister, Javad Zarif, insisted Johnson needed to understand Tehran is not seeking confrontation. “Iran wants to have normal relations based on mutual respect,” he said. ™
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w w w . N E W S B A S E . c o m Week 29 24•July•2019