Gas for gold starts war of words between US, Turkey

Gas for gold starts war of words between US, Turkey

Gas for gold starts war of words between US, Turkey

Zafer Çağlayan AA photo

The future of Turkey’s gold for gas trade with Iran has turned into a war of words between Ankara and U.S. officials, who insist on squeezing the Islamic republic further to encourage a withdrawal from its alleged nuclear weapons program.

Turkish officials insist on continuing to buy natural gas from Iran and letting the supplier convert Turkish money into gold in Turkey on the eve of a final U.S. decision on a new wave of sanctions.

 “They call it ‘exports’ when we sell cucumbers, tomatoes or eggplants. It counts as exports when we sell cars but it is not simply exports when we sell gold,” the Turkish Economy Minister said yesterday at an Ankara meeting.

“Now some speak of a U.S. embargo. The U.S decision is binding for the U.S.” he said.

Turkish Prime Minister Recep Tayyip Erdoğan and Energy Minister Taner Yıldız have also openly stated that Turkey would continue the commerce and oil trade at a currently reduced level.

However, the U.S. expects countries that buy oil from Iran to further reduce their purchases if they want to avoid U.S. sanctions, a State Department source said on Dec. 5.

“The law requires additional cuts, so we expect buyers to make additional cuts,” a source at the State Department said of the U.S. sanctions law signed a year ago by President Barack Obama.

Yıldız said on Dec. 5 his country had not received any new request from the United States to reduce its level of crude purchases from Iran.

A Senate aide said the law’s requirement of further reductions in purchases every six months is clear.

“While I find it very hard to believe the U.S. State Department didn’t remind our Turkish partners that U.S. law requires them to continue significantly reducing purchases toward a permanent end to Iranian imports, U.S. law stands whether they received a warning or not,” said the aide, who did not want to be identified given the sensitivity of U.S. talks with oil consumer countries.

The State Department is expected to decide by Dec. 8 whether it will extend the six-month exemptions to the sanctions given to India, South Korea and other buyers of Iranian crude. The deadline for the decision for China and Singapore comes later in the month.

China, India, South Korea and other countries received six-month “exemptions” to the sanctions in June for reducing oil shipments from Iran. The law says the cuts have to be “significant” but does not dictate how deep they must be.

Iran’s crude exports are set to drop by about a quarter in December from the preceding month to the lowest level since tough sanctions were applied this year, shipping sources said. Oil shipments by Iran have more than halved in 2012 due to U.S. and European sanctions on its oil trade, straining Tehran’s finances and putting pressure on its currency, igniting inflation.