Turkey-Iran gold-for-gas hits $120 million in a month

Turkey-Iran gold-for-gas hits $120 million in a month

ANKARA - Reuters
Turkey-Iran gold-for-gas hits $120 million in a month

Turkey’s total gold exports raises to $551.6 million in February from $466 million in with a 18 percent increase.

Turkey exported almost $120 million worth of gold to Iran in February, data showed, suggesting the two countries’ trade of gold for natural gas has resumed despite tighter U.S. sanctions, though at levels below last year’s peaks.

U.S. officials have sought to prevent Turkish gold exports from providing a financial lifeline to Tehran, which has been largely frozen out of the global banking system by Western sanctions over its nuclear program.

Turkey sold no gold to Iran in January, according to data from the Turkish Statistics Institute (TUIK), as banks and dealers eyed the Feb. 6 implementation of U.S. sanctions that tightened control over precious metal sales.

The United States has given Turkey a six-month waiver exempting it from sanctions on trade with Iran, which is due to expire in July, but banks and dealers still have been cautious.

Total gold exports raises to $552 million

Turkey’s total gold exports rose 18 percent to $551.6 million in February from $466 million in January.

Turkey sold $117.9 million worth of gold to Iran in February, while exports to the United Arab Emirates, which has served in the past as a transit route to Tehran, rose to $402.3 million from $371 million in January, TUIK data showed.

“Due to the sanctions, nobody wants to attract attention. That may be the reason why exports stopped to Iran in January,” said one Istanbul gold trader, asking not to be named.

“However, trade with Iran continues; there will always be transfers. Looking at this year’s figures, the February exports to Iran are quite low, so it shouldn’t cause issues.”

Turkey’s monthly gold sales to Iran peaked last July at $1.8 billion, more than 10 times the amount exported to Tehran in February. Turkey, Iran’s biggest natural gas customer, has been paying Iran for energy imports with Turkish lira, because sanctions prevent it from paying in dollars or euros.

Iranians then use those lira, held in Halkbank accounts, to buy gold in Turkey, and couriers carry bullion worth millions of dollars in hand luggage to Dubai, where it can be sold for foreign currency or shipped to Iran.

Turkey, dependent on imported energy and, while it has cut back on oil purchases from Iran, has made clear it cannot simply stop buying Iranian oil and gas.