Turkey says cannot quickly abandon Iranian oil as U.S. waivers end

Turkey will be unable to diversify oil imports quickly after the United States ended waivers on purchases from Iran, the Turkish foreign minister said on Thursday, a day after a U.S.-imposed sanctions deadline passed.

Turkey’s statement follows comments by China, which said last month it opposed “long-armed jurisdictions implemented by the United States” and would continue “rational and legal” cooperation with Iran.

The United States told buyers to stop oil purchases by May 1 or face sanctions, ending six months of waivers that had allowed Iran’s biggest customers to import limited volumes.

Turkey and China are the only two countries so far to have expressed a desire to continue large purchases of Iranian crude. Other major buyers, such as India, Japan and South Korea, have signaled they would bow to U.S. pressure.

Turkey has reduced its heavy reliance on Iranian crude in the past year, but Turkish Foreign Minister Mevlut Cavusoglu said its refineries were not suited to handling oil from some other countries.

“It does not seem possible for us to diversify the sources of the oil we import in a short time,” he told 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 put pressure on its strategic Gulf ally and top global oil exporter, Saudi Arabia, as well as the United Arab Emirates to export more oil to meet potential shortages arising from Iranian sanctions.

President Donald Trump said last week the United States was “losing our ass defending Saudi Arabia” and needed the kingdom to work on a lot of deals with Washington.

India said on Thursday it was ready to deal with the impact of U.S. sanctions against Iran and would get extra supplies from other oil producers.

Turkish imports from Iran have dropped gradually since May 2018, when the United States 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 2018, making up 47 percent of its total oil requirements.

 

In the four months after the imposition of sanctions in November, Turkey imported an average of 209,000 tonnes of oil per month from Iran, or 12 percent 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.

Tupras did not respond to a question from Reuters about how the sanctions would affect its operations.