Turkey Reduces Oil and Gas Imports from Iran

On the eve of Turkish President Recep Tayyip Erdogan's visit to Iran, Turkey's Energy Market Regulatory Authority published its semi-annual report indicating a significant decline in the country's oil and gas imports from Iran. According to Turkey's official TRT television, Mr. Erdogan is scheduled to visit Tabriz on September 7, accompanied by his Russian counterpart Vladimir Putin, to hold a trilateral meeting with Iranian President Hassan Rouhani. The agenda of this meeting includes regional security issues, particularly concerning Syria and counter-terrorism. Meanwhile, the Turkish Energy Market Regulatory Authority reported on Monday, September 5, that in the first half of 2018, Turkey's crude oil imports from Iran fell by 27% to 4.296 million tons (equivalent to 174,000 barrels per day). U.S. President Donald Trump withdrew from the Iran nuclear deal on May 8 and announced the reinstatement of sanctions against the Islamic Republic. Part of the sanctions related to finance and industries was implemented on August 7, while oil sanctions are set to take effect on November 4. Turkey had previously stated that it would not comply with U.S. sanctions; however, details from the Turkish Energy Market Regulatory Authority show that Turkey's daily oil purchases from Iran in June dropped to about 70,000 barrels, a threefold decrease compared to the previous month and the lowest level since the lifting of sanctions against Iran in early 2016. Additionally, Turkey's total gas imports from Iran in the first half of this year fell by 15% compared to the same period last year, dropping below 4 billion cubic meters. Gas imports from Iran in June halved compared to the previous month. The Turkish Statistical Institute also reported on the total volume of bilateral trade (oil and non-oil) between Ankara and Tehran, indicating that Turkey's exports to Iran in the first six months of this year decreased by $200 million to $1.31 billion, while Iran's total exports to Turkey increased by $200 million to $3.37 billion. The main reason for the increase in Iran's total exports to Turkey, despite the decline in oil purchases, is the more than 30% rise in oil and gas prices compared to the first half of last year. Turkey is also a customer of Iranian petrochemical products, which have surged in price due to rising oil prices.