News / Middle East

Turkey Continues Trading Gold for Iranian Natural Gas

A worker walks past the pumping station on the border between Iran and Turkey during the inauguration ceremony for the Iran-Turkey gas pipeline, January 22, 2002.A worker walks past the pumping station on the border between Iran and Turkey during the inauguration ceremony for the Iran-Turkey gas pipeline, January 22, 2002.
x
A worker walks past the pumping station on the border between Iran and Turkey during the inauguration ceremony for the Iran-Turkey gas pipeline, January 22, 2002.
A worker walks past the pumping station on the border between Iran and Turkey during the inauguration ceremony for the Iran-Turkey gas pipeline, January 22, 2002.
Dorian Jones
Turkey late last week acknowledged that a surge in its gold exports this year is related to payments for imports of Iranian natural gas, shedding light on Ankara's role in breaching U.S.-led sanctions against Tehran.  
 
In response, U.S. senators said they will seek to close this loophole.  But a Turkish trade minister has warned Turkey will not respect any new U.S. measures. 
 
Turkish Deputy Prime Minister Ali Babacan admitted Turkey was paying for its gas imports with gold.  While Washington has warned it is considering new measures to prevent such payments, Turkey's economy minister Zafer Çaglayan this week dismissed the threat.
 
"The U.S. sanctions stand for the U.S.," Çaglayan said. "We have multilateral international agreements.  These deals we are a party to and are binding for us.  But measures taken by the EU are also not binding since we are not a member," he said. 
 
Iran is Turkey's second largest supplier of gas after Russia, with more than 90 percent of Iran's gas exports going to Turkey.
 
Iran provides 18 percent of Turkey's natural gas and 51 percent of its oil.  But since U.S. and European Union sanctions ban Tehran from receiving payments in dollars or euros, Ankara pays Iran for the gas in Turkish liras.  The lira is of limited value for buying goods on international markets but ideal for purchasing Turkish gold.  The government has not specified how it pays for Iranian oil.
 
Iranian analyst Jamshid Assadi, of France's Burgundy Business School, says the arrangement works for both countries.
 
"Iran has difficulties to get paid, because the financial and banking transactions are so big they cannot do that.  Oil and gas and sometimes the electricity they sell to Turkey, in return they get gold.  This is a big source of income for Turkey and this is a solution for the trouble in Iran," he said. 
 
Since the start of the year, Turkish exports of gold to Iran have rocketed.  According to official Turkish trade data, nearly $2 billion in gold was sent to Dubai in August on behalf of Iranian buyers.  
 
But chief economist for Finansbank Inan Demir says that amount is not surprising.
 
"I think everyone knows that if you are allowed to purchase some oil from Iran, then you are going to have to pay as well, and that payment method seems to be gold.  But I am sure Turkey is not the only country where these operations are being carried out.  If I am not mistaken, India is carrying out transactions," he said. 
 
Analysts say despite growing international sanctions against Tehran, Ankara is reluctant to cut off its Iranian energy imports completely, as that would make it totally dependent on Moscow for its gas supplies. 
 
Ties between Tehran and Ankara have become increasingly complicated in the past two years, as the Arab uprisings have polarized foreign policy goals.  The countries split most recently over the Syrian conflict, where Iran supports President Bashar al-Assad, while Turkey backs rebels seeking to oust the regime in Damascus.
 
Suat Kiniklioglu, a former member of parliament's foreign affairs committee for the ruling AK party, says trade relations could start to drop off. 
 
"There are already differences over Syria with Iran and that is ongoing. I think you will see less trade, less political dialogue and less deepened dialogue with Iran," he said. 
 
Analysts say Ankara is believed to be looking for alternative energy suppliers to Iran, which would be favored by both Brussels and Washington as they seek to increase the pressure on the Iranian regime.  But changing energy suppliers does take time, so it seems likely that gold will, for some time, continue to head to Tehran.

You May Like

Arab League Delays Forming Joint Force

Delay grows out of one of original obstacles facing pan-Arab force, analysts say: 'They may agree on the principle, but they continue to argue about how to implement the project' More

Pakistan Demands Afghanistan Protect Its Kabul Mission, Staff

Officials in Islamabad say Afghan agents are harassing Pakistani embassy personnel, particularly those living outside of mission’s compound More

US Survey: Trump Lead Grows in Republican Presidential Contest

Quinnipiac University poll shows brash billionaire real estate mogul with 28 percent support among Republican voters More

This forum has been closed.
Comment Sorting
Comments
     
by: James from: New York
November 30, 2012 5:33 AM
Turkey needs gas. Turkey has money.

If US doesn't want Turkey to buy from Iran then should just simply deliver the gas they need at the price they pay to Iranians.

If US can't do that then Turkey will just continue buying the gas it needs from wherever.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs