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.
TEXT SIZE - +
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

Abuja Blast Impacts Lives, Livelihoods

Officials say they are looking at ways to help bombing victims and boosting security More

Cambodia Technology Adviser Criticizes Cybercrime Draft Law

Phu Leewood says current criminal code can be used to prosecute offenders and that there is no need for a separate law More

Photogallery A Year Later, Boston Remembers Deadly Marathon Bombings

City pauses to honor victims and salute emergency workers who came to their assistance in frantic moments after blasts 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.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid