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

War Legacy Haunts Vietnam, US Relations

US congressional delegation initiates $84 million Agent Orange cleanup project More

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends 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.
Ukraine, Russia, United in Faith, Divided in Politicsi
X
Michael Eckels
April 19, 2014
There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Ukraine, Russia, United in Faith, Divided in Politics

There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
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.
AppleAndroid