Turkey Defies Trump, Will Keep Importing Iranian Crude

Defying the Trump administration, Turkey said it would ignore the State Department’s call on US allies to stop importing Iranian crude oil by November 4, when the latest sanctions against Iran are set to kick in. Earlier this week, the State Department called on all US allies to completely stop buying Iranian crude, sending the price of oil to 4 year highs in the process. While many are trying to find a way around the sanctions, it is for now proving tricky, and many buyers are winding down their purchases of Iranian crude.

But not Turkey.

"The decisions taken by the United States on this issue are not binding for us. Of course, we will follow the United Nations on its decision. Other than this, we will only follow our own national interests,” Turkey’s Economy Minister Nihat Zeybekci said according to Turkish daily Hurriyet, adding that “we will pay attention so our friend Iran will not face any unfair actions."

Turkey is hardly alone in its defiance: oil importers including Japan, South Korea, and India, as well as European countries have said they will continue buying Iranian crude, although whether they will really do that remains to be seen - French oil giant Total has already stopped purchasing Iranian products.

The European Union is particularly concerned about the situation because not only because it relies on substantial Iranian imports, but because there is only so much that the three European signatories to the Iran nuclear deal could do to prevent Tehran from exiting it, which might happen if it stops seeing benefits from it, President Hassan Rouhani said.

The nuclear deal, which Iran signed with the US, France, Germany, the UK, Russia, and China, ended the international sanctions that Iran was subjected to because of its nuclear program, and gave it access to international markets, especially oil markets. Yet, if the unilateral US sanctions lead to a closure of this access, Iran will indeed be locked out of any economic benefits from the nuclear deal. Although Tehran still maintains that the nuclear program was not geared towards the weaponization of uranium, Rouhani—and Ayatollah Ali Khamenei before him—said Iran will ramp it up if the deal with the West falls through.

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There is another notable consideration: Last Friday during Friday's OPEC meeting, Iran'ss petroleum minister said he wants to increase exports of Kirkuk's oil 10-fold to 300,000 barrels per day.

"We have started to receive the Kirkuk oil to Iran. I hope to be able to continue it as the program we have agreed to with the oil ministry of Iraq," Iranian Minister Bijan Namdar Zangeneh told Rudaw on Friday.

"But for continuation of this swap, and to we need to increase the level of this swap, we need to build a pipeline between Kirkuk and Iran," emphasized Zangeneh. "Currently it's at 30,000 bpd, could be increased it to more than 300."

Iraq's State Organization for Marketing of Oil (SOMO) currently sends Kirkuk oil by tanker truck to a refinery in Kermanshah. In return, Iran sends the same amount of oil to southern Iraq. Iraqi Oil Minister Jabbar al-Luaibi reiterated to Rudaw at OPEC that talks are underway between all players to re-open the Ceyhan pipeline.

"The pipeline is owned by Rosneft, BP, and a Kurdistan Region company. Now we are in talks with them and God willing this issue will be resolved. Talks with Rosneft, BP and the Kurdish company are ongoing," Luaibi said.

Should the Ceyhan pipeline to Iran be completed, and Tehran get access to Turkish export markets, then US attempts to limit Iranian exports would be substantially diluted.

Iran has another potential white knight: According to Jefferies analysts, with Chinese oil demand set to expand by 1 million b/d this year and more next year, the country can mop up whatever Iranian barrels others leave due to U.S. sanctions.

According to Jefferiies, China, with a new oil futures exchange, can exploit sanctions to institutionalize RMB-denominated trade in oil:

“China is capitalizing on the unintended consequences of Trump’s aggressive policies, from institutionalizing the petro- RMB to splitting alliances”

"While some buyers have cut purchases from Iran in fear of losing access to U.S. markets and dollar settlement systems, they are doing so grudgingly and resentfully."

In 2017, China imported ~650k b/d from Iran in 2017 -- 5.1% of its total demand and 7.4% of imports; notably, this was down from 13% in previous years. In other words, if the trade war between China and the US indeed escalate, China would be more than happy to shift excess demand to Iranian exports, while leaving some legacy producers in the cold.


Deep Snorkeler Sat, 06/30/2018 - 13:32 Permalink

Trump, Sun God of the Leisure Caste

A man of emotional delusion never troubled by rational insight.

A man of ugly action - America's allies flee Trumpian coercion. 

America, the lonely tyrant of the world-system.

The White House is free of music.



skbull44 curbjob Sat, 06/30/2018 - 13:46 Permalink

The writing seems to be on the wall for the US Empire. But is this not how most empires fall? They overreach, experience declining marginal returns on investments in their complexity, and then slowly (sometimes not so slowly) lose relevance for more and more of its allies until a breaking point is reached. Add into the mix a great deal of civil strife and you have all the ingredients for the collapse of yet another in a long line of complex societies that seemed to 'have it all' for their time in history and then pissed it all away. All that's needed to complete the recipe is the passage of time...



In reply to by curbjob

koh1moh2 sabaj49 Sat, 06/30/2018 - 20:10 Permalink

No point in moving the base to Greece. Greece will leave NATO after Turkey formally does so. Enemies they have been and are, but Greece will be next after Turkey. Russia and Greece are natural allies. No point in the base anywhere except maybe Djibouti or somewhere like that. Nobody in Europe wants another US base and the UK's overwhelmed with  them already.

In reply to by sabaj49

Not Too Important skbull44 Sat, 06/30/2018 - 14:07 Permalink

The collapse of the US Empire will be the reverse of Moore's Law. While it used to take centuries for empires to collapse, this one will take less than a few decades, if that.

It appears Trump is getting the world ready for this, by forcing more countries - foes and allies alike - into increased self-reliance without US subsidization. 

He could never stop what's coming, it's simply math at this point, but he can certainly do what he can to cushion the blow.

In reply to by skbull44

Winston Churchill Not Too Important Sat, 06/30/2018 - 14:35 Permalink

Its a process not an event, one we're actually well into.The constant lies from every govt.organ is to be

expected in such a situation.It will suddenly collapse as far as the serfs think, because they believe the pablum

served up rather than look with their lying eyes.The true figures say the collapse started in 2001 at the latest,but

really it was 1971 and the closing of the gold window.We are well into the collapse with either date.

Trump should do what Gorbachov did, but exceptionalism won't let him,so we're all going to suffer while he

vainly tries to fix the unfixable.

In reply to by Not Too Important

just the tip skbull44 Sat, 06/30/2018 - 15:17 Permalink

But is this not how most empires fall?

i have heard that phrase ever since i got to ZH.  sounds ridiculous present day.

to reach the boundaries of the roman empire, holy or not, it would take a minimum of a month sometimes.  no different for the british armada sailing for a month, or more, to reach the far ends of the empire.

it takes what, now, a second?  policy can be made, changed, made again, changed again.  what?  four seconds?  if the US empire falters, it will not be because of a faltering economy, it will be for the lack of consumer based economies elsewhere.  which says more about them than us.

In reply to by skbull44

skbull44 just the tip Sat, 06/30/2018 - 16:51 Permalink

If archaeologist Joseph Tainter's thesis (expanded upon in The Collapse of Complex Societies) is correct, it is not any one thing (such as a faltering economy) that has caused all past complex societies to decline to the point of irrelevance but some significant stress surge that overwhelms current reserves, and that probably would have been sufficiently dealt with in earlier times when reserves were more plentiful. That stress surge could be from internal dynamics (think a new civil war), depletion of a vital resource (think oil/gas/water), some insurmountable catastrophe (think Yellowstone super volcano), class conflict or elite mismanagement, economic factors, and/or some chance concatenation of events. Reserves tend to become 'depleted' and 'stressed' due to the Law of Diminishing Marginal Returns. For example, oil has shown this depletion. Oil is no longer providing 100 barrels of energy for every barrel put in (as it did when first exploited over 100 years ago) but only about 7-10, if that much (read up on EROEI). The easiest- and cheapest-to-retrieve resources were used first and now more expensive and harder-to-retrieve reserves are being used to keep the wheels of industry greased, so to speak. If, say, a sudden stress surge such as a global geopolitical hot war breaks out and requires more and more oil to keep the war effort going, reserves could be stressed to the point of breaking, especially if shipping lanes become targeted (because despite the misbelief that the US is an oil exporter, it still imports almost 50% of its crude for domestic purposes). This would create a host of knock-on effects stressing the economy, food distribution, social services, social ties, etc.. It is when further investments in sociopolitical complexity become seen by increasing numbers of citizens as less favourable than rejecting such a polity and 'going it alone', that a society can be said to have 'collapsed'. 

In reply to by just the tip

Scipio Africanuz skbull44 Sat, 06/30/2018 - 16:04 Permalink

I said a while back that Iran it'd be who'll kill the empire. Folks didn't understand and now, the empire is well and truly dead. I'm inclined to believe Adelson and folks, are double agents, whose task it was to kill the American Republic, and isolate her from help and assistance, they've almost succeeded except that Putin might be able to help prevent total disintegration.

The key is John Bolton, if he can be persuaded to put his country first, and repudiate the killers of the Republic. Ain't that a sight? That now, the fate of the restoration of the American Republic, lies squarely, in the hands of John Bolton?

This is not how it's supposed to be, the Republic that brought light to a major part of humanity, is left friendless, and devoid of respect and credibility. This is what not-israel has done to the American Republic, what a shame, sigh...

In reply to by skbull44

Superlat skbull44 Sat, 06/30/2018 - 16:10 Permalink

Iraqi crude could have been under US influence with Saddam still firmly on our side, but instead the Republican geniusses and their friends the zionists decided to discipline another dictator that wasn't doing exactly what they wanted, and Iran running Iraq today is the result. Smart guys, these ziowasps.

In reply to by skbull44

Number 9 Sat, 06/30/2018 - 13:37 Permalink

us hegemony is slipping away..

might be a good thing but could be dangerous as well.. 

hope the crazies dont go all scorched opposition on these stupid sanctions

Not Too Important Number 9 Sat, 06/30/2018 - 14:55 Permalink

The world's future, country by country, is 'The Road', by Cormac McCarthy. Zimbabwe is there, Venezuela is there, Argentina is close, several countries in Africa, it is very, very unfortunate. Horrific. I can only pray that the US is the last to get there, for our kid's sakes. 

Do not ever forget that the Commie left wants the US to get there first, at whatever cost.

In reply to by Number 9

east of eden Sat, 06/30/2018 - 13:58 Permalink

Headline is: 'Turkey defies Trump'.

You fucking American's are totally out to lunch, and, as always, totally fucking arrogant.

You make it sound like Trump is the Lord God Almighty and a sovereign country that chooses their own path must necessarily be 'out of line'.

Well, fuck wads, IT IS YOU, WHO ARE OUT OF FUCKING LINE. And you are about to find out exactly what consequences that bears.