Both India and Turkey have said they will defy President Trump’s call for them to stop buying Iranian oil once the U.S. reapplies sanctions in November. That isn’t really news.
Both of them defied the Obama administration in 2012, albeit in different way. Turkey changed its banking rules to monetize gold and used its gold reserves as a means to launder Iranian oil payments for third parties through its banking system.
India bypassed cutting off Iran from the U.S. dollar by beginning a goods-for-oil swap program.
Today, however, the geopolitical background is far different. Today, Iran can and does list its oil for sale in Shanghai’s futures market payable in Chinese Yuan. Turkey can recycle its Yuan it receives from its large trade deficit with China to up its purchases of Iranian oil if need be.
But, more importantly, both India and Turkey have geopolitical freedoms they didn’t have in 2012. I have covered the Turkey angle on this at length. India, on the other hand, I haven’t.
Iran has become Turkey’s biggest oil importer.
Turkey, a NATO ally, is dependent on imports for almost all of its energy needs. In the first four months of this year, Turkey bought 3.077 million tons of crude oil from Iran, almost 55 percent of its total crude supplies, according to data from Turkey’s Energy Market Regulatory Agency (EPDK).
President Recep Tayyip Erdoğan last year said Turkey was looking to raise the volume of its annual trade with Iran to $30 billion from $10 billion.
And it doesn’t look like this will change with Trump’s sanctions.
With President Erdogan winning re-election he now goes into the NATO Summit with Trump on July 11-12th with a lot of leverage. Erdogan has openly courted Russia on energy supplies.
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