June 12, 2012 / 5:24 PM / 8 years ago

U.S. presses Turkey to cut more Iranian oil imports

ANKARA (Reuters) - The United States has pressed Turkey to follow up on a 20 percent cut in oil purchases from Iran with a further cut in six months time to help persuade Iran to quit stalling in talks over its nuclear program, a U.S. diplomat said on Tuesday.

The diplomat said Washington granted Turkey a 180-day exception from financial sanctions as a result of the initial cut made by Tupras, Turkey’s sole refiner and a unit of Koc Holding.

“So Turkey now has 180 days, Tupras has 180 days to take a look at its oil situation to decide - can it reduce further, can it get to zero? - what it needs to do,” the diplomat said.

Secretary of State Hillary Clinton said on Monday the U.S. would exempt India, South Korea, Turkey and four other countries from financial sanctions because they have significantly cut purchases of Iranian oil.

That means Turkey’s Halkbank will be able to make payments to the Iranian Central Bank for oil shipments to Tupras without fear of being blacklisted by the United States.

After the 180 days, the U.S. diplomat said, Washington will be looking for Tupras to make a further significant cut, without specifying how much.

“We didn’t want to get into negotiating barrels,” the diplomat said. “The whole point was we wanted countries to send a political message to Iran ... to really put pressure on Iran to get back to the table in terms of negotiating with P5+1, with the IAEA.”

Turkey was Iran’s fifth-largest customer in 2011, buying around 200,000 barrels per day of oil, which amounted to 30 percent of its total imports and more than 7 percent of Iran’s oil exports.

Turkey cut its imports from Iran to 140,000 barrels per day in May from an average of 210,000 bpd in the first four months of this year, shipping data showed.

The diplomat told reporters the grace period, starting on June 11, should give Tupras time to find other suppliers and make the technical adjustments needed to handle a different mix of crude, noting that Tupras’s contract with Iran ends in August.

Energy Minister Taner Yildiz said on Tuesday that talks were underway with Saudi Arabia to secure a long-term crude oil purchasing contract.

IRAN TALKS STALL

Talks between Iran and the five permanent members of the U.N. Security Council plus Germany, otherwise known as P5+1, in Baghdad last month made little progress.

Iran says its nuclear program is solely for civilian purposes and denies that it is building weapons, but its foot-dragging in negotiations has fuelled suspicions.

The outcome of talks earlier this month between Iran and the International Atomic Energy (IAEA) were also regarded as disappointing by U.S. officials.

Trade between Turkey and Iran has risen sharply over the past decade, and Turkey was regarded as a possible weak link in the international sanctions against Iran.

Relations between the two neighbors, however, have been strained by Tehran’s support for Syria’s President Bashar al Assad, while Turkey has sided with Syrians who have joined in the popular revolt against his rule.

Turkey began diversifying its sources of oil supplies earlier this year, and Yildiz said the number of countries supplying it would rise to 14 from 11.

Turkey agreed on a contract to buy 1.1023 million tons from Libya in February and is working on a deal with Venezuela, under which it would construct housing there in exchange for oil products.

Writing by Simon Cameron-Moore, editing by Jane Baird

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