Turkey’s Iranian crude oil imports stopped falling in June, according to official data, before reaching its pledge to cut imports by 20 percent to win a waiver from U.S. sanctions.
But traders said they expected to see lower imports from July onwards as state refiner Tupras is having difficulty lifting Iranian crude with Turkish tankers due to sanctions in shipping insurance, leaving Tehran scrambling to sell its oil stuck in storage tanks in Egypt.
Iran is expected to try and revive demand for its oil in Turkey this week with a visit by its oil minister Rostam Qasemi on Thursday.
Turkey’s sole refiner and crude oil buyer Tupras imported 683,596 tons or 167,025 bpd of Iranian crude in June, compared with 161,298 bpd in May, official trade data showed on Tuesday.
Its purchases have declined steeply from the unusually high imports seen in March and in April, but remain some 20,000 bpd higher than Ankara's pledge of bringing them down by 20 percent.
Turkey imported an average of 180,000 barrels per day of Iranian crude in 2011. A 20 percent reduction from last year’s levels from July 1 would put Turkey's purchases at 144,000 bpd.
Turkey has already obtained an exemption in June from the U.S. financial sanctions, although limited to 180 days. U.S. officials signaled Washington pressed Turkey to follow its 20 percent reduction with a further cut in six months to extend the exemption.
The lack of shipping cover has already disrupted flows of Iranian oil to Tehran’s major customers in Asia - China, India, South Korea and Japan - at a time when the EU has stopped buying its oil altogether.
Turkey has been working to diversify its oil suppliers and in June, Iranian imports account for a little over one third of its total crude purchases. Imports from Saudi Arabia, Iraq and Russia have risen,
A decline in Iran’s share was also visible in the half-year figures, where Turkey imported a total of 9.2 million tons of crude oil and Iran accounted for just over 50 percent.