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.

7 Comments on "Turkey Continues Trading Gold for Iranian Natural Gas"

BillT on Fri, 30th Nov 2012 3:46 am 



Another country giving the Empire the finger…lol Turkey basically told the Us and EU to go pound sand. Neither one’s sanctions mean much. And Dubai, home to Halliburton, is obviously in the middle of the transactions.

Ken Nohe on Fri, 30th Nov 2012 5:51 am 



Turkey is absolutely right and they should not give in although eventually they probably will since the US can exert more economic pressure than Iran. But it is not a done deal. Peak oil and the related permanent recession we find ourselves in will slowly sap the strength of the US and especially its ability to project power on the “border”. The empire will therefore have to delegate more and more missions on “allies”, but as for its predecessor 2,000 years ago, will find them less and less reliable over time. The process is already started and every new war will only push us towards our eventual demise. I say “our” because what will crash is not just the US but a whole concept of civilization: A paradigm. I find it extremely interesting to be able to witness this process although it is very likely that the end will not be a happy one for those involved. (That is all of us, more or less.)

DC on Fri, 30th Nov 2012 7:28 am 



Not the Turkey is to be applauded here, after all, they are allowing themselves to be used as a springboard to destabilize and invade there neighbour by the US. But on the more pertinent question this bit focuses on, ‘Breaching US-sanctions’? Those sanctions have no basis in international law, or indeed, any law period. Thus Turkey is not breaking any ‘law’ of any kind by trading with Iran. So really, on this issue, the can US can indeed, pound sand. Now only if the Turks displayed similar backbone when it comes to hosting US military bases and being used to as a base and transit point for amerikas war of terror…

Well that would a much more complete picture now would it not?

Ken Nohe on Fri, 30th Nov 2012 7:59 am 



It used to be that only rogue states were openly flaunting International laws and more developed countries were striving to at least keep the facade. But since 2001, as the US decided that it would not longer kowtow to them anymore in the name of the “war on terror” it is every country for itself reigned in only by raw power. My guess is that it probably won’t last very long. The US still has the dollar for now, the ultimate weapon, but the little care it is handled with guaranty that it will wear quickly. Interesting times!

Arthur on Fri, 30th Nov 2012 4:37 pm 



And then there is the UN…

“Israel suffered a humiliating defeat at The UN yesterday. The nations of the world stood up and said NO to the Jewish state – NO to Israeli occupation, NO to Israeli human rights abuse, NO to Jewish racism. In effect, they stood up and confessed to serious Zio-fatigue.”

http://www.gilad.co.uk/writings/the-end-of-jewish-power-1.html

Not exactly what Washington/Jeruzalem wants either. Good news.

actioncjackson on Fri, 30th Nov 2012 5:16 pm 



The power of the shiny yellow metal will eventually replace that of the sorcery of the black magic liquid.

BillT on Sat, 1st Dec 2012 1:10 am 



Yes action. Interesting that something Ben Bernanke claims is not money is being used more and more for trade as, gasp!, money!